While the first wave of Malayalees contributed primarily to the physical and commercial development of Penang, the second wave of Malayalees made their mark in the political and social spheres.

The Malayalees had been beneficiaries of the extensive higher education facilities that had developed in the princely states of Travancore and Cochin and they had thus emerged as the most literate linguistic group in India. It was when educated young Malayalees became aware of the job opportunities available in Malaya, that the second wave gained momentum in the 1920s.