ENTREPRENEURSHIP EDUCATION IN MALAYSIA By CHENG Ming Yu and Cheryl CHAN Multimedia University, Malaysia firstname.lastname@example.org; email@example.com ABSTRACT The emergence of new business models as a result of the growth of the knowledge-based economy have brought to the rise of the entrepreneurship atmosphere among the younger generation, particularly the university graduates. For many years ago, it was strongly believed that entrepreneurs need no formal education. A successful entrepreneur is someone who works hard and has accumulated substantial experiences in relevant activity. The traditional entrepreneur usually starts from small business and small capital, involves in traditional business with low value-added and it takes him to struggle for many years to build up his career. Today, as evidenced by successful entrepreneurs at United States, especially from those in the Silicon Valley involving in high tech, high growth and high value-added activities, a new bleed of entrepreneurs with strong academic background, particularly those who know how to take advantage of Internet and other information communication technologies (ICTs) is required. Therefore, the growing concern is how should the education institutions, particularly the tertiary education institutions, impart essential entrepreneurial knowledge in the syllabus to equip future entrepreneurs with the necessary skills – the so called “entrepreneurship education”. This paper looks at the entrepreneurship education in Malaysia as the Malaysian government has taken great effort to transform the economy into the knowledge-based economy. In this regard, “entrepreneur” has been identified as one of the key elements to the development of the knowledge economy. Thus, this paper attempts to study the development of entrepreneurship education in Malaysia and to investigate the effectiveness of the entrepreneur education in Malaysia. To achieve the objectives of the study, primary data are collected. In order to examine the development of entrepreneurship education in Malaysia, interviews with students are conducted to collect students’ feedback on the effectiveness of the entrepreneurship teaching, to reveal their knowledge about entrepreneurship, their willingness to start up their own business, and factors influencing their decision to be entrepreneurs. INTRODUCTION Since the time of Plato, education is important for two basic purposes, i.e. to produce new knowledge and to transfer knowledge. However, in the new economy, which is also a knowledge-based economy, education institutions, particularly higher education institutions, are entrusted with a new additional task, which is to contribute to the development of entrepreneurial talent among young graduates. Nowadays, entrepreneurship education has been actively implemented in many countries, including Malaysia. Many universities and higher education institutions in Malaysia have recently introduced courses related to entrepreneurship or majors in entrepreneurship. For instance, in Multimedia University (MMU), a programme in Bachelor of Multimedia (Media Innovation & Entrepreneurship) has been introduced and entrepreneurship is a core course for the programme. In addition, the subject “Introduction to Cyberpreneurship”, has been made a compulsory subject for all students in Multimedia University, regardless of their majors. The purpose of introducing the cyberpreneurship subject are twofold, which are: 1) to develop students interest to become entrepreneurs, even if they are not students from business or management faculties; 2) to enhance students knowledge and understanding on the role of entrepreneurship in the new business world, especially the cyber world. In fact, besides MMU, entrepreneurship is offered in almost all universities in Malaysia. In Univerisiti Putra Malaysia (UPM), it is one of the subjects offered for Bachelor of Business Administration programme, in University of Malaya (UM), entrepreneurship is offered by the Department of Business Strategy and Policy, and in Universiti Kebangsaan Malaysia (UKM), Information Technology and Entrepreneurship is a compulsory subject in Bachelor of Science in Information Technology programme. At the MBA level, entrepreneurship is a core subject in most of the higher education institutions in Malaysia. The burgeoning of the entrepreneurship education since mid-1990s could be a result of the growing of the newly emerging knowledge-based economy. The new economy is experiencing a fundamental transformation. Rapid changes, globally inter-linked, death of distance, life long learning, constantly innovating, creativity, flexibility and responsiveness, small enterprises and co-opetition, are some of the prevailing characteristics of the current economy. The dynamism of the new economy creates enormous business opportunities that necessitate people to engage in innovative enterprising activity to grasp the opportunities at the right time and using the right way. Following the global transformation, Malaysia has made its effort to transform the economy from a production-based economy to the knowledge-based economy. In September 2002, the Institute of Strategic and International Studies (ISIS), Malaysia, released the Knowledge- based Economy Master Plan, which has identified seven critical areas and 136 recommendations to lead the economy in propelling toward the knowledge-based economy. Entrepreneurship is one of the key elements discussed in the Master Plan. It has been said that without entrepreneurs, there is no knowledge economy (V. Sivapalan, 2001). Realising the importance of entrepreneurs in the development of the knowledge-based economy in Malaysia, efforts have been taken to nurture entrepreneurship in all ways. Conferences, seminars, short courses and training on entrepreneurship are common activities organised by various organisations, along with the formal entrepreneurship education offered by higher education institutions. The related issues are: despite all the efforts taken, how many graduates are exposed to the entrepreneurship education? What does entrepreneurship education aim to achieve? How to teach entrepreneurship? What types of skill are needed to become a successful entrepreneur? How effective is the entrepreneurship education implemented in the nation? To attempt an answer to the above mentioned questions, this study has collected feedback from 90 randomly selected undergraduate and MBA students from public and private universities and colleges. Questionnaire consisted of three sections is designed to elicit students’ comment on the effectiveness of the entrepreneurship teaching, to reveal their knowledge about entrepreneurship, their willingness to start up their own business, and factors influencing their decision to be entrepreneurs. The information collected would serve as essential inputs for universities in Malaysia and in other countries to design a more effective teaching of entrepreneurship. WHAT IS ENTREPRENEURSHIP EDUCATION? What is entrepreneurship education? Before we are able to answer this question, we have to first of all look at the question on “who is an entrepreneur?” Different authors use different words to define entrepreneur. For instance, Hamilton and Harper (1994) define an entrepreneur as a person who bears certain risks in order to take advantage of an invention while for Thompson (1999); entrepreneur is someone who is able to “smell” a new opportunity and is willing and able to act on it. Joseph Schumpeter, in his famous book, Theory of Economic Development (1911), defined an entrepreneur as the person who destroys the existing economic order to create and benefiting from the new structure through a few channels, such as by introducing new product and service, or by creating new forms of organisation, or by exploiting new raw materials. In fact, there are many expressions used to describe an entrepreneur. However, all definitions are centring on the fact that an entrepreneur is someone who has unique instinct, plan, mind, inspiration, vision, strengths, and sensitivity and willing as well as able to conceptualise ideas and to see change as an opportunity. Based on the discussion presented above, it seems that basic personality dimensions, or in other words, personal traits, are essential factors in determining whether a person could become an entrepreneur. Therefore, a belief which is prevalent even in today’s society is that there is no way to teach or train someone to become an entrepreneur as entrepreneurs are born to be entrepreneurs. Is it true? Many people would agree that an entrepreneur is someone who is awarded with gifted quality, which depends on factors such as personal background and characteristics, life-path experiences and environmental influences, which are essentially not transferable from one to another. Hence, it is not possible to teach someone to become an entrepreneur. However, many studies that have been conducted recently have conversely showed that entrepreneurship education does play a significant role to cultivating entrepreneurship spirit among graduates. Based on a study done by Kolvereid and Moen (1997), it is shown that as compared to other students, those who have taken a major in entrepreneurship have revealed greater interest to become entrepreneurs and these students act more entrepreneurially than other students in taking up the challenge to start up a new business. Thus, it is suggested that although it may not be possible to develop entrepreneurship from education exclusively, to certain extent, education does have an effect to alter and contribute to the formation of entrepreneurship. In another study done earlier by Webb, et. al. (1982), it is shown that students who participated in entrepreneurship programme were more likely to start their own business than other students. Upton, et. al (1995) found that 40 percent of those who attended courses in entrepreneurship have started their own businesses. According to Ibrahim and Soufani (2002), school and education system play a critical role in identifying and shaping entrepreneurial traits. Other studies have pointed out that entrepreneurship education, especially education that provides technological training, is crucial to enhance entrepreneurs’ innovation skills in an increasingly challenging environment (Clarke, 1990; Menzies and Paradi, 1999). Previous studies have indicated that despite the fact that many believed that entrepreneurship is born, there are ways to train entrepreneurship. Thus, entrepreneurship education is essential in today’s society. However, there is no one definition available to explain what entrepreneurship education is. Entrepreneurship education has always been defined narrowly as education that provides the needed skills to setting up new businesses. However, Hytti and O’Gorman (2004) begged to be different as they argued that there are many ways to offer entrepreneurship education, depending on the objectives of such education. If the objective of the education is to increase the understanding of what entrepreneurship is about, the most effective way to operationalise the objective is to provide information through public channels such as media, seminars, or lectures. These methods are effective in terms of sending the relevant information to a broader population in a relative short time period. If the objective is to equip individuals with entrepreneurial skills which are applicable directly to work, the best way is to provide education and training that enable individuals to involve directly in the entrepreneurial process, such as industrial training. Lastly, if the objective of the education is to prepare individuals to act as entrepreneurs, the most effective technique is to facilitate experiments by trying entrepreneurship out in a controlled environment, for instance through business simulation or role playing. According to Kirby (2002), entrepreneurship education is different than “traditional” management studies as the traditional management education may impede the development of the necessary entrepreneurial quality and skills. Entrepreneurship education needs a different teaching pedagogy, hence, there are studies trying to relate entrepreneurship education to work related learning (Dwerryhouse, 2001); experiential learning (Kolb, 1984); action-learning (Smith, 2001), and entrepreneurial training (Gibb, 1999). Entrepreneurship education is more than business management, it is about “learning”, i.e. learning to integrate experience, skills and knowledge, to get prepare to start with a new venture. Hence, for the purpose of this study, entrepreneurship education refers to the formalised programme to equip students with the needed skills and knowledge to: • recognising business opportunities • searching customers insights • understanding the needs of the market • creating an idea • developing the business plan • running the business • evaluating environmental, institutional and political issues FINDINGS AND DISCUSSIONS Based on the data collected, this study attempts to provide information on the the level of entrepreneurial knowledge among students in Malaysia, effectiveness of the entrepreneurship teaching in Malaysia, and factors affecting their decision to become an entrepreneur. A total of 90 respondents are randomly selected from one private university, two public universities and two private colleges in Malaysia. 37.8% of the respondents are MBA students while others are undergraduate students. 46.7% of the respondents have experience of working full time as an employee while 11.2% have experience of running own business. Though the sample size is small, it is expected that this study would provide important pilot information on the issues mentioned above. Entrepreneurial Knowledge among Students Even though many universities and colleges in Malaysia have started to offer entrepreneurship as a major or a subject in most programmes since mid-1990s, both at the first degree as well as at the MBA level, only 37.8% of the respondents (12.2% are MBA students and 25.6% are undergraduate) said they have taken courses on entrepreneurship or related subjects and know what entrepreneurship is. The rest of the respondents (25.5% are MBA students and 36.7% are undergraduate) indicated they have not been exposed to knowledge on how to start their own business or how to manage the new venture. In addition, 44.4% of the total respondents believed that entrepreneurial talents are born, thus it is impossible to teach a person to become an entrepreneur through formal education. According to the respondents’ perception, 11.1% of them felt that education system in Malaysia places a great deal of emphasis on entrepreneurship while 72.3% of the respondents think that the emphasis on the teaching of how to start and running a business is still not enough and 16.7% said there is no emphasis at all on this particular issue. Among those who have gained substantial knowledge on entrepreneurship, 55.9% have obtained the knowledge from a module in a programme while 44.1% gained the knowledge from other sources, such as from work place or from real life examples (for instance, family members or friends who are entrepreneurs). The result indicated that despite the popularity of entrepreneurship education in Malaysia, there are still great deals of students who have not been exposed to the entrepreneurship education. The finding revealed that the level of entrepreneurial knowledge among students at higher education institutions is still low despite the relative high level of interest in entrepreneurship. Thus, there is a need to revise the curriculum at the higher education institutions and to examine method of teaching in order to disseminate the entrepreneurial knowledge and skills to more students at higher education institutions. Effectiveness of Entrepreneurship Education in Malaysia Among the respondents who have experienced entrepreneurship education at respective institutions, 11.8% of the respondents said the courses on entrepreneurship are excellent, 44.1% said very well and 44.1% said fair. The major comments include: lecturers are not equipped with the skills to teach the subject, teaching method not appropriate and the concept of entrepreneurship has been explained in a too abstract manner which is difficult to understand, only entrepreneurship theory is taught, but no practical implications discussed in lectures. As shown in Figure 1, the respondents have revealed that the most popular way of teaching entrepreneurship is by giving group projects to discuss topics related to entrepreneurship (91.2%). It is followed by lectures (85.3%), short essays (61.8%) and case study (55.9%). The least popular method is arranging face to face interview with successful entrepreneurs (5.9%). Teaching and Learning Methods Group projects 91.2 Lectures 85.3 Writing essays 61.8 Case study 55.9 Methods Writing business plan 41.2 Role playing 32.4 Business simulation 14.7 Video 11.8 Interaction w ith entrepreneurs 5.9 0 10 20 30 40 50 60 70 80 90 100 % Figure 1: Teaching and Learning Method Which teaching and learning method is the most effective way to teach entrepreneurship? As discussed by Hytti and O’Gorman (2004), different approaches are required to operationlise different educational objectives. Thus, there is a need for higher education institutions in Malaysia to examine the objectives of offering the entrepreneurship education. Without knowing what the entrepreneurship education aims to achieve, it is difficult to judge whether the methods of teaching and learning is effective. Factors Determining the Entrepreneurship Decision In the survey, respondents were also asked to reveal the most important reason for them to consider starting a new business. More than 50% of the respondents said higher earning potential is the main factor that will drive them to start their own business while 11.1% wanted to have more freedom and 18.9% said only when they saw a market opportunity, then they will consider starting their own business. Figure 2 illustrates the main reasons for respondents to involve in setting up own business. Motives of Setting Up Own Business 80 80 73.3 70 68.9 66.7 66.7 60 55.6 50 43.3 % 40 34.4 30 20 20 10 0 Gain Freedom Family tradition Earn higher income Public reputation Frustrated as independence Satisfaction Gain power Prove own capacity employee Economic Motives Figure 2: Motive of Setting Up Own Business In terms of major barrier or obstacle, lack of funding is ranked at the top of the list as the most significant perceived obstacle to start a business (38.9%), followed by lack of training (21.1%) and lack of knowledge on how to start a new business (13.3%). Based on the feedback provided by respondents regarding the ideal entrepreneurs’ characteristics, 75.6% of them felt that an entrepreneurs should be someone who is visionary and creative, 57.8% said entrepreneurs should know how to work in a team, 74.4% revealed that they should possess organisation skills, other qualities include committed (63.3%); strong networking (51.1%); risk-taker (75.6%), inspirational (42.2%) and optimistic (58.9%). When asked about their readiness to become an entrepreneur, 15.6% of the respondents said they have absolutely no intention to start up own business; 10% said they are already running a business; 11.1% are considering starting up own business now; 4.4% already in the process of preparing the start-up; 8.9% hope that they would be able to create new venture upon completion of study and 33.3% said within 5 years after graduation, they would consider to involve in their own business while 16.7% said within 10 years period, they might start up their new business. CONCLUSION The study provides critical preliminary information on entrepreneurship education in Malaysia, in terms of the level of understanding and effectiveness of entrepreneurship education in Malaysia to nurture the necessary entrepreneurship spirit among younger generation in order to achieve the nation’s interest in developing a successful knowledge-based economy. The findings indicated that the level of understanding on “what is entrepreneurship” is still low among the respondents selected in this study. There is a need to identify the objectives of entrepreneurship education to determine the most effective teaching method. The study also showed that there is a low level interest among students to become entrepreneurs immediately after graduation. Rather, respondents chose to work for few years before venturing into own business. REFERENCES Clarke, T. E. (1990) “Review of the Status and Availability in Canadian Colleges and Universities of Courses or Programs Dealing with the Commercialization and Adoption of Science and Technology”, report for Industry, Science and Technology Canada, Ottawa Dwerryhouse, R. (2001) “Real Work in the 16 – 19 Curriculum: AVCE Business and Young Enterprise”, Education and Training, Vol 43 (3): pp. 153-61 Gibb, A. 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An Examination of Career Activity of Entrepreneurship Major, Since 1984”, Frontiers of Entrepreneurship Research. V. Sivapalan (2001) “New Economy: Move to K-Economy”, New Straits Times, 26 April, 2001 Webb, T. Quince, T. and Wathers, D. (1982) Small Business Research, the Development of Entrepreneurs, Gower, Aldershot.
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