Johor, Malaysia, has initiated a 7,300-acre innovation sandbox, which is a component of a newly established special economic zone shared with Neighboring Singapore.

The 7,300-acre project, christened Ibrahim Technopolis (IBTEC), is situated inside the Johor-Singapore Special Economic Zone, a fresh strategic alliance between Singapore and Malaysia intended to create over 20,000 jobs for people on both sides of the causeway. Conceived as Asia’s most extensive innovation testing ground, it will focus on high-value sectors such as medtech, logistics, data centers, and agritech. 

IBTEC, formally launched on Dec. 2, will make “production smarter, supply chains more resilient and operations more efficient,” said developer JLand Group, the real estate arm of Johor Corporation, in a press statement. 

The technology hub is included in a wider strategy to leverage Johor's closeness to Singapore for drawing capital into cutting-edge sectors and other sophisticated production. 

Malaysia and Singapore officially launched the special economic zone earlier this year. A component of the accord includes provisions to facilitate movement between Singapore and Johor, which is already among the most heavily trafficked land border crossings globally. 

Officials have high hopes for the SEZ. The goal is to make it a “regional champion,” and not just “an industrial park with a nicer brochure,” YB Lee Ting Han, chair of the Johor State Investment, Trade, Consumer Affairs and Human Resources Committee, said at the Coins2Day Innovation Forum on Nov. 17. 

Johor, along with Malaysia overall, provides foreign corporations with reduced expenses and enhanced availability of assets such as property, even while these businesses persist in locating their more valuable operations in pricier Singapore. 

“While Johor offers land and scale, Singapore offers capital and speed. So this is the opportunity that I feel we need to capitalize [on], where we can complement each other,” Datuk Syed Mohamed Syed Ibrahim, Johor Corporation’s president and CEO, told the audience at the Coins2Day Innovation Foru m on Nov. 17.

Tapping the data center boom

Demand for data centers has skyrocketed as a reaction to the surge in artificial intelligence. Nations across Southeast Asia aim to draw in fresh data center funding from companies seeking affordable energy and access to rapidly expanding markets within the area. 

Emerging economic entities such as IBTEC have arisen to accommodate and oversee essential IT systems, supplying the processing capabilities needed for training AI models using extensive data collections. 

Due to Singapore's limited territory and expensive industrial electricity rates, investors have been drawn to look northward; Johor's electricity rates are set at 13.5 cents per kilowatt-hour, which is nearly half of the 23.9 cents levied by its adjacent city-state.

StepEast, a data center located within IBTEC, has successfully attracted over 30 billion Malaysian ringgit ($7.28 billion) in funding from 11 global operators, according to the Business Times, a Singaporean newspaper. This total encompasses significant contributions from major players like tech conglomerates like Microsoft.

“We are building the infrastructure, systems and execution capacity so that investors can come in faster and grow with more certainty,” Datuk Sr. Akmal Ahmad, the group managing director of JLG and JCorp’s director of real estate and infrastructure division, said in the Dec. 2 statement. 

Data center operators are taking notice. “Johor is adding data center capacity at a speed and scale I’ve not seen ever anywhere else,” Rangu Salgame, the chief executive of Princeton Digital Group, a data center provider headquartered in Singapore, told Coins2Day in April.

Benefits for local businesses and SMEs

JLG further stated that despite its immense scope, IBTEC will prioritize the requirements of SMEs and businesses within Malaysia. This initiative will provide them with communal amenities and adaptable workspaces, facilitating partnerships with more substantial industry entities.

“We will measure IBTEC’s success not only by the investments it attracts, but by how it helps Malaysians and Johoreans move up the value chain—as workers, entrepreneurs and communities,” said Akmal Ahmad. “That is how we intend to prove the real impact of this ecosystem.”

“We really need to be able to connect our SMEs to global supply chains and to create brands owned within the zone,” Lee, from the Johor state government, said at the Coins2Day Innovation Forum.

IBTEC will also empower Malaysian startups to more effectively engage in regional supply chains, create fresh opportunities for local business owners, and advance the Southeast Asian country's objective of attaining sustainable, innovation-driven progress.

“IBTEC is an investment for the next generation, and a signal that Johor is ready to compete on a different frontier,” Syed Ibrahim added in JLG’s press statement. 

Malaysia overall has secured 285 billion Malaysian ringgit ($69 billion) in authorized investments, defined as proposed projects that have obtained all required permits, during the initial nine months of the year. This figure represents a 13% increase compared to the same period last year, as indicated in a December 3rd report by Nomura. The state of Johor accounts for nearly one-third of this aggregate amount, with investments directed to the state reaching 91 billion ringgit ($22 billion) in the first three quarters of 2025.

Nomura now expects Malaysia’s economy to grow by 5.2% next year, up from an earlier forecast for 4.0%. “We expect strong investment-led growth to persist into 2026, sustained by the implementation of more reforms and infrastructure projects, and progress in the Johor-Singapore Special Economic Zone (JS-SEZ),” Nomura’s analysts wrote in their Dec. 3 report.