Introduction to Entrepreneurship

Introduction to Entrepreneurship

• Entrepreneurship is crucial in countries with a free market economy, where entrepreneurial development is a key aspect of nation-building.
• Entrepreneurs are key players in providing products and services to consumers, identifying what is needed, wanted, or desired, and creating new products to meet those needs.
• Entrepreneurial activities are pillars of a nation's economic progress, growth, and prosperity.

Importance of Entrepreneurship

• A society with a great entrepreneurial culture will be more productive, competitive, and prosperous.
• Entrepreneurs improve product quality, reduce production costs, and find better ways to serve customers, thereby serving customers' needs more effectively.
• Entrepreneurs mobilize and allocate resources to where they are most needed, making them efficient resource allocators in a free market economy.

Definitions of Entrepreneurship and Entrepreneur

• Entrepreneurship is the activity of setting up a business or businesses, taking on financial risks in the hope of making a profit.
• The term "entrepreneur" was first used by Richard Cantillon in 1775 to mean "a person who undertakes to do a job".
• Different scholars have defined entrepreneurship and entrepreneurs in various ways, including:
  • Adam Smith (1776): a person who acts as an agent in transforming demand into supply.
  • Jean-Baptiste Say (1803): a person who shifts resources from an area of low productivity to high productivity.
  • John Stuart Mill (1848): a prime mover in private enterprise economic activities, where an entrepreneur is the fourth factor of production.
  • Carl Menger (1871): an economic agent who transforms resources into products and services and gives added value.
  • Ibnu Khaldun (Abdul Rahman Mohamed Khaldun): a knowledgeable and skilled individual craftsman who is instrumental in the development of a city state.
  • Joseph Schumpeter (early 1900s): an innovator who introduces new innovations to replace old products or old ways of doing things.

Entrepreneurial Process

• The Timmons Model of Entrepreneurial Process describes the four major necessary components in venture creation:
  • Founder
  • Opportunity
  • Team
  • Resources
• An entrepreneurial process involves seizing and acting on an opportunity, packaging a viable offering to customers, and using available resources to execute the project.

Characteristics and Attributes of Entrepreneurs

• Successful entrepreneurs have a strong reason or mission for becoming an entrepreneur.
• Common characteristics of entrepreneurs include:
  • Creativity, innovation, resourcefulness, and high-level initiative.
  • Willingness to work hard to achieve objectives with a high degree of commitment, determination, perseverance, and discipline.
  • Ability to take calculated risks, exhibit tolerance for ambiguity, and accept failure.
  • Possessing ability to think independently, high self-confidence, optimism, and belief in controlling one's own destiny.
  • Opportunity orientation towards future goals, aspiration, and vision.
  • Skilful organizer, ability to manage and solve problems, and communicative and persuasive ability to influence others.

Types of Entrepreneurship

• Broad categorization of types of entrepreneurship can be seen in different forms of organizations, such as small businesses, corporate entrepreneurship, and social entrepreneurship.

Summary

• Entrepreneurship involves seeking, identifying, evaluating entrepreneurial opportunities, working out a business plan, and executing the business plan with commitment, determination, and perseverance to achieve entrepreneurial objectives.
• Entrepreneurial activity is crucial in a nation's economic progress, providing products, services, and employment opportunities, and helping to raise the standard of living of the people of a country.

Entrepreneurship Development in Malaysia

• Malaysia achieved independence from the British in 1957 and made impressive progress in social and economic development, but benefits were not evenly distributed among ethnic groups.
• The Bumiputeras (indigenous people of Malaysia) were left behind in terms of economic fortunes and participation in commerce and industry compared to the Chinese and Indians.

Malaysian Progress after Independence

• The racial clash between Malays and Chinese in 1969 led to the introduction of the New Economic Policy (NEP) in 1971.
• The NEP aimed to eradicate poverty and racial economic imbalances through a two-pronged strategy: raising income levels and increasing employment opportunities, and restructuring Malaysian society to correct economic imbalances.

The New Economic Policy (NEP)

• The NEP introduced the Rukunegara principles, which called for a rejuvenated Malaysian society with a common value system that would transcend ethnic, cultural, and socio-economic differences.
• The NEP aimed to achieve national unity by eradicating poverty and restructuring society to correct economic imbalances.

The National Development Plan (NDP)

• The NDP was introduced in 1991, covering a ten-year period from 1991 to 2000.
• The NDP shifted the focus on poverty eradication strategy to addressing hard-core poverty, emphasizing employment opportunities, and rapid development of an active Bumiputera Commercial and Industrial Community (BCIC).

The National Vision Policy (NVP)

• The NVP was introduced in 2001, aiming to establish a progressive and prosperous Malaysian race where different ethnic groups live in harmony and engage in full and fair participation in the economy.
• The NVP introduced new policy directions, including developing Malaysia into a knowledge-based society, eliminating poverty, and achieving effective Bumiputera participation and equity ownership.

The New Economic Model (NEM)

• The NEM was formulated by the National Economic Advisory Council (NEAC) and aimed to make Malaysia a developed nation by 2020.
• The NEM's core principles are high income, inclusiveness, and sustainability, and its aims include creating a market-led, well-governed, regionally integrated, entrepreneurial, and innovative economy.

Entrepreneurship in Higher Education

• The Malaysian government recognizes the need to encourage an entrepreneurial culture and develop graduates who are entrepreneurial in their thinking.
• The Ministry of Higher Education has introduced initiatives to enhance entrepreneurship education and shift the mindset of Malaysia's younger generation from "Job Seekers" to "Job Creators".