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Topic 1
What is Entrepreneurship ?
Learning Objectives
At the end of this chapter, students should be able to:
explain the concept of entrepreneurship
discuss the importance of entrepreneurship
discuss the characteristics of successful entrepreneurs
discuss the development of entrepreneurship in Malaysia
What do you understand by “entrepreneurship”?
The word entrepreneur is derived from the French word entreprendre, which means “to take risk”.
Entrepreneurship•An entrepreneur is a person who acts as agent in transforming demand into supply.
Adam Smith (1776)
•The entrepreneur acts as an economic agent who transforms resources into products and services. The entrepreneur transforms and gives added value.
Carl Menger (1871)
EntrepreneurshipThe practice of starting new organizations
particularly, and new businesses generally in response to identified opportunities. introduction of innovative, new, or unique
products or services. activities are substantially different
depending on the type of organization that is being started.
Innovative entrepreneurs ~ the bridge between entrepreneurship and economic growth.
EntrepreneurshipAccording to Schumpeter (1934),
entrepreneurs of new products and technologies make existing products and technologies obsolete. He named this activity as ‘creative destruction’.
Small firms that practice this are called ‘innovators’.
Entrepreneurial culture plays an important role in the development of the individual, community, company, and country.
Importance of Entrepreneurship
Entrepreneurship Culture
Community
CountryCompany
Individual
Malaysian Entrepreneurs….Tan Sri Mustapha Kamal – MK Land
Tan Sri Francis Teoh – YTL Corp.
Dato’ Sri Dr. Tony Fernandes – Air Asia
Trends in Entrepreneurship•Mark Zuckerberg•Saiful Nang
Young Entrepren
eurs
•Oprah Winfrey•Rozita Ibrahim
Women
Characteristics Of Successful Entrepreneurs
Initiative
Self Confidence
High Degree of Commitment
Persuasion
Use of InfluenceStrategy
Information Seeking
AssertivenessOpportunity Orientation
Persistence High Quality Of Work
Efficiency
SystematicPlanningProblem Solving
Common
Characteristics of
Successful
Entrepreneur
s
Passion for the
business
Product/ Customer
focus
Execution
intelligence
Tenacity despite failure
The Myths of EntrepreneurshipMyth 1 Entrepreneurs are doers, not
thinkers
Myth 2 Entrepreneurs are born, not made
Myth 3 Entrepreneurs are always inventors
Myth 4 Entrepreneurs are academic and social misfits
Myth 5 Entrepreneurs must fit the “Profile”
The Myths of EntrepreneurshipMyth 6 All entrepreneurs need is money
Myth 7 All entrepreneurs need is luck
Myth 8 Ignorance is bliss for entrepreneurs
Myth 9 Entrepreneurs seek success but experience high failure rates
Myth 10 Entrepreneurs are extreme risk taker (gamblers)
Businessman vs. EntrepreneurBusinessman Entrepreneur
Engages in activities for the purpose of profit to support for his living and his family
Starts the venture, assumes leadership and expands the venture to fill personal goals and attain self-accomplishment
Low risk taker Moderate risk takerFollow others and invests only in tested and proven markets.
Takes calculated risks.
Entrepreneurship Development in Malaysia
Entrepreneurship has existed in Malaysia (Malaya) since the interaction of Malacca with foreign traders.
However, when the British colonized the Malay Peninsular, they changed the structure of the society and practiced the “divide and rule” system; Malays (administration & agriculture), Chinese (mining & business) and Indians (rubber plantations).
As a result of this system, the Chinese society was far ahead in business compared to the Malays and Indians.
After independence, the Malaysian Government realised the importance of entrepreneurship to individuals, society and the country, and how it contributes to the nation’s prosperity.
Since then, the government has been focusing on the field of entrepreneurship until today. The New Economic Policy (1971-1990), National Development Policy (1990-2000) Vision 2020,
all encourage and support entrepreneurship development in Malaysia.
Entrepreneurship Development in Malaysia
Entrepreneurship Development in Malaysia
The government encourages entrepreneurship development and gives recognition to entrepreneurs because they can contribute to the development of the country.
In 1995, the government incorporated the Ministry of Entrepreneur Development as a specific body to manage and promote the growth of entrepreneurship in Malaysia.
SME Corporation Malaysia (SME Corp.) was set up in Oct 2009. It is the central point of reference for info and advisory services for all SMEs in Malaysia.
SME Corp. development programmes focusing on 3 main strategic thrust. They aim to: Strengthen the enabling infrastructure Build the capacity and capability of domestic
SMEs Enhance access to financing by SMEs
Entrepreneurship Development in Malaysia
Malaysian Technology Development Corporation (Life Sciences)Ministry/Agencies: MOSTI
PROSPER RuncitMinistry/Agencies: PUNB
PROSPER SiswazahMinistry/Agencies: PUNB
Business Effort Group Economic Fund (TEKUN)Ministry/Agencies: MOA
Funding for Early Stage Commercialization
through Venture Capital Fund
Entrepreneurship Development in Malaysia