Since the adoption of export-oriented strategies, Penang has been exporting consumer products targeted at advanced economies. But the regional economy is at a crossroads: Penang is no longer a high growth economy and a low cost centre. Following the current economic crisis, Malaysia’s traditional market will wane as consumers in the advanced economies are not able to consume as much as they used to. China, India, Indonesia and Vietnam produce cheaper consumer goods than Malaysia, having paved the way to frugal innovation.