The Essence of Entrepreneurship: Concepts and Development in Malaysia

1. Konsep & Pembangunan Keusahawanan

2. Topic outline • Kepentingan bidang pengajian keusahawanan • Konsep usahawan dan keusahawanan • Ciri dan sifat usahawan • Pembangunan keusahawanan di Malaysia

3. Defining entrepreneurship • Entrepreneurship as a term was first used during the Industrial Revolution. • It described the new phenomenon of the individual who formulated a venture idea, developed it, assembled resources and created a new business venture.

4. Defining entrepreneurship • The entrepreneur has thus emerged as a pivotal figure who operates within a market.

5. Towards a definition of entrepreneurship • Entrepreneurship:The process brought about by individuals of identifying new opportunities and converting them into marketable products or services.

6. The key elements of entrepreneurship • There are five generally agreed conditions that are necessary for entrepreneurship to occur: • an individual (the entrepreneur) • a market opportunity • adequate resources • a business organisation • a favourable environment

7. The key elements of entrepreneurship • The entrepreneur is responsible for bringing these contingency/possibility together to create new value

8. The key elements of entrepreneurship

9. The key elements of entrepreneurship • Entrepreneurial opportunities:Those situations in which new products, services and processes can be introduced and sold at greater than their cost of production.

10. The process of new venture creation • Not all individuals have the potential to launch a business venture ... • And of those of do, not all will attempt a founding ... • Of those who attempt, not all will succeed in founding ... • Finally, among the newly established business ventures, only a small proportion will survive

11. Model of new venture creation

12. Values, politics & economic institutions • Values:A readiness for change is essential if a society is to get richer. • Politics: Provide a framework for entrepreneurship. • Economic institutions: Institutions like property rights, stock exchanges and banks allow different types of economic enterprises to flourish.

13. Common features of entrepreneurship in the Pacific Rim region • Key role played by the state in the development of entrepreneurship • Presence of ethnic entrepreneurs such as ethnic Chinese and ethnic Indians

14. Sociocultural features of ethnic Chinese • The rules for vertical relationships are taught via Confucian concepts, often leadership with a paternalistic flavour is developed. • The rules for horizontal order have similar conditions, however, different types of relationships do apply. • Hardship of migration cultivated values for economic survival, such as pragmatism or work ethic.

15. Ethnic Indians • A vast majority adhere to some form of the caste system and Hindu mythology. • They are highly skilled and educated professionals and entrepreneurs due to an exceptional education system. • They created social and professional networks to mobilise information, skill, know-how and capital to start technology firms.

16. The role of the state Dual influence on entrepreneurship: • Strong promoter (e.g. SME Master Plan in Singapore) and entrepreneur itself (state entrepreneurship, deregulation) • Establishment of restrictive practices (ethnic and foreign entrepreneurs)

17. Emerging trends • Deregulation and privatisation • Adoption of Western ideas • Emergence of rule-based systems • Increased disclosure and employment of outsiders

18. Summary • Entrepreneurship is the process brought about by individuals of identifying new opportunities and converting them into marketable products or services. • There are many possible outcomes to the entrepreneurial process, e.g. independent start-ups, corporate ventures, franchises and business acquisitions.

19. Summary • At a macro-level, entrepreneurs create new business ventures, jobs and wealth, but they also force out of the marketplace the enterprises which failed to innovate.