The second wave of entrants, starting from 1986, was composed of giant consumer electronic firms attracted by generous tax incentives, soon to be followed by leaders in the disk drive and computer segments (Rasiah, 2006). Apart from protection, the state was instrumental in providing subsidies for acquiring foreign technologies, e.g. for the national car project “Proton” and its engine and gear-box technologies from Mitsubishi. It renewed and strengthened the financial incentives to export-oriented firms and complemented these with specific stimuli for higher value-added activities,2 such as tax allow'ances on firms’ training and R&D expenditures (UNIDO, 2003).