Industrial Transformation in ASEAN A Cluster-Driven Model for Regional and Global Collaboration 2026

Clear, predictable and coordinated policy signals anchor investor confidence and set the pace for transformation at early stages. In clusters, policy acts as both enabler and integrator, translating national ambitions into practical mechanisms that drive industry behaviour. Clusters serve as test beds for policy learning, helping governments refine standards, permitting rules and incentives before national rollout. 3.2 Policy CASE STUDY 4 Johor Transitioning Industrial Cluster (JTIC): Advancing sustainable growth across Johor Context: Iskandar Puteri, Sedenak, and the Pengerang cluster, located within the JS-SEZ, would form the Johor Transitioning Industrial Cluster (JTIC), an aspirational framework. Where Sedenak, through the Ibrahim Technopolis (iBTEC) and the Sedenak Tech Park (STeP), focuses on AI and digital activities, Iskandar Puteri focuses on biopharma, life sciences and manufacturing, and Pengerang (Pengerang Integrated Petroleum Complex) focuses on manufacturing, energy and logistics. Objective: The JTIC is being outlined as a potential pathway to connect these complementary areas into an integrated, low-carbon industrial ecosystem over time, supporting cross-sector collaboration, high-value job creation, and sustainable industrial development aligned with Johor’s long-term competitiveness and energy transition goals. Intervention: Under the Johor Economic Transformation Plan (JETP), the JTIC concept provides an opportunity to transition Johor’s growing industrial base. Key opportunities include the development of renewable energy sources and shared energy systems, building common carbon infrastructure, securing long-term renewable energy supply for hydrogen and derivative products, and circular economy solutions enabled by digital infrastructure. These development envisaged under the JTIC concept would be undertaken in support of multiple existing state and federal planning frameworks, such as the Johor Sustainable Development Plan 2030, guiding economic and digital investment, major transport and infrastructure development, and environmental conservation;109 the Johor Green Deal, focusing on promoting green energy, low-carbon cities and sustainable industries;110 the Johor AI council initiative to drive the digital economy and AI development ecosystem in the state; the National Energy Transition Roadmap;111 the New Industrial Master Plan 2030;112 the 13th Malaysian Plan 2026–2030;113 and Iskandar Malaysia’s Comprehensive Development Plan iii 2022-2030.114 This broader policy environment also supports investment through fiscal and non-fiscal incentives under the JS-SEZ and related state mechanisms. Fiscal measures include special corporate tax rates and preferential tax treatment for knowledge workers. Non-fiscal support includes the Invest Malaysia Facilitation Centre Johor (IMFC-J) as a one-stop investment facilitation platform; the Johor Super Lane (JSL) to accelerate the investment and development process and create a competitive business-friendly environment;115 and the Johor Talent Development Council (JTDC), which supports talent pipeline development aligned with industry needs. Johor presents a compelling proposition for industry and investors seeking to deploy AI at scale within an industrial economy. Beyond incentives, the state’s focus on governance, talent and cross-sector coordination, soon anchored by the Johor AI Council, helps reduce execution risk and supports more responsible and sustainable AI deployment. Arina Binti Ramlee, Chief Technology Officer, Cybersolution Technologies Industrial Transformation in ASEAN: A Cluster-Driven Model for Regional and Global Collaboration 20