JUNE 11 — For as long as cities have existed, accessibility has shaped the value of land. This principle is not disappearing, but it is being revised. The digital economy has not made physical space irrelevant. It has made location more complex. Land is still valuable because of where it is, but “where” now means more than distance to roads, rail, town centres, or customers. It also means whether a location sits within a delivery radius, is visible to platform algorithms, is connected to digital infrastructure, and can support data-driven urban services. 

Foot traffic still matters, but service radius now matters too. Zoning plans still shape development, but algorithms increasingly influence how places perform. Traditional infrastructure remains important, but digital infrastructure is becoming part of the new urban value equation.

Retail value is no longer only about foot traffic

A good retail location was once mainly defined by strong foot traffic. That logic still applies, especially for businesses that depend on visibility and walk-in customers. However, it is no longer the only logic that matters. For many businesses, service radius has become just as important. A shop on a quieter secondary street may perform well if it is surrounded by dense residential areas and can serve customers efficiently through delivery platforms. A small food operator may no longer need premium frontage if most orders come through an app. A pharmacy, grocery store, laundry service may derive value not from how many people walk past, but from how many customers it can reach within 15 or 30 minutes. 

This changes the economic meaning of location. A less visible shop lot may become commercially viable if it is strategically located within a high-demand residential catchment. In many Malaysian cities, secondary shop lots, neighbourhood retail units, cloud kitchens, and small fulfilment points are gaining new relevance supporting delivery-based business models. Foot traffic is not irrelevant. It has simply been joined by another value driver: digital reach. The best location is no longer only where people pass through. It may also be where people can be reached quickly, affordably, and repeatedly.

Urban land value is no longer shaped only by roads, rail stations, zoning plans, and visible development patterns. It is also shaped by less visible digital systems. Algorithms now influence which areas receive demand, which businesses are discovered, which parcels become logistically attractive, and which routes become commercially viable. A logistics operator deciding where to locate a micro-fulfilment centre studies order density, travel time, delivery performance, customer behaviour, and platform demand patterns. A food delivery platform may increase the visibility of some restaurants because they sit within a high-demand service radius. A ride-hailing algorithm may repeatedly direct vehicles through certain neighbourhoods because the route is faster, even if this increases pressure on residential streets. 

Digital infrastructure is becoming part of the basic urban system. Broadband connectivity, data centres, cloud infrastructure, digital payment systems, urban sensors, platform networks, and geospatial data are no longer separate from the built environment. — Pexels pic

This means location advantage is increasingly co-produced by physical infrastructure and digital visibility. A shop lot may be physically accessible, but commercially weaker if it is poorly positioned within platform search, delivery coverage, or customer data flows. Conversely, a less prominent location may become viable if it performs well within algorithmic systems that connect demand, distance, and delivery efficiency.

At the same time, digital infrastructure is becoming part of the basic urban system. Broadband connectivity, data centres, cloud infrastructure, digital payment systems, urban sensors, platform networks, and geospatial data are no longer separate from the built environment. They influence where businesses locate, how services are delivered, how people move, and how land is used. This creates a new planning reality. Local authorities continue to regulate land through zoning, density control, infrastructure provision, and development approval, while private platforms quietly shape urban activity through routing, ranking, pricing, and service allocation. These systems may reinforce each other, but they may also work at cross purposes. 

The issue is not that algorithms or digital tools are bad for cities. They can help local authorities understand land use patterns, detect congestion pressure, optimise infrastructure use, monitor pollution, and plan cleaner urban development. The concern is governance. If algorithms and digital infrastructure increasingly influence land value and urban activity, their effects must be made more visible, explainable, and accountable.

For the built environment sector, this marks an important shift. Planners, valuers, developers, quantity surveyors, and policymakers can no longer assess land value only through frontage, accessibility, surrounding development, and infrastructure. They must also consider digital indicators such as platform visibility, service radius, delivery efficiency, data connectivity, proximity to demand clusters, and exposure to algorithmic traffic flows.

The digital economy should not be treated only as a technology agenda. It is also a land use agenda, an infrastructure agenda, and a governance agenda.

Economic resilience in the digital age

The digital economy also changes how cities absorb shocks. Floods, traffic congestion, pandemics, supply chain delays, rising operating costs, and changing consumer behaviour all affect how businesses survive. In the traditional urban economy, many businesses depended heavily on physical access. If customers could not reach the shop, revenue declined. If a road was flooded, a shopping district became temporarily inactive. If workers could not commute, office-centred economic activity slowed. 

The digital economy introduces a second channel. Businesses can now reach customers through online platforms, delivery networks, digital payment systems, social media marketing, and remote service models. A cafe, pharmacy, grocery shop, tuition centre, clinic, or small retailer is no longer limited only to walk-in customers. This does not remove vulnerability, but it creates redundancy. A city that depends only on foot traffic is more exposed. A city where businesses operate through both physical and digital channels has more room to adapt. When one channel weakens, another can partially absorb the pressure.

In Malaysia, this has practical significance. Monsoon floods disrupt road access. Traffic congestion affects delivery reliability and business productivity. Urban households increasingly expect convenience, speed, and flexible services. Under these conditions, digital capability becomes part of economic resilience. However, digital resilience is not automatic. It depends on infrastructure quality, affordability of digital tools, platform fairness, logistics capacity, data governance, and the ability of small businesses to participate. Large firms are often better positioned to use data and optimise delivery networks. Small retailers may struggle with platform fees, digital skills, and visibility in crowded online marketplaces. 

This is where urban policy matters. Cities need reliable broadband, efficient logistics spaces, flood-resilient infrastructure, inclusive digital support for small businesses, and better coordination between land use planning and platform-driven urban activity. The digital economy should not be romanticised as a cure for urban vulnerability. It is better understood as an additional layer of resilience. It gives businesses alternative ways to reach customers, gives cities better data to manage disruption, and gives local economies more flexibility when physical systems are under stress.

The digital economy has not made land less important; It changes what makes land valuable. In Kuala Lumpur, urban value is now shaped by layered interactions between roads, buildings, zoning, foot traffic, digital reach, and algorithms. Yes, location still matters, but rules that define a valuable location are being rewritten.

* The authors are senior lecturers at Faculty of Built Environment, Universiti Malaya. 

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

JUNE 3 — There was a time when the future arrived in Malaysia wearing a hard hat. It came as highways, ports, airports, industrial parks, semiconductor factories and towers rising above old kampungs. We understood that version of development. It was visible. You could photograph it, cut a ribbon in front of it, put it in a manifesto and call it progress.

The new future arrives differently.

It comes in grey boxes outside Johor Bahru. It hums behind fences. It drinks electricity by the gigawatt and water by the million litres. It has no romance, no public face, no national anthem. It is a data centre. And increasingly, it may be one of the most important buildings in Malaysia.

Not because it employs thousands. It usually does not. Not because it transforms a neighbourhood like a port, university or factory might. Often, it does not. Its importance lies elsewhere. A data centre is where the modern economy keeps its nervous system. Cloud computing, artificial intelligence, banking, e-commerce, logistics, government databases, streaming platforms and the invisible machinery of daily life all pass through these facilities.

The great irony is that the so-called digital economy is brutally physical. Artificial intelligence may feel weightless when it appears on a phone screen, but behind every prompt sits a machine that must be powered, cooled, secured and connected. The future may be digital, but it runs on copper, concrete, gas, substations, transmission lines and political choices.

Malaysia is now discovering this at speed.

Malaysia faces a tougher question, according to the author: is it building its own digital economy, or simply becoming the utility room for someone else’s digital empire? — AFP pic

The country has stumbled into one of the defining economic opportunities of the decade. Singapore, long the region’s natural data-centre capital, became constrained by land, power and environmental limits. The island understood early what others preferred to ignore: the cloud is not in the sky. It is on the grid. It consumes land. It creates emissions. It competes with homes, factories and public infrastructure for power.

So Singapore slowed, paused, rationed and became selective. And when Singapore becomes selective, Johor becomes interesting.

Malaysia suddenly found itself in the sweet spot. Land was available. Power was cheaper. Connectivity to Singapore was close. Political leaders wanted investment headlines. Global technology companies needed capacity. Chinese cloud players wanted regional options. American hyperscalers wanted scale. Investors wanted the next big Asean infrastructure story.

On paper, this looks like a triumph. Billions in pledged investment. A stronger role in the digital economy. A chance to move Malaysia beyond assembly, commodities and low-value services. A chance to become not just a consumer of technology but a host to the infrastructure that powers it.

But this is where the romance must end.

The question is not whether Malaysia should welcome data centres. Of course it should. The question is whether Malaysia understands what it is welcoming. Because data centres are not just investments. They are long-term claims on national resources.

A factory can expand exports. A university can create talent. A port can reshape trade. A semiconductor plant can deepen industrial capability. But a poorly governed data-centre boom can become something more awkward: a country selling cheap electricity, water and land to foreign technology giants while telling itself it has joined the AI revolution.

That is the danger.

Malaysia must ask a harder question: are we building a digital economy, or are we becoming the utility room for someone else’s digital empire?

The numbers are already flashing amber. Peninsular Malaysia’s electricity demand recently hit record levels, with rising data-centre activity one of the factors behind the surge. Gas-fired generation jumped sharply, even as Malaysia says it wants to move towards cleaner energy. Coal still dominates the generation mix, while gas is being pushed harder to meet new demand.

This is the contradiction at the heart of Malaysia’s AI dream. We speak the language of green transition, digital transformation and high-value investment. But underneath the slogans, the servers need power now. Not in 2040. Not after another roadmap. Now.

And data-centre demand is not normal demand. A mall peaks in the evening. A household rises and falls with human rhythm. A factory may have shifts. A data centre wants power all the time. It does not sleep during Hari Raya. It does not take a long weekend. It is a permanent baseload animal.

This is not a Malaysian problem alone. It is happening everywhere.

Ireland is the cautionary tale. Dublin marketed itself brilliantly as a European technology hub. Big Tech came. Then came the data centres. Before long, the grid became a political issue. A small country discovered that it could run out of electricity capacity before it ran out of ambition.

Northern Virginia, the data-centre capital of the world, offers another warning. It had fibre connectivity, land, customers and early advantage. Then came congestion, transmission battles, community anger and rising power concerns. The lesson is blunt: once a region becomes a data-centre magnet, the grid becomes destiny.

Even Texas, a state that talks about energy the way others talk about football, is asking harder questions. Developers there increasingly have to think about whether they can bring their own power, manage grid impact or secure generation. When Texas starts worrying about AI load, Malaysia should not be casually waving every project through the door with a garland and a press release.

Singapore provides the most relevant comparison. It did not abandon data centres. It upgraded the terms of admission. It moved from “come one, come all” to “prove efficiency, prove sustainability, prove strategic value.” That is the discipline Malaysia now needs.

Because the real issue is not how many billions are announced. Malaysia has always loved announced investment. We are world champions at the ceremonial handshake, the oversized mock cheque and the ministerial quote about confidence in the economy.

The real issue is value capture.

What does Malaysia actually get?

If a hyperscale data centre consumes enormous power but creates limited jobs, imports much of its equipment, receives incentives, pays tariffs that do not fully reflect grid expansion costs, and serves mostly foreign customers, then the country must ask whether the bargain is as good as the press release suggests.

This does not mean the answer is no. It means the answer cannot be assumed.

A serious data-centre strategy must be judged by five questions.

First, does it create high-value Malaysian jobs, or merely security posts and maintenance contracts? The best ecosystems create engineers, energy managers, cybersecurity specialists, cloud architects, cooling experts and AI infrastructure talent. The worst create fenced warehouses of servers with minimal domestic spillover.

Second, does it deepen Malaysia’s technology stack? If data centres are paired with cloud services, AI labs, local enterprise adoption, semiconductor design, sovereign cloud capability and university partnerships, they can be transformative. If they are merely storage and compute boxes, they are closer to digital real estate.

Third, does the investor pay the true cost of power? Grid expansion is not free. Gas supply is not free. Transmission upgrades are not free. Backup capacity is not free. If the state socialises the cost while private operators capture the margin, Malaysians will eventually discover that the AI revolution has quietly appeared in their electricity bills.

Fourth, does the project help or hurt the energy transition? If AI demand forces Malaysia to burn more gas, delay fossil-fuel retirement and build more thermal capacity, then the digital economy becomes a climate contradiction. We will be selling green slogans at conferences while firing up gas turbines to cool foreign servers.

Fifth, does Malaysia retain strategic control? This is where geopolitics enters the server room.

Data centres are no longer neutral commercial assets. In the age of AI, they sit at the intersection of US export controls, Chinese technology ambition, semiconductor supply chains, cybersecurity, data sovereignty and energy security. A country that hosts data centres is not just hosting machines. It is hosting geopolitical interest.

Malaysia’s position is delicate. We want American investment, Chinese capital, Singapore connectivity, Gulf money, Japanese credibility and European standards. This is classic Malaysian hedging. It has worked before. But AI infrastructure makes hedging harder because advanced chips are now strategic assets, compute capacity is becoming national power, and Southeast Asia is increasingly viewed as a back door, buffer zone or battleground.

The danger is not merely that Malaysia gets caught between Washington and Beijing. The danger is that Malaysia becomes useful to both but respected by neither.

That is why this boom must be treated as national strategy, not just investment promotion.

Miti cannot see it only as FDI. Mida cannot sell it only as confidence. TNB cannot treat it only as load growth. Petronas cannot see it only as gas demand. State governments cannot treat it only as land conversion. This is a whole-of-government issue.

Malaysia needs a national data-centre doctrine.

Not another glossy blueprint with a foreword, a slogan and 47 pages of consultant language. A doctrine. A hard framework that says what Malaysia wants, what it will accept, what it will reject, and what price investors must pay for access to our grid, water, land and strategic location.

The doctrine should be simple.

Prioritise high-efficiency, high-value, AI-ready facilities that bring technology transfer, renewable procurement, advanced cooling, local talent development and strategic cloud capability. Be less enthusiastic about low-value, energy-hungry warehouses chasing cheap power and incentives.

Require large operators to bring or finance additional clean power. Not imaginary green certificates. Real additional capacity. Solar, storage, firmed renewable supply, grid upgrades and transparent power purchase structures.

Create a grid-impact pricing mechanism. Large loads should pay for the infrastructure they trigger. Otherwise, the cost disappears into tariffs, public balance sheets or delayed investment. There is no magic in electricity. Someone pays.

Link approvals to domestic spillover. A major data-centre project should come with commitments on Malaysian technical employment, university partnerships, cloud credits for local startups, cybersecurity capability, SME vendor development and AI adoption by local industry.

Finally, Malaysia must stop pretending that energy policy and industrial policy are separate. They are now the same conversation. In the old economy, cheap energy attracted factories. In the new economy, reliable clean energy attracts AI infrastructure, semiconductor investment, electric mobility, green manufacturing and high-value services. Power is no longer just a utility. Power is industrial strategy.

For decades, Malaysia’s political economy was built around cheapness. Cheap petrol. Cheap power. Cheap food. Cheap foreign labour. Cheap land, if you knew the right person. Cheap slogans about transformation.

But the AI economy is not cheap. It is capital-intensive, power-hungry, geopolitically sensitive and unforgiving. Countries that get the infrastructure right will move up. Countries that confuse investment announcements with strategy will become hostels for other people’s machines.

Malaysia should welcome the servers. But it should not kneel before them.

It should say: come, build, invest, innovate, hire, transfer knowledge, buy clean power, pay for the grid, respect our water, protect our data, train our people and deepen our economy.

If you want our electricity, strengthen our country.

That should be the bargain.

Because in the end, the AI race will not be won by speeches about digital transformation. It will be won by countries that understand the hard, unglamorous truth beneath the glittering language of the future.

The future needs power.

And power, in every sense of the word, is what Malaysia must learn to price.

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

KUALA TERENGGANU, June 2 — Bumiputera ownership should not be confined to small-scale businesses but must progress towards controlling larger segments of the value chain, says Deputy Prime Minister Datuk Seri Dr Ahmad Zahid Hamidi.

Ahmad Zahid, who is also Rural and Regional Development Minister, said Bumiputera entrepreneurs should no longer be viewed merely as small vendors, ancillary suppliers or players at the end of the industrial chain, but instead be elevated to become principal manufacturers, technology owners and market leaders.

“In the halal industry, for instance, Malaysia’s strength cannot stop at certification alone. Halal must become a value chain that we control, from raw materials, processing, packaging and logistics to marketing and international markets.

“That is why the proposal to establish a consortium of large-scale Bumiputera anchor companies to produce critical raw materials such as halal gelatine, enzymes and active pharmaceutical ingredients should be regarded as a strategic move. We must reduce dependence on imports and build Bumiputera capabilities in high-value halal sectors,” he said when delivering the keynote address at the 2026 Bumiputera Entrepreneurs Economic Convention (KEUB) at the Terengganu Equestrian Resort here today.

At the same time, he said many Bumiputera entrepreneurs in the food and franchise sectors possessed quality products but continued to face challenges in terms of costs, operational scale, standards and market access.

“Therefore, approaches such as group purchasing, centralised commercial kitchens and franchise incubator models can serve as pathways to consolidate purchasing power, standardise quality and elevate Bumiputera brands to a higher level,” he said.

Ahmad Zahid also urged more Bumiputera entrepreneurs to venture into future-oriented sectors such as aero-tech, drones, automation and high-technology industries.

“Bumiputera youths cannot remain merely consumers of these technologies. They must become technicians, designers, component suppliers, service providers, and, ultimately, owners within the industrial value chain.

“This is the true meaning of economic empowerment. Bumiputera entrepreneurs must be moved out of limited and restricted spaces into more strategic positions within the nation’s value chain,” he said.

Meanwhile, Ahmad Zahid said the measurement of Bumiputera economic success must be redefined, no longer focusing solely on participation but placing greater emphasis on control and ownership in high-value economic sectors.

“For too long, we have measured success through participation. How many Bumiputeras are in business, how many entrepreneurs use digital platforms, and how many youths are involved in the gig economy. All these are important, but they are not sufficient because in today’s economy, particularly in the digital platform space, participation does not necessarily lead to ownership.

“That is why the true value of the digital economy lies not merely in transactions. Its real value is in platform ownership, data control and equity creation. In that spirit, I would like to see a bolder effort to develop large-scale, competitive Bumiputera digital platforms capable of becoming Malaysian brands,” he said.

In addition, Ahmad Zahid said Bumiputeras must move beyond being technology users and become value creators through technology to remain relevant and competitive in the new economy driven by data, automation and artificial intelligence (AI).

Accordingly, he said the necessary shift was to build Bumiputera strength in the technology sector so that they would not merely use applications but become application developers and owners of technology solutions.

Ahmad Zahid also called for the entire Bumiputera economic ecosystem to be mobilised in a more integrated manner, uniting policy, capital, technology, talent, markets and courage into a national movement capable of delivering meaningful impact.

“I believe that when Bumiputeras own platforms, master technology and lead value chains, we will not only build a stronger economy but also a community that is more confident about its future,” he said. — Bernama