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 2011 IEEE Symposium on Business, Engineering and Industrial Applications (ISBEIA), Langkawi, Malaysia
The Development of the Creative Economy in
Malaysia as Experienced in Two Different Case
Studies
*Siti Salwa Isa (Author 1), *Siti Suriawati Isa (Author 2) and **Abu Ali (Author 2)
*Author Affiliation 1 : Industrial Design Department Faculty of Art & Design, UiTM, Selangor, Malaysia
**Author Affiliation 2 : Faculty of Forestry, Universiti Putra Malaysia
**Author Affiliation 2 : Industrial Design Department Faculty of Art & Design, UiTM, Selangor, Malaysia
Abstract—Cultural, tourism, and creative industries sectors can be
understood as having intersecting policy agendas and economic
interdependencies. In the developing context the first two have a
somewhat longer history of analysis than the last one. However,
emerging studies are beginning to emphasise all three domains are
interconnected to each other, and need each other to sustain their
products in the market. However, the studies are mainly
concentrated on Western countries and there are still many aspects
of this concept remain unanswered particularly in developing
nations for example Malaysia. Data on developing nations is still
problematic and considerably limited, or only concentrated in
countries such as China and India. To have a better grasp about
the underlying key concepts of the development issues on creativity,
technology and innovation applied in cultural products in
developing nations this study proposed case studies approach to be
applied in Malaysia. The creative economy development issues in
Malaysia will be the primary focus to be investigated by this
research. An electronic research through the Internet on two
different case studies in Malaysia had been looked at on their
experience in developing their creative economy through a
combination between culture, tourism and creativity.
Keywords-component; creative economy, cultural tourism,
creative industries, experience industries and developing
nations.
I. INTRODUCTION
According to United Nations Conference on Trade and
Development (UNCTAD) (2004; 2008), the role of creativity,
technology and innovation has reshaped the overall pattern of
cultural production, utilization, and trade worldwide
(UNCTAD 2008, p iii). In addition, all sectors of the economy
nowadays need to address these elements to keep them
competitive and sustainable. In doing so, developed countries
such as Australia, the United States (US), and United
Kingdom (UK) are at the forefront in these sectors.
Developing nations such as in Asia and African regions are
significantly behind in these areas, creating a significant gap
between them and developed countries. Recently, with the
realization from several world organizations under the United
Nations and academicians more attention on this topic is given
to developing regions. Nevertheless, data on developing
nations is still problematic and considerably limited. This is
the challenge this study will have to face.
978-1-4577-1549-5/11/$26.00 ©2011 Crown
II. DIFFERENT TERMINOLOGIES WITH SIMILAR CONCEPT
Different organisations and countries have used different
terminologies to represent their creative industries (hereafter
CI) sector and these are variously defined (Hartley 2005). CI
is also known by other terms, such as experience industry
(Sweden), cultural industries (UNESCO), cultural sector and
cultural industries (The European Commission), cultural
industry (China), and entertainment and media industries or
copyright industries in the US (Nielsen 2004). While,
UNCTAD (2008, p iii) stated that, creative economy (after this
CE) is an evolving concept centred on the dynamics of the CI.
In other word, CE is the umbrella for CI which is the new
buzz word for many countries today. The most cited definition
used in the literature for CI is the definition by the Department
for Culture, Media, and Sport (DCMS), UK (2001). They
defined CI as “those industries that are based on individual
creativity, skill and talent. They are also those that have the
potential to create wealth and jobs through developing
intellectual property”. The CI includes advertising,
architecture, art and antiques markets, designer fashion, film
and video, music, and software (DCMS 2001). Unfortunately,
without access to the contemporary digital content markets (cf.
Japan, Korea) many developing countries including Malaysia
categorised their cultural tourism as part of their creative
sectors.
III. THE DEBATE ON CREATIVE ECONOMY
Recently, CE concept has been introduced, to link between
CI and economy. As the key reference body for world latest
socio-economy sector, a report by UNCTAD provides an
important indicator for countries worldwide to plan their
future. According to UNCTAD (2008, p 15) CE is; an
evolving concept based on creative assets potentially
generating economic growth and development in areas such
as; job creation, export earnings, cultural, IP and tourism
objectives. This definition is formulated to assist and create a
better platform for developing nations to develop their CE
which is far behind the developed countries. However, their
definition is argue as being too broad and covered almost
anything in order to include developing countries in creative
sectors (Keane 2010).
521
 The developing nations such as Indonesia, Nigeria,
Malaysia and Vietnam are among the developing nations
identified to actively developed or planning to develop their
CE through CI. In UNCTAD (2008) report Malaysia has been
identified as one of the top producers for CE. However, due to
the novelty of CE in developing countries, data on these
countries is poorly documented, specifically in Malaysia. In
Malaysia the development of CI is evolving more around the
multimedia, innovation, knowledge economy and technology
initiated by the government. They had invested billions of
Malaysian ringgit in several projects to enhance the growth of
these areas. Projects such as ‘Multimedia Super Corridor’
(MSC), ‘Cyberjaya’ city and ‘Technology Park Malaysia’
were launched for the growth of creative sectors in the
country. This development is in line with the vision set by the
fourth Malaysian Prime Minister, Mahathir Mohamad to make
Malaysia as a developed country by the year 2020. The MSC
development in 1995 is identified as one of the core elements
to reach that goal. However, compared to her neighbours in
Asian region for example; Singapore and Indonesia, Malaysia
is far behind in the development of their CI (Vicziany & Puteh
2004). UNCTAD (2008, p 16) identified that developing
nations have rich cultural resources which can be used as their
creative asset and to develop their CI sector. Malaysia is well
known for their cultural products due to their multi ethnics and
multi religions community (Khalifah & Tahir 1997, p 178;
Musa 2000). Thus, Malaysian cultural influence is being used
significantly in their creative products and services. However,
there are still many underlying issues on the relationship of
cultural tourism and CI in developing nations need to be
investigated due to the newness of this area including
Malaysia which has been neglected in the literature.
IV. RESEARCH PROBLEM
The central research problem of this study is to explore the
development issues underlying the CE through the
development of cultural tourism and CI sectors experienced by
two organisations in Malaysia. This under researched topic
requires more attention from researchers to close the
significant gap in the literature. Hence, three research
questions have been formulated by this research: RQ1: What
is the relationship between cultural tourism and the creative
industries? RQ2: How experience industries in Malaysia are
being developed? RQ3: How does Malaysia positioning
herself in the creative industries in the region?
To have a better grasp about the underlying key concepts
of the development on creative and cultural sectors in
Malaysia, case study approach is proposed due to the limited
data. The CE development issues will be the primary focus to
be investigated. Two case studies in Malaysia will be
undertaken to compare and examine the experienced between
the two organisations involving in creative and cultural
sectors. Case studies are proposed to gain in depth knowledge
about cultural tourism and CI products and services in
Malaysia.
522
A. Creative Economy
The term creative economy is first introduced by John
Howkins (2001) in his book. He explains that, “creativity” and
economics are not new, however, the nature and extent of the
relationship between them, and how they combine to create
extraordinary value and wealth is (p 15). Whether it is an old
concept being recycle in today’s world or a totally new
concept, CE is identified to contribute significantly in the
socio-economy sector particularly in the developed countries
today (UNCTAD 2008, p 5). UNCTAD reported that, due to
the subjective concept of CE that is still being shaped, it is
problematic to define this concept. The same report identified
that developing nations can compete fairly with developed
countries in this area. Their report has been challenged by
authors such as Keane (2010) who argue that the chance to
become successful in these sectors is low, and creative
economy concept is not fully tested in the market yet. Also,
Gibson and Kong (2005) identified the uneven geographies of
academic work in cultural economy (or CE), and the need for
future study to move beyond an American/European focus.
Thus, this present study chooses Malaysia to close the
significant gap of this topic in the literature.
B. The creative economy in developing nations
The developing world has great potential in CE due to the
significant creative assets and rich cultural resources that exist
in these countries (Barrowclough & Kozul-Wright 2008, p
20). These resources not only enable them to project their own
unique cultural identities, but also provide them with a source
of economic growth, employment creation and increased
participation in the global economy (UNCTAD 2008, p 16).
This process is known as cultural reconversion where old and
new symbolic forms offer broad opportunities for cultural
investment (Murphy 2003, p 265). Rather than letting the
traditional cultural forms to die, it is better to transit and
articulate these traditions to modern process (Cancilini 1992, p
31). Although these types of development create much
argument from cultural theorists (see O’Connor 1999) and
practitioners (Oakley 2004), but many studies acknowledged
that through the development of CE can regenerate and
improve the socio economy for a place (Cancilini 1992;
Murphy 2003). Through CE it will preserved and restored
culture, and as a result creating job opportunities to the locals.
However, the development of CI created criticism due to the
complex characteristics of the sector. Many developed and
developing countries embraced this concept to regenerate their
economy sector. According to UNCTAD (2008, p 12-13)
there are four most cited models of CI in the literature;
UKDCMS, Symbolic texts, Concentric circles and WIPO
model. Each model has its own rationale, depending on
underlying assumptions about the purpose and mode of
operation of the industries. UNCTAD (2008, p 12-13) have
classified four areas of CI;
i) Heritage – traditional cultural expressions and
cultural sites
ii) Arts – visual arts and performing arts
 iii) Media (not including new media) – publishing
and printed media and audiovisuals, and
iv) Functional Creations – design, new media and
creative services.
This classification showed the combination between
culture, tourism and CI sectors which are used by many
developing countries as their guideline to develop CI.
However, many developed countries omitted cultural tourism
such as heritage tourism from being part of CI (Cunningham
2002), but majority of developing countries included cultural
tourism products as part of their CI. Developing nations may
not have the creativity, innovation and technology resources
offered by the developed countries, but they have rich cultural
resources which can be used as a platform to develop their CI
and to compete with the developed countries (UNCTAD
2008) including Malaysia.
C. The history of creative economy development in Malaysia
The history of CI in Malaysia started when Vision 2020 to
make Malaysia a developed nation was announced by the
fourth Prime Minister of Malaysia during his speech in 1991
(Vicziany & Puteh 2004). Although he did not mention
anything about CI but it is believed that the establishment of
MSC in 1996 was based on that vision with the emphasis on
knowledge economy (Gray, Minges & Firth 2002).
Knowledge economy is one of the important parts in
developing CI sector (Cunningham 2002), which will then
contribute to the growth of CE for a place.The MSC project is
adapted from Silicon Valley. The twist was that the
development of MSC was started first before the Malaysian
universities started to offer professional training for human
resource required for the development of this project. This had
resulted into mismatched between work demand and supply in
Malaysia in this area and affected the growth of MSC project
(Vicziany & Puteh 2004). Compared to other developing
nations (for example China, India, and Vietnam) Malaysia is
far behind them. Another reason was due to the
misunderstanding of definition on knowledge economy itself
among Malaysian key players and policy makers. Knowledge
economy is narrowly defined as related to science and
technology (IT or ICT), and other high-tech activities and e-
commerce play a leading role (Evers 2003). Thus, most likely
this misunderstanding leads to further confusion among the
public about this sector and other relating components. Until
today, there is no clear definition and policy on CE and CI in
Malaysia compared to definition and policies on arts, culture
and tourism which have been introduced since the late 1980s
(Khalifah & Tahir 1997, p 177-178). As a result, the culture
and tourism sectors in Malaysia are more advanced in the
country compared to CE sector. The other main problem in
Malaysia is with their weak enforcement and implementation
of policies. There are also overlapping issues between the
ministries involved in cultural tourism and creativity sectors
(Pandiyan 2009). Pandiyan (2009) argues that, many
government departments in Malaysia are run under
fragmented and tiered structures, resulting in much duplication
or contradiction of duties. He continued by highlighting that,
523
the Malaysian civil servants are known for their ineffective
delivery of public service. Nonetheless, this is not the problem
faced only in Malaysia, as other developing countries such as
China, Indonesia, and India also facing with almost alike
problem particularly in dealing with policies issues (UNCTAD
2008, p 44). While, Sidhu (2009) claimed Malaysian
government have bureaucratic ways in dealing with many
issues particularly with creative talents. Due to that, the
country often loses their talents to other countries where their
talents are better appreciated. Nevertheless, Florida (2005)
stated that, this is a global phenomenon whereby the world is
competing for creative talents to reside in their cities.
D. Transformation phase
There have been many positive transformations taking
place since the early 2000s in Malaysia to support the
development of creative sectors. For the past five years, a
clearer understanding about knowledge economy has emerged
in Malaysia generally. The numbers of public and private
academic institutions offering CI programs for school leavers
have been growing substantially in Malaysia. There are at
least more than ten universities in Malaysia identified to have
Faculty of Creative Industries, centre, and department or with
similar name. These institutions especially government
universities, continuously send their staff all over the world to
get their post graduate education and training with full paid
salaries and scholarships. Apart from that, more international
skilled academicians worldwide are employed by these
universities. This is to provide and produce well trained
human capital especially to the local residents for Malaysian
future development, and to encourage research and
development (R&D) practises among the locals. This
development is in line with the Malaysia Ministry of Higher
Education (MoHE) policy to make the country’s education
sector competitive, and attract more international students to
study in the country.Malaysia is seen to move towards the
right direction in developing their CE, through enhancement
of their economic, technological, cultural, and scientific
creativity. These are the four domains of creative activity
formulated by Mitchell, Inouye and Blumenthal (2003, p 1) in
their book titled “Beyond Productivity”. These domains
shown in figure 1 are tightly coupled, and that activity in one
way depends on parallel activities in other sectors and
disciplines (p 22).
Figure 1 : Domains of creative activity

Another biggest changes is that, the current Prime Minister
of Malaysia, Dato’ Seri Najib Tun Razak constantly mentions
technology, creativity, and innovation in his speeches whether
when he is addressing education, religion, tourism and culture.
Many private organisations’ top management have also been
stressing the importance of culture, tourism and CI in their
speeches and planning. Main private conglomerates in
Malaysia such as Petroliam Nasional Berhad (Petronas), YTL
Corporation and AM Bank have also been working closely
with the government in boosting CI activities to an
international standard. In addition, Malaysia has become a
member of the World Intellectual Property Organisation
(WIPO) to protect the country’s IP and cyber space (MSC
2009). Beside, many policies to support the development of
CE have been introduced by many government organisations
(for example Ministry of Science and Technology [MoSTI]
and MoHE) to boost up the development of CI and to benefit
the CE sector (MSC 2010). Importantly, the development of
creative sectors in Malaysian has significant cultural
influence.
E. Cultural tourism industries
Malaysian culture has been playing an important role for
their socio economy since the 1950s. While cultural tourism
sector in the country managed to attract substantial number of
domestic and international tourists to the country. The World
Tourism Organisation (WTO) (2004) reported that cultural
tourism is one of the top three reasons people travel
domestically or internationally, especially in developing
nations in Asian region. As a result, many countries are
promoting their cultural tourism aggressively to local and
international tourists (Smith 2007, p 2). The cultural tourism
products have been repacked in order to attract the market.
This is when creativity, innovation and technology elements
are needed in today’s market for example in design, media and
advertising, and souvenirs items. Some authors (see
MacCannell 1976; Cohen 1979) argue these modern elements
in tourism alludes to ‘staged authenticity’ of false impressions
of acting. Traditional cultural fundamentalist criticised the
additional modern features to cultural products as being an
exploitation of culture, for commercialisation purposes.
However, Murphy (2003, p 262) stated that, this will add
value and create broad opportunities for cultural investment,
and also able to attract certain type of market. The outcome of
these will generate other opportunities for the local
community such as; employment, new businesses,
entrepreneurs/investors, good support policy and create new
idea (based on old forms) particularly for developing nations
(UNCTAD 2008). More research is needed to look at the
relationship between cultural tourism and creative sectors.
This current study will offer a platform to have a better
understanding on the connection between cultural tourism and
CI, which are the core area of CE specifically in Malaysia.
524
V. RESEARCH METHODOLOGY
This study is going to be undertaken in Malaysia, due to the
limited data on CE in this country. Two most important
components of CE which are cultural tourism and CI adopted
by two different organisations will be examined. Case studies
approach will be used to gain in depth knowledge, and robust
data from the organisations involved in cultural tourism and
CI products and services in Malaysia. This method is
necessary because it allows investigators to recognise complex
social phenomena (Yin 2003, p 2), which is the nature of this
study.
A. Research Area
Malaysia is a developing country in Asia and known as the
‘new world’ (Biswas 2000). It has a rich history with many
natural resources. The majority of the Malaysian population
are the Malays or Bumiputra (son’s of soil) who majority are
Muslims, followed by the Chinese, the majority of whom are
Buddhist; Indians, who are mostly Hindus; and other ethnic
minorities. Hence, Malaysia promotes multi-ethnic cultures as
its main image to the world. The tourism industry has become
one of the major contributors to the country’s economy since a
decade ago. In addition, cultural tourism has always been one
of the significant images of Malaysia in promoting the country
to the world (Musa 2000, p 145). However, Malaysia has not
fully utilised their creativity on their cultural resources,
compared to her nearest neighbour Singapore. This current
research will be among the first studies to analyse the
development issues of CE through cultural tourism and CI
products and services which offer experience to customers
about Malaysia. The experience of Malacca Maritime
Museum (MMM) and KRU Studios which contributed to the
development of CE will be looked at.
B. Research Design
The case study will be conducted in Malaysia for three
months. The first organisation is a state government museum
(MMM) located in Malacca city, and the second organisation
is a private visual and technology studios (KRU) in Cyberjaya
city. MMM offers cultural tourism as a core product with an
added creativity to give the riches experience to their
customers. In February 2009, the museum offered a new
addition to their product in the museum a program called
Sleepover @ The Museum to their visitors. This package offers
a chance to spend a night in the replica of 15th Century
Portuguese galleon Flo De Lama (Flower of the Sea) (Lai
2009). This program is an example of how cultural tourism
producer adopted new ideas to their products to make it more
appealing, and to become competitive in the market. The
second organisation KRU provides creativity and technology
as their primary product. Their products are combination of
multimedia and technology with Malaysian culture
particularly in animation, movies and 3D products. This has
created uniqueness and differentiation from other products in
the market.
 In order to get valid and reliable data a multiple sources
approach, such as document analysis, observation and
personal interviews, is proposed to be used (Yin 2003, p 42)
focusing on the development issues of CE in Malaysia. Two
stages of data collection will be employed. Firstly, document
analysis such as the Internet, annual report, brochures, journal
articles and newspapers on the development of CE in Malaysia
will be analysed to gather some background information about
this topic in the country. This secondary data information can
assist the study in preparing the interview questions, to be
used in the following stage, and help to answer RQ1: What is
the relationship between cultural tourism and the creative
industries?
Secondly, personal face-to-face interviews will be conducted
with both organisations using semi-structured interviews. The
key management personnel from both organisations will be
interviewed. Later their staffs from different management
level and job specification will be approached. These
interviews are needed to gain in-depth knowledge and
understanding about both organisations, and the services they
offered in contributing to the development of CE to the
country. This will help to answer the second research question
of this study which is RQ2: How experience industries in
Malaysia are being developed? Also, questions on the
development of CE through cultural tourism and CI in
Malaysia compared to other countries in the region, and the
country’s position will be asked. This will assist the study to
address RQ3: How does Malaysia positioning herself in the
creative industries in the region?
C. Pilot case studies on Malacca Maritime Museum, and
KRU Studios Sdn. Bhd.
Pilot case studies on Malacca Maritime Museum and
KRU Studios have been commenced from July until October
2009 electronically. This research has identified several
differences and similarities (refer table 1) between the two
organisations. At the same time, not much data can be
gathered from their website, and thus personal interview with
both organisations are necessary particularly to get their
respond and further understand about CE development in
Malaysia. Their perspectives as the key players are important
to have a better knowledge about this topic. The two
organisations combine culture, creativity, innovation and
technology to their products and services. At the same time,
they also maintain the authenticity of their products so that the
market will get Malaysia authentic experience, with creativity
elements to it. As Mitchell et al. (2003, p 1) pointed out, there
is no formula for creativity and it can takes different forms at
different times and in different places. These two Malaysia
organisations are examples of how they mould their own
products according to their environment to become
competitive and to better suit the market. As a result, they
offered something unique and different products and services
in the market.
525
Table 1: The Differences and Similarities between Malacca Maritime
Museum, and Kru Studio Sdn. Bhd.
Name Core product Differences Similarities
Case 1: Cultural State government owned Offered authenticity,
MMM tourism Cultural tourism products experience, creativity,
(museum, Located in World innovation, and technology
heritage, Heritage City
knowledge)
Case 2: Music, Film, Private owned Offered experience,
KRU Audio visual, Creativity and creativity, innovation, and
Animation technological products technology
Located in World
Intelligent City
VI. DATA ANALYSIS
All the in-depth interview responses with the organizations
will be transcribed to identify the most cited theme from the
interview. Thematic coding is appropriate for studies where
themes are defined a priori (Flick 1998). This coding will
enable this study to identify meaning within the data. Finally,
this research will do a comparative analysis between the two
case studies to find the similarities and differences between
them. As table 1 showed there are some similarities and
differences occurred from the two case studies. Nonetheless,
more rich data is expected to be obtained during the interview
stage by this present study, and will be presented in the study
findings in the final.
VII. EXPECTED FINDINGS
Rich data is expected to be collected from the two case
studies in Malaysia due to the differences of the location,
products and services offered by each organisation. Their
experienced as cultural tourism and CI producers in Malaysia
will be examined. This current study is expected to find some
major problems faced by these organisations in developing
their products and services. It is expected that, among the
development issues faced by them are on the weaknesses of
enforcing the existing policies formulated by Malaysian
government to support the development of creative economy.
This study will close the significant gap of research on
creative economy and other terms used to describe this sector
in Malaysia. It will show the major potential of this sector
specifically to Malaysian socio-economy, and other
developing nations in general. It is important to recognise that
this is a relatively new study area which needs further research
to refine the key concepts. This research is providing a
platform for future study to explore more about the topic
particularly in creative economy area through the combination
usage of cultural tourism and CI resources.
VIII. CONCLUSION
The successful collaboration between government and
private organisations is crucial in developing a new sector
such as CE and CI. Both parties need each other for the benefit
of their country’s socio-economy sector. As Florida (2005)
point out, creative cities need creative governments, creative
leadership, and creative communities. All stakeholders have to
work together for the success of CE which will benefit local
economies. Cultural tourism as the more traditional sector has
to work closely with other CI components to stay competitive
and relevant. CI has become the new additional characteristic
for most countries in developing and promoting their cultural
tourism products. Cultural tourism development is important
to preserve a country’s culture and values, while CI will assist
cultural tourism products to provide memorable, rich and
unique experience to the consumers. This will add more value
to the products and services, and will be more marketable.
These sectors are inter-connected and a good collaboration is
needed between the two. Through government support and
commitment these sectors can bring maximum benefit to the
socio-economic of the country. Also, the key players should
strengthen their networking among each other and
international companies to produce a competitive creative
economy sector. However, careful consideration has to be
given during the formulation of policies to avoid overlapping
with other sectors which may cause complexity during
implementation and enforcement. The priority of this study is
not to generalise the study findings, but rather to provide a
rich sound background for future studies to further investigate
this topic from different contexts and using different
approaches. This current research is expected to benefit the
key players in CE development, such as cultural tourism and
CI sectors, in gaining a better understanding about the
connection between them specifically in delivering experience
to customers. This will benefit both the academics and
practitioners to have a better knowledge about this topic in
developing nations. Further, this study will assist future
researchers with the foundations for their research directions,
and will remediate the gap in the literature on this topic.
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