KUALA LUMPUR: Iskandar Malaysia has attracted RM525.26 billion in investments over two decades, exceeding its original RM383 billion target by RM142.26 billion, as Johor's flagship economic corridor shifts towards higher-value industries and deeper cross-border integration to sustain its next phase of growth.
The focus is now on translating investment momentum into higher productivity, better-paying jobs and stronger domestic supply chains, with the Johor-Singapore Special Economic Zone (JS-SEZ) expected to play a pivotal role in positioning the region as a more competitive regional business and industrial hub.
According to the Iskandar Regional Development Authority (IRDA), the corridor has generated more than one million jobs and more than doubled average household incomes since its establishment.
With competition for investments intensifying across Asean, IRDA is shifting its priorities from broad-based expansion towards quality investments that deliver greater economic value, strengthen local businesses and create opportunities for Malaysians to move up the value chain.
The next phase will prioritise advanced manufacturing, digital and data-driven industries, modern logistics, and high-value financial and business services, positioning Iskandar Malaysia to capture a greater share of regional and global economic activity.
"For the next development phase, emphasis will be placed on increasing productivity and high-value economic activity, including advanced manufacturing, digital and data-driven industries, and logistics, as well as financial and business services," IRDA said in a statement.
The authority said the emphasis would extend beyond the value of investments secured to include technology transfer, domestic business participation, local innovation and the ability of Malaysian companies to move up the global value chain.
At the centre of this strategy is the Johor-Singapore Special Economic Zone (JS-SEZ), which is expected to strengthen the economic relationship between the two markets by combining Johor's industrial capacity and competitive operating expenses with Singapore's access to international capital, technology and business networks.
The JS-SEZ attracted RM76.98 billion in approved investments in 2025, underscoring Johor's growing appeal as a complementary investment destination for businesses seeking to expand their regional operations.
Deputy Prime Minister II and Energy Transition and Water Transformation Minister Datuk Seri Fadillah Yusof said the next phase of Iskandar Malaysia's development must be measured by the quality and sustainability of its economic gains, rather than investment figures alone.
Fadillah chaired the 36th IRDA Governing Council meeting on behalf of Prime Minister Datuk Seri Anwar Ibrahim, alongside Johor Menteri Besar Datuk Onn Hafiz Ghazi.
"The next phase should be assessed not only by the total investment attracted but also by the quality of opportunities created, the strength of the economic ecosystem, and the long-term benefits that businesses and communities can enjoy," he said.
IRDA said land availability and competitive costs, once major considerations for investors, were no longer sufficient to secure a competitive advantage as businesses increasingly assessed the readiness of infrastructure, reliability of energy supply, availability of skilled workers and quality of digital connectivity.
The efficiency of cross-border movement for goods and people, as well as access to regional and international markets, has also become increasingly important in investment decisions.
In this regard, the JS-SEZ offers an opportunity to create a more integrated economic ecosystem by leveraging the complementary strengths of Johor and Singapore.
"Johor has the opportunity to combine advantages in land, industrial capacity, talent, and cost with Singapore's strengths in capital, technology, business services, and access to international markets.
"However, realising the JS-SEZ potential requires alignment in infrastructure development, energy supply, talent development, customs and immigration processes, and cross-border connectivity," IRDA said.
Olive Tree Property Consultants founder and chief executive officer Samuel Tan said the corridor's next phase would depend on how effectively these complementary advantages could be translated into tangible business benefits.
He said investors were increasingly looking beyond low operating expenses and land availability, with infrastructure readiness, dependable energy supply, access to skilled talent and seamless connectivity becoming critical factors in determining where companies establish or expand their operations.
"The JS-SEZ creates a significant advantage by bringing together complementary strengths that no single jurisdiction could offer in isolation. This includes Johor's abundant land, established industrial capacity, growing talent pool and competitive operating expenses, alongside Singapore's global capital networks, technology, business services and access to international markets," he told Business Times.
However, Tan said the zone's long-term competitiveness would depend on effective coordination between the two jurisdictions, particularly in infrastructure planning, energy security, workforce development and the movement of goods and people across the border.
Streamlining customs and immigration procedures and strengthening physical and digital connectivity would also be essential to improving operational efficiency for businesses operating across both markets.
For Iskandar Malaysia, the challenge is to convert its investment momentum into a more sophisticated economic base that delivers sustained productivity gains, higher-value jobs and greater participation by domestic companies.
The success of the JS-SEZ will therefore be measured not only by its ability to attract more capital but also by how effectively it integrates businesses, develops local talent and strengthens Johor's position in regional and global supply chains.
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