Since its establishment in 1786, Penang has had to consistently reinvent itself. Originally conceived of as a port-of-call on India-China trading routes, Penang lost out to the better-located Singapore in the 1820s. Subsequently, it had to reinvent itself as a regional entrepôt, catering to southern Thailand, northern Sumatra, and Kedah in order to survive. Following the opening of the Suez Canal in 1869 and the age of steamships, Penang established itself as a conduit between the riches of Peninsular Malaya and the world (Chuleeporn, 2009: 105-06). European and Chinese businessmen linked the Settlement with tin mines and rubber plantations in Perak, southern Thailand, and beyond.

These periodic reinventions, along with Penang's historic openness to migration, led to an enviable cultural mix. At the apogee of the British period, the Settlement was a regional educational hub for Islamic, English, and Chinese education. Penang's polyglot society of diverse groups, cultures and ideologies proved potent enough to result in two secession movements in 1948 and 1953. Economics was no doubt a factor behind the challenges to Penang's incorporation in the emerging Federation of Malaya. The Penang Chamber of Commerce - the representative of European business interests - led the movement but secessionists also included the Penang Eurasian Association, the Chinese and Indian Chambers of Commerce and the Penang Clerical and Administrative Union (Mohd. Noordin Sopiee, 1973). However, the movement failed to gather momentum, or Penang's modern history may well have been different.

In the immediate post-independence era, Penang as a state within the Federation of Malaya (and Malaysia) saw its economic fortunes decline, especially after the Korean War, the withdrawal of its free port status, and increasing competition from other ports on the peninsula. However, in the 1970s, under the direction of Chief Minister Lim Chong Eu, the aging entrepôt transformed itself into an offshore manufacturing hub for the electronics industry and a well-known tourist site. This outwardlooking model of economic growth has underpinned Penang's economic development up until the present.