MODULE 1

Topic 1:
Concept and Development Of
Entrepreneurship

HISTORY BACKGROUND
Second Malaysia Plan (1971-1975)

New Economic Policy

Eradicating poverty
Restructure the society

National Development Policy (1990-2000)

Vision 2020

1. History Background
The development of entrepreneurship began as early as the Malacca sultanate when locals
were doing trading with foreign traders.
British ruled Tanah Melayu and divided the people whereby Malays work as administrators
and farmers while the Chinese works in mines and doing trading and Indians were in
plantation sectors.
After independence, there were several policies being established which includes the Dasar
Ekonomi Baru (1971-1991), Dasar Pembangunan Negara (1990-2000) and Wawasan 2020. All
parties are giving their support to the development of entrepreneurship in Malaysia.
In 1995, Kementerian Pembangunan Usahawan were established as a body to control dan to
promote the development of entrepreneurship in Malaysia.
From 2005 to the present, Kementerian Pembangunan Keusahawanan was changed to
Kementerian Pembangunan Usahawan dan Koperasi.
Under the Malaysian Economic Planning Unit, 2001, Bumiputera Commercial and Industrial
Community (BCIC) was formed

 Importance of Entrepreneurship
Entrepreneurship is a drive for change and economic development. The
role of entrepreneurship in economic development not only increases the
rate of per capita output and income, it also involves changes to the
structure of business and society.
Entrepreneurship through creativity and innovation will be able to create
new products and provide services to meet human needs.
Entrepreneurs are individuals who not only create wealth but also
contributes to the distribution of wealth.

Definition of Entrepreneurs
Scarborough and Zimmerer (1988) defines an entrepreneur as those who create a
new business deal and face an uncertain situation for the sake of profit and growth
by identifying opportunities and providing resources to achieve it.

Kuratko and Hodgetts (2004), defines entrepreneur as "someone who is trying to

organize, manage and take risks in business.

According to Hisrich and Peter (1988), entrepreneurship is a dynamic process of

wealth creation. It is the process of creating something new by taking financial,
psychological and social risks to acquire profits and personal satisfaction.

TERMS OF ENTREPRENEURSHIP
"Entrepreneur" comes from the French Entreprendre 'which
could be interpreted as a willingness to take on tasks or trying
to undertake an enterprise
Joseph Schumpeter in the 'Theory of Economic Development'
(1934), depicting entrepreneurs as "Innovator" or people who
bring about change or reform
According to Schumpeter, entrepreneur as symbolized by the
person responsible for the production and the driver of
creativity (and 'a new and strange' (Novelty) in operating a
business

Schumpeters Theory
Pioneering work of economic development

Carrying out of new combination of

entrepreneurship is basically a creative activity
Entrepreneur is one who perceives the
opportunities to innovate
Emphasizes on innovation and excludes the risk
taking and organizing aspects

FACTORS OF DEVELOPING ENTREPRENEURS

David McClelland in the book "The Achieving
Society" introduces psychology motives which drive
strong that "need for achievement 'or a' desire for
achievement.
It reflects a desire to always do a better performance
than others in the same situation.

Psychological Theory

McClellands Theory

Hisrich & Peters (1998, p.20) outlines the three

skills required by entrepreneurs:
Personal entrepreneurial skills
Technical skills
Management skills

Technical Skills
(Knowledge/Expertise)

Personal Skills (Example)

Management Skills

MOTIVE AS ENTREPRENEUR
According to research there are two groups of
factors are evident:

Pull Factor

influences, which pull people towards

entrepreneurship

Push Factor

those influences, which push individuals toward

entrepreneurship.

 The same influence can become a push factor

for one individual but may be a pull factor for
another.
Unemployment is one example of that. Push
and Pull factors have an impact, for example,
on an individuals motivation.

CHARACTERISTICS OF ENTREPRENEURS BY ISLAMIC

PERSPECTIVE
Have the desire and enthusiasm high for successful
Right intention
- seek duly blessed by Allah SWT
- served for producing goods and services required
by community
- business as worship to Allah SWT.
Having adequate knowledge & skills in their areas of
expertise
Accountable to all stakeholders (customers, owners
of the organization, employees, families,
communities, governments, suppliers, distributors)

 Always frugal, efficient & effective in term of use of

resources (sustainability aspects of the business)
Have the skills to make decisions based on analysis
Think ahead (Al Hashr: 18)
Communication skills
Always maintain the quality of actions and results /
products
To refrain from illegal activities
Avoid the shackles of debt when starting and
developing business

 Always be cautious when evaluating the actions and

monitor environmental changes in demand, supply,
planning, competition, etc.(self-assessment &
vigilence in ever changing business environment)
Thankful with success (Ibrahim: 7)
Not extravagant and not niggardly to financial
balance and not go beyond the
requirements(financial prudence)
Always pay the debt accurately and quickly