Johor’s data centre boom: An ADUN’s perspective on growth and sustainability — Ng Kor Sim 

OCT 29 — My State, Johor is seeing a big rise in data centres. Many well-known companies from the United States, China, and Singapore are choosing to set up their facilities here. As a Johorean, I’m proud to see the State becoming a bigger part of the digital economy.

This did not happen by accident. Thanks to efforts by leaders like Prime Minister Datuk Seri Anwar Ibrahim, who understands our local needs, Johor and Malaysia is becoming a key part of the digital economy

This growth is bringing more business, better infrastructure, and new job opportunities, with benefits that can reach places like Segamat and Jementah too. Based on feedback from my constituents, they are excited with these developments.

Big gains, big potential

This is because data centres clearly bring benefits to Johor and the country. They’re boosting our economy with big investments, which reached RM31 billion last year, funding new facilities, improving infrastructure.

The Ministry of Investment, Trade and Industry (MITI), such as its Deputy Minister Liew Chin Tong, who is also Iskandar Puteri MP, has played a key role in bringing in these investments to Johor.

These projects don’t just benefit Greater Johor Bahru; smaller towns in the State like Segamat and Jementah also see gains through improved infrastructure, new business opportunities and enhanced social benefits.

When big companies like Microsoft and others start major projects in Johor, it helps put our state and the nation on the map as a global tech hub.

This can attract even more savvy investments and businesses in the future, creating more growth that reaches different parts of the state.

The downsides to watch out

But we can’t ignore the downsides. Data centres consume a lot of energy and water, potentially straining our resources, especially since Johor has faced water shortages before. We need to grow in a way that doesn’t harm the environment or local communities.

We must also balance land use carefully. Data centres take up a lot of space, and over- allocating land to them could limit growth in other sectors like agriculture or housing. It can also lead to less revenue and fewer potential jobs than if the land had been used for other economic activities.

As we know, data centres do not create as many jobs as we’d hope. Once they are built, they usually do not require too many staff on site.

We need to make sure that these centres generate as many good-paying jobs as possible for the locals, whether directly or otherwise.

Mitigating the downsides

To make sure this data centre boom really benefits the people in the long run, the government needs to take action. I am gratified to learn that the Ministry of Finance (MOF) and MITI are coming up with plans to make sure data centre investments bring long-term benefits.

MOF has suggested the introduction of a ‘scorecard’ to push companies to create good jobs, support local businesses, and prioritise sustainability. MITI’s guidelines for energy and water use are another positive step toward our zero-carbon goal for 2050.

Programmes like the Corporate RE Supply Scheme will help data centres use more renewable energy, making operations cheaper in the long run. These are all good efforts.

Learning from Singapore

As we move forward, we can look to Singapore’s experience with data centres, as our neighbour has had a head start in the sector. It has leveraged technology transfer to build a strong, knowledge-based workforce, boosting its digital economy. By setting robust environmental standards, such as energy and water usage guidelines, Singapore has also pushed for greener practices in the industry.

Our current data centre boom should be a reminder for us to keep investing in our people and infrastructure for long-term growth. We need to equip our youth with skills in cloud computing, cybersecurity, and AI, and upgrade infrastructure like high-speed internet and reliable power supply. This will lay the foundation for lasting success.

For now, let’s embrace this boom in data centres opportunity, but stay aware of the challenges. With careful planning, we can make Malaysia and Johor a tech hub that benefits everyone and to build a better future for our children.

*Ng Kor Sim is the State Assemblywoman for Jementah, Johor.

**This is the personal opinion of the writer or publication and does not necessarily represent the views of Malay Mail.