Topic 1 notes

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