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Was Forest City the first step towards Balaji Srinivasan’s vision of a “network state” or a reality check on how difficult it is to build one?
When Srinivasan selected Forest City in Johor as the home for Network School, the decision appeared closely aligned with the philosophy outlined in his book
The Network State, which explores how digitally connected communities could eventually establish physical networks built around shared values, talent and economic activity.
Network School was an attempt to put that concept into practice.
Rather than a conventional educational institution, it functioned as a technology-focused residential community where startup founders, software engineers, investors and creators could live, work and collaborate.
The aim was to create an environment where innovators could build companies, exchange ideas and form a global technology network.
Why Forest City?
Forest City offered several features that made it attractive for such an experiment.
The development had large-scale infrastructure, international ambitions and a strategic location near Singapore, one of Asia’s leading technology and financial centres.
For a community seeking to attract global talent, Johor offered access to a regional economic hub while providing a lower-cost alternative to Singapore.
There was also symbolic significance.
Forest City was originally envisioned as a futuristic international development. Although it struggled to achieve the population growth initially expected, its existing infrastructure provided a setting for another ambitious idea: whether a new type of global technology community could emerge from a purpose-built environment.
When the network state meets the nation state
However, Network School also exposed the central challenge of Srinivasan’s vision.
A community may begin online, but once it establishes a physical presence, it must operate within the laws and institutions of the country where it is located.
Issues involving business licensing, immigration, land use, security and regulatory compliance become unavoidable.
The Johor experience highlighted the tension between a borderless digital community and the realities of national sovereignty.
The Malaysian authorities’ decision to halt Network School’s operations followed enforcement action by the Iskandar Puteri City Council over alleged regulatory breaches involving licensing and the use of premises.
The bigger question
Beyond the immediate controversy, the episode raises a broader question: can technology-driven communities create lasting physical ecosystems within existing nation states?
Building such communities requires more than attracting participants. Successful innovation hubs depend on a wider ecosystem of talent, investment, research institutions, local partnerships and integration with the surrounding society.
A compelling idea alone is not enough to create a sustainable community.
A lesson for the future
The Johor experiment does not necessarily represent the failure of the network state concept. Instead, it highlights the difficulty of turning an ambitious vision into a functioning reality.
Future communities built around technology, entrepreneurship and shared interests will still need to work with governments, comply with regulations and build trust with local communities.
For Srinivasan, Forest City was one of the most visible attempts to test whether a network community could evolve into a new social and economic model.
For Malaysia, the episode is a reminder that attracting disruptive innovation requires not only openness to new ideas, but also regulatory clarity, local engagement and respect for national institutions.
Johor was not a “network state”. But it was a rare real-world test of whether a vision born in the digital world could survive in the physical one.
The experiment showed that creating a new form of community is not only a technological challenge - it is also a legal, political and social one.
