"We will be very backwared and we will not be able to understand what is happening around us," he told a press conference attended by the 29 International Advisory Panel (IAP) members and representatives.
Mahathir said without the MSC, the country would not be able to take advantage of new technologies.
When asked about criticisms of the rate of progress in the MSC, he stressed the multi-billion ringgit project was ahead of schedule, pointing 37 global technology firms have attained MSC-status, when the goal was to get 50 companies by 2003.
Multimedia Development Corporation (MDC) executive chairman Othman Yeop Abdullah meanwhile said about RM2 billion had so far been invested in the infrastructural projects in the corridor.
"These investments would reap returns of more than RM20 billion which the 362 MSC-status firms would probably invest in the next five years," he said at the press conference.
Othman claimed the companies would also create about 35,000 job opportunities in the process.
He also dismissed the notion that local tech firms are not doing anything significant to attract international venture capitalists, a trend quite common in other markets like Singapore and Hong Kong.
"We received quite a number of enquiries from various venture companies from overseas, such as the U.S., Taiwan and Hong Kong."
"The capital market is developing. You can't afford to see something to blossom overnight," Othman said adding the Finance Ministry are putting in place mechanisms to prod the local capital markets into the limelight in the next two or three years.
Venture capital companies, after investing in start-up companies for a specific period of two to five years, need to find an exit point such as through initial public offering (IPO).
Mahathir also added local financiers needed to have a paradigm shift when it comes to venture capital and the need to train people in this field.
He said that venture capital is still something that many Malaysian financiers and bankers find difficult to practice as they are too used to lending based on collateral.
Mahathir said that venture capitalists are supposed to invest fairly freely with the hope that out of 10 companies that they invest in, one would provide tremendous return to cover the losses by the others.
"If you talk to Malaysian financiers, they think this is crazy. They would rather lend money based on a piece of land worth one-and-a-half times what they lent," Dr Mahathir lamented.
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