Friday 29 Mar 2024
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This article first appeared in Enterprise, The Edge Malaysia Weekly on July 8, 2019 - July 14, 2019

Entrepreneurs should continue coming up with ideas and launching businesses despite the dismal economic conditions, says StartupMalaysia founder Dash Dhakshinamoorthy.

This is also the best period for young people to consider an entrepreneurial vocation as the resources for learning something new and launching a venture are many, he adds. “Getting your idea funded may be difficult, but entrepreneurs with ideas to solve real-world problems will always find enough backers, funders and mentors to get them going.”

It is only the innovative ones who solve real problems that will succeed while those who go into business for the glamour of it are likely to crash and burn, says Dash. Quoting Harvard Business School academic and venture capitalist Dr Tarun Khanna, he says that unlike entrepreneurs in developed countries, who only need to find large enough problems to solve, those in developing countries such as Malaysia have to be cognisant of the conditions that will enable them to launch companies.

“In Europe and the US, you have to identify a problem and solve it to become an entrepreneur. In developing markets such as ours, the entrepreneur also needs to have the right conditions to create,” says Dash.

The establishment of the Ministry of Entrepreneur Development (MED) gives entrepreneurs something to look forward to as there are many policies and initiatives in the pipeline that may aid them in their journey. Dash thinks the MED’s consolidation of funding and training programmes is a step in the right direction as it gives would-be entrepreneurs a one-stop centre to get all the necessary support.

“The MED is helping to close gaps and hopefully, it will be able to create the conditions that enable creation, which I think is very encouraging,” he says.

International Centre for Transformational Entrepreneurship (ICTE) director Professor Gideon Maas says entrepreneurship should go beyond the local mindset, meaning entrepreneurs should adopt a global perspective and connect with the outside world. “The challenge is to think outside of your existing environment and be familiar with that as well as understand the different cultures and different ways of doing things.”

Maas observes that Malaysian entrepreneurs have a problem communicating their ideas. “It is easier to send a text or an email. But what we want to see is them talking to each other. Entrepreneurs need to be passionate and tell people the value of what they are offering,” he says.

What are the institutional gaps that currently exist in Malaysia? Dash says that while there are a lot of funding programmes provided by the government, not many entrepreneurs know how to access them. As for training and support, the whole education system needs to be overhauled, he adds.

“Universities may need to be more porous so there is more private sector involvement in education on entrepreneurship. It is easier to teach an entrepreneur to teach than to teach a teacher to be an entrepreneur — so one can be an entrepreneur and a professor as well,” says Dash.

Another gap is the lack of access to information for entrepreneurs in rural areas because they do not know where the opportunities are and how to get them. Questions like “If I am an entrepreneur in a rural area, how do I get my ideas moving?” and “If I have ideas, is someone going to fund them?” need to be answered, says Dash.

“These are the things we call institutional gaps because they do not have access to information, opportunities and so on. We need to close those gaps,” he adds.

 

Changing the entrepreneurial mindset

The corporate world is shrinking because it needs entrepreneurial-minded people to act and think fast. Maas points out that in the modern world, entrepreneurship is not just for those who want to own businesses but also for corporates, governments and even sportspeople.

The Malaysian entrepreneurial environment is going through a process of digitalisation and with the opportunities it unlocks, people will need to think faster about what can work, he says. “We try to teach people value creation and not just venture creation. Venture creation is creating a business while value creation is the values you put across.

“Employability is nicely linked to the entrepreneurial side as well. I have told people that if they have entrepreneurial skills, they have a plan B. So, if plan A is not working, they can choose to start their own business.”

Malaysian entrepreneurs tend to have a short-term orientation, where they create a business today but want to be millionaires tomorrow. Maas says they seem to be impatient and fail to understand that entrepreneurship is not a sprint, but a marathon.

“When it is short term, you miss the complexity. In other words, you will do the easy stuff first. In this type of environment, we want to nudge people to be more futuristic, to venture into the unknown and think about the future, to be less hasty and more sustainable,” he adds.

So, where does the country stand? Maas says it is somewhere in the middle — neither far behind nor far ahead. However, he believes that Malaysia is ideally positioned, especially with the establishment of the MED, because that means it has an entrepreneurial strategy for the country.

“When the economy is good, entrepreneurship comes under pressure. When it is bad, entrepreneurship grows again. You get this see-saw effect from time to time but over time, it is always about producing impact and that is how you measure it,” says Maas.

 

The pillars of entrepreneurship

Coventry University’s ICTE team was in Kuala Lumpur to meet and engage with local stakeholders to discuss the challenges, opportunities and future of transformational entrepreneurship in Malaysia. It had launched the Southeast Asia Institute for Transformational Entrepreneurship, a virtual organisation, with the support of Tunku Abdul Rahman University College in 2017 and its return visit included meeting with the MED and connecting with local entrepreneurs.

After one of their roundtable discussions, they came up with eight pillars that entrepreneurs, stakeholders and the ministry was going to focus on: employability, addressing gaps in the entrepreneurial ecosystem, sharing of good case studies, enterprise and entrepreneurship education, getting corporates involved, internships, entrepreneurial awareness in the community and ways to influence others.

Maas says the current focus is on four of the eight pillars, the first being education — not just for students but also staff members. “You need both. It is not just about lecturing staff, it is professionals and administrative staff as well because everyone needs to understand entrepreneurship.”

Next is the focus on deeper entrepreneurial research on selected topics in the country. “For example, if a burning issue is social entrepreneurship, then we want to have more doctorate students doing research on that. But not research for the sake of research. It is research with the purpose of addressing social entrepreneurship and dealing with the group,” says Maas.

The entrepreneurial ecosystem is another important aspect as it encompasses a lot of different elements, he adds. He points out that it should be evaluated to discover gaps. The role of universities is critical to promote the entrepreneurial ecosystem and should be evaluated in the context of whether they are “entrepreneurial universities”.

“It is not about making money. Being entrepreneurial means being innovative, driven, modern, having an integration of disciplines and so on,” says Maas.

He adds that they need to tie in these three aspects to influence policy formulation so they can identify what works and what needs to be enhanced. “A famous aspect is financing and if you splash money on everything, you are not creating entrepreneurial orientation because subsidies and grants become dominant. We need to make sure that financial support stimulates the right things.”

Maas notes that the nature of crowdfunding is changing because it was initially of a lower-value orientation and now it is starting to move up and become more important. “The financial instruments are changing and research is being done on how crowdfunding can scale up and become more community inclusive.

“Too often we just go back to traditional financial institutions. But now, things are different. We would love to see how Malaysia’s entrepreneurship strategy evolves over time and conversations and formulations that really link up.”

For employability, two issues are critical — providing the right skillsets and knowledge and measuring it, says Maas. “First, it needs to be determined whether the right skills are being provided and also whether employability is measured, especially at university level. Second, how measures can be improved over time should be investigated.”

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