Professional Documents
Culture Documents
An Overview
1
LEARNING OUTCOMES
By the end of this topic, you should be able to:
1. Explain how entrepreneurship evolved and emerged as a leading
economic force in Malaysia since independence;
2. Identify the emerging industries available for Malaysian
entrepreneurs;
3. Discuss the emerging of entrepreneurship in the global scene; and
4 Analyse the importance of entrepreneurship in the context of
countrys development.
X INTRODUCTION
This topic introduces the evolution and development of entrepreneurship in the
Malaysian context specifically and the global arena generally. Here, students
would be able to learn about the underlying history contributing significantly to
the emergence of entrepreneurship. This topic will also explore the importance of
entrepreneurship as we examine the question on Why do we need
entrepreneurship?
2 X TOPIC 1 ENTREPRENEURSHIP: AN OVERVIEW
However, the growing discontent about economic inequalities sparked off racial
riot on 13 May 1969. The riot paved the way for the institution of the New
Economic Plan (NEP) in 1970. This plan focused on Bumiputera ownership and
partnership, improvement of Bumiputera participation in high income
occupation and subsequently, reducing the income gaps. Fundamentally, NEP
became the driving force towards the formation of the Bumiputera entrepreneur
community.
The NEP was eventually replaced with the New Development Policy (NDP). The
policy further strengthened the government endeavour in promoting
entrepreneurial development programmes. The establishment of the Bumiputera
Commercial and Industry Community (BCIC) and National Entrepreneurs
Corporation (NEC) facilitated the nurturing of Bumiputera entrepreneurs. Since
then, numerous new policies and support mechanisms have been developed for
Bumiputera entrepreneurs specifically and non-Bumiputera entrepreneurs
generally.
From 1971 to late 1990s, Malaysia has transformed from a producer of raw
materials into an emerging multi-sector economy, with strong reliance on
exports. However, the global economic downturn in 1997 strongly affected the
Malaysian economy. The Growth Domestic Products (GDP) increased by only 0.3
percent during the slump and 46,643 workers were retrenched from July 1997 to
June 1998. Understanding the predicament of high unemployment rate at that
time, the government arranged special assistance and support systems to
encourage entrepreneurship as an alternative source of income among the
retrenched workers.
To date, there are 12 ministries and 40 government agencies that shoulder the
responsibility of developing small and medium enterprises (Utusan Malaysia,
2007). These agencies provide support such as financial assistance, advice and
training programs to facilitate the development of SMEs. A total of 190
programmes are currently in place to support these development initiatives. For
instance, Development Financial Institutions (DFIs) were developed to provide
financing for strategic activities as stated above. In 2005 alone, a total of RM47.5
billion was allocated for financing purposes a 50 percent increase since 2000.
TOPIC 1 ENTREPRENEURSHIP: AN OVERVIEW W 5
Entrepreneurship in Malaysia has come a long way. There are a vast number of
industries that hold great potential as a fertile ground for new ventures. The next
section briefly lists potential industries in Malaysia that are favourable to new
start-ups.
6 X TOPIC 1 ENTREPRENEURSHIP: AN OVERVIEW
Table 1.2: The Major Industries based on the Ninth Malaysia Plan
Types of Industry Description
SELF-CHECK 1.1
SELF-CHECK 1.2
ACTIVITY 1.1
(a) Innovation
Entrepreneurs are known for their nature of challenging status quo and
seize opportunities that could have been overlooked by others. Their
distinctive ideas propel new start-ups to move forward and inject the
industry with creative and innovative ways of doing business. It can be in
the form of new products or services, improved business processes or
discovering new markets for existing products. The formation of new or
improved businesses increases the competitiveness of the nations
industries in the global world and adds a boost to the nations economy.
The report by New Straits Time December 24, 2008 indicated that, small
and medium enterprises (SMEs) contributed 32 percent of the Gross
Domestic Product (GDP).
(c) Globalisation
Globalisation has created an avenue for revenue generation in an economy
through export. Globalisation has also created more opportunities not only
to larger firms but also spill over effects to the downstream industries. This
TOPIC 1 ENTREPRENEURSHIP: AN OVERVIEW W 13
SELF-CHECK 1.3
One thing you need to bear in mind is that large organisations are no longer
providing the job security they used to. Therefore, you need to prepare yourself
to venture out into the labour force on your own and establish your future.
Learning the nuances of entrepreneurship and mastering those skills will
definitely come in handy when you intend to start your own venture.
Entrepreneurial ventures also allow you ample room to pursue your own ideas.
Independent in executing your creative ideas and reaping the benefit from it is
possible in your own entrepreneurial start-up. In a nutshell, you are your own
boss!
ACTIVITY 1.2
x Entrepreneurship in Malaysia has grown and will continue growing with the
financial and advisory support provided by the Government.
x Entrepreneurship was given a head start in Malaysia with the inception of the
New Economic Plan (NEP).
x Agriculture, manufacturing, services and information and communication
technology are the emerging industries that hold great potential for new
start-ups in Malaysia.
x Entrepreneurship is the driving force for economic performance through
innovation, job and wealth creation, and increased income through export
activities.
TOPIC 1 ENTREPRENEURSHIP: AN OVERVIEW W 15