This publication reviews higher education and economic development in the State of Penang, Malaysia. It finds that Penang is one of Malaysia’s most industrial states. Its long-term economic growth has been based on manufacturing and foreign direct investments. Strong dependence on multinational corporations has brought growth and development but also an underdeveloped local industry, limited indigenous innovation and a lack of dynamic new entrepreneurship.

It examines how Penang could move up in the value chain, away from manufacturing to knowledge-driven economy and how it could capitalise on its diverse population, the co-existence of three cultures and the UNESCO cultural heritage site. It shows how Penang’s diverse tertiary education sector could be mobilised for regional and local development.