This article first appeared in Digital Edge, The Edge Malaysia Weekly on September 9, 2024 - September 15, 2024

The development of tech hubs and data centres is closely interconnected; both sectors drive and benefit from each other’s growth and advancements.

Hubs such as Cyberjaya offer dark fibre connectivity, enabling companies to effectively manage their network infrastructure. This set-up ensures uninterrupted bandwidth and consistent, reliable data transmission speeds, which are crucial for the efficient operation of data centres, says Kamarul Ariffin Abdul Samad, CEO of Cyberview Sdn Bhd.

Dark fibre connectivity refers to unused optical fibre infrastructure for networks.

“Tech hubs like Cyberjaya play a critical role in today’s digital landscape, ensuring that companies across all sectors are connected and supported, creating an environment where innovation can flourish,” he says.

Thus, it is crucial that data centre companies connect to a robust innovation and tech ecosystem by fostering collaboration with local start-ups, small and medium enterprises, research institutions and industry leaders, says Kamarul.

“Embracing emerging technologies, investing in research and development, and nurturing a culture of continuous improvement will enable tech hubs and data centres to thrive in today’s digital era.”

Furthermore, tech hubs are able to align local talent and skills with the growing digital economy in Malaysia because they serve as innovation ecosystems that bring together educational institutions, industry leaders and government initiatives.

The influx of data centres also necessitates tech parks that provide well-planned environments for businesses to operate in by providing amenities such as power, connectivity and security.

Tech parks also provide data centre investors with the flexibility to choose environments that precisely match their business objectives. For example, Sedenak Tech Park is designed specifically for the data centre ecosystem with its prime location, ample space and eco-friendly power sources.

Tech parks play a vital role in stimulating local industries and supply chains, says Datuk Akmal Ahmad, deputy chairman of JLand Group Sdn Bhd. This is by encouraging the clustering of related industries, which fosters collaboration and skill development within the local workforce.

“Tech parks are vital catalysts for stimulating local economies and driving infrastructure development. By attracting businesses, start-ups and multinational corporations, they generate demand for a wide range of local services, fostering economic diversification and boosting local spending,” says Akmal.

As tech parks are established, they require reliable and advanced infrastructure to upgrade existing facilities or to develop new ones, he says. This demand prompts local governments or private investors to upgrade existing facilities or develop new ones, which creates a ripple effect that benefits the surrounding communities.

That is not all. The development of tech parks significantly boosts residential property values in nearby areas, says Akmal. As tech parks attract businesses and skilled professionals, the increased demand for housing leads to the development of various residential properties. This also prompts the creation of essential amenities to accommodate the growing population.

Furthermore, tech parks create demand for skilled workers in different sectors by bringing different groups of companies together, says Akmal. The clustering of businesses stimulates growth in local services like retail and housing.

Within the context of a tech hub, ripple effects in the creation of higher-income job opportunities such as in cybersecurity, network infrastructure management and data analytics can be expected as data centre investment emerges, says Cyberview’s Kamarul.

Cyberjaya, for example, is home to eight institutes of higher learning that supply talent to the tech sector. This is as industry-academia collaboration and dialogue allow two-way communication that improves the employability of graduates, says Kamarul. Cyberjaya is home to over 28,000 students.

As a tech hub developer, Cyberview has incorporated collaborative spaces, innovation labs and incubators as part of the tech hub’s urban planning components, which supports the growth of local start-ups and creative enterprises.

“This demand can drive up residential property values as more people, including highly skilled tech professionals, seek to live close to their workplaces, benefitting from reduced commute times and enhanced local amenities,” he says.

“It also gives rise to the development of modern amenities such as restaurants, retail stores and parks that enhance quality of life by providing convenient options for workers and residents [of the tech hub].”

However, the development of tech parks or hubs comes with its own challenges, notes Benjamin Ong, CEO of Mah Sing Group Bhd (KL:MAHSING). For instance, land acquisition can be a hurdle, as demand for suitable land can drive up prices. Additionally, there needs to be adequate infrastructure, power and water supply to meet the demands of these data centre developments.

This is why government and strategic policies are essential to maximise the benefits of tech hubs and data centres. The government plays a vital role in creating a conducive business environment, making investments in infrastructure and promoting local talent.

“Government policies and planning are very important. They have to increase spending on power and water infrastructure so that there is evenly distributed development across the segments. If that is planned properly, Malaysia stands to gain because we all move up the value chain,” says Ong.

There needs to be adequate infrastructure, power and water supply to meet the demands of these data centre develop.ments. This means that Malaysia must keep investing in its electrical grid and telecommunications infrastructure, says Kamarul.

This increased demand also necessitates the development of renewable energy sources and the enhancement of energy efficiency measures to support data centre growth whilst minimising environmental impact.

In response to this, Cyberview has implemented an action plan that includes establishing an environmental, social and governance framework and a five-year road map focused on enhancing sustainability.

“We are actively exploring further opportunities with potential partners to enhance our use of solar and renewable energy for data centres in Cyberjaya. This includes evaluating the feasibility of renewable power options through the Corporate Green Power Programme and Third-Party Access,” says Kamarul.

He acknowledges that as the demands of the tech industry continue to evolve, there is a need to work via a collaborative framework with key partners and government agencies, in order to offer solutions to scale infrastructure and manage resources.

“We also conduct a thorough cost-benefit analysis to understand the financial implications and potential returns of infrastructure in Cyberjaya. By doing so, we ensure that the infrastructure not only meets current needs but also positions the city as a forward-looking hub that can sustain tech and economic advancement,” says Kamarul.

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