Wednesday September 1, 2004

Malaysia challenges India and China

By Jonathan Kent
BBC, Kuala Lumpur

Malaysia's young can make a lot of money working for foreign firms
It might be politically sensitive, but it makes good economic sense for business leaders to outsource service sector jobs to less expensive parts of the world.
Just as it did when textile factories moved from the industrial towns of Europe and North America to India, the Far East and Latin America.
People in the wealthy West are now getting used to the idea that the person answering the phone, dealing with a banking enquiry or a problem with a faulty television could as easily be sitting in Beijing or Bangalore as in Bangor or Baltimore.
Earlier this year, management consultants A T Kearney rated India and China as the two most attractive countries for businesses looking for outsourcing opportunities.
That is hardly a big surprise, though Malaysia's third place in the survey was.
The South East Asian nation has been trying to position itself as a high tech hub ever since the mid-nineties, when its former prime minister, the technology loving Dr Mahathir Mohamad, launched the Multimedia Super Corridor (MSC) with the support of IT luminaries including Bill Gates.
The corridor is basically a zone around Kuala Lumpur where companies can locate, enjoy tax breaks and a guarantee that the infrastructure will work with a money back deal if it does not.
Hitherto, Malaysia has, if not spurned, then at least not encouraged the likes of call centres. It wanted biotech, IT hardware, software design and other industries to make Malaysia their home.
But this September it hosts the 2004 Asia Pacific Outsourcing Conference and according to Rob Cayser of the MSC Development Corporation there is something of a buzz in the air.
"This time last year we were getting one or two enquiries a month from international companies thinking of moving here," he says.
"Now they're coming in at the rate of five or more a week."
Asia is bouncing back from the financial crisis of 1997 and 1998 and more lately the Sars virus. Companies want a piece of the action.
Malaysia's central bank says the economy here grew at 7.6% during the first quarter and at 8% during the second. Singapore is growing even faster.
Malaysia is working hard to sell its advantages to potential investors.
"Many companies are finding that for high value services required to run a global business these days - such as management, executives and technical staff - you need a large pool of those," says Mr Cayser.
"They need to be English speaking but you need the cost to be right", and it is this that makes Malaysia stand out.
Just over the road from Kuala Lumpur's landmark, the Petronas Twin Towers, there is a call centre run by Scicom.
It handles enquiries from customers of the mobile phone maker Nokia from around the Asia Pacific region.
It is a relaxed and pleasant office, a far cry from the cramped, high pressure call centres which are the employment option of last resort for many in the West.
Here they field calls in nine different languages including Indonesian, Japanese, Korean, Mandarin, Malay, Tagalog, Thai and English.
Scicom's chief executive, Leo Ariyanayakam, says Malaysia's position at the crossroads of Asia is reflected in the number of languages spoken here, and what they cannot find locally they can import.
"Besides having five Asian languages that we can find [spoken] natively, there's great quality of life so we are able to attract people from the Philippines, Thailand and Indonesia to work here quite easily," he says.
For more than two decades, Malaysia's education policies have resulted in students travelling to the West in their thousands, either on government grants or because they cannot find places in local universities.
Mr Ariyanayakam says that gives Malaysia a real edge over its competitors.
"We have great English language skills, primarily because Malaysia has 50,000 graduates coming out each year from the US, UK Australia and New Zealand," he says.
"That allows us to have a great pool of people that have lived in the West and that's a huge advantage over countries like the Philippines or India."
Aisalli Ayub has been working at Scicom for over two years and is now a supervisor.
Ms Ayub found her time studying in Australia meant that she was able not just to understand what her customers were saying, but their situation as well.
"I was at Griffith University in Brisbane and I was familiar with the locations especially in Queensland," she explains.
"So when customers informed me they were from a rural area, I knew immediately that they were not able for instance to go to the service centres."
"That certainly beats having someone casually tell you to drive 1000km to drop off your phone.
Ms Ayub also believes it makes a difference that she understands not just the accent but also the humour.
"In Australia people prefer to be informal," she says.
"Even when they're a lot older than myself, they prefer to be called by their first name for instance," she says.
Similar experiences are less likely to be had by employers in India and China where students who study in the West tend to be from wealthier backgrounds, students who do not want to work in call centres.
In Malaysia, though, people from all backgrounds have a foreign education where there is something of a glut of graduates from Western universities.
Harinder Dev Singh, who studied at Middlesex University in London, says money is another major factor.
"When you're starting off as an agent, you get paid almost twice what you'd get paid if you were starting as an auditor or an accountant as a fresh graduate, maybe $300 more," he explains.
"I had a few friends who read accounting at University and they came back and joined one of the major accounting firms and I was being paid quite a significant amount more."
A new recruit to a call centre can easily make $700 or more a month. That is good money for a young twenty-something in Malaysia.
It means that foreign employers can get their pick of graduates. If Malaysia once spurned call centres, it is not now.

Parent site: "Focus on Malaysia"