The transition from low-valued repetitive manufacturing sites to technology hubs: The influence of globally operating companies

Abstract As globalization becomes a more integral part of successful competition, companies will be searching for new appropriate, and efficient locations for various aspects of their operations. In turn, host countries will become anxious to attract the higher value-added activities of such globally operating companies, and the benefits they entail. In this paper, we introduce the idea of “technology hub” and examine why and how it is formed. Furthermore, we explore the manufacturing situation in Malaysia in order to determine whether or not it has the potential to reach a technology hub status, given its existing characteristics. A detailed case study of 19 manufacturing companies is presented and analyzed to provide an answer to this question. The conclusions of the paper show that while Malaysia is not yet a fully developed technological hub, it is progressing rapidly toward such status.