Entrepreneurship Education in Malaysia by tlu18752



                             CHENG Ming Yu
                              Cheryl CHAN
                      Multimedia University, Malaysia
               mycheng@mmu.edu.my; mychengmy@yahoo.com


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

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.

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

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? 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

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


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

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

                                           Teaching and Learning Methods

                                  Group projects                                                                               91.2

                                        Lectures                                                                        85.3

                                  Writing essays                                                       61.8

                                      Case study                                                55.9

                            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

                        70                                                                                                                   68.9
                                66.7                                                                                                                       66.7

                        60                       55.6


                    %   40




                             Gain Freedom

                                                           Family tradition

                                                                              Earn higher income

                                                                                                     Public reputation

                                                                                                                         Frustrated as


                                                                                                                                                        Gain power

                                                                                                                                                                     Prove own capacity


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.

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.


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