New Economic Policy (NEP) as Entrepreneur Development model:

Challenges in Malay Entrepreneur Development

1.0 Introduction

Kuratko (2009), describes entrepreneur as an independent individual, intensely committed and

determined to persevere, who work very hard. They are confident, optimists and strive for
integrity. They burn with the competitive desire to excel and use failure as a learning tool.
An entrepreneur is a person who has possession of a new enterprise, venture or idea and assumes
significant accountability for the inherent risks and the outcome, Wikipedia (2009).

Business started from choosing the right name for the company and drawing up business plan,
accounting management, marketing, networking, sales, public relations, technology, financial
management, banking and insurance. Entrepreneur should look at the vital character traits that
they’ll need to survive in business. Determination and originality are keys. Equally, so is the
ability to organize their time and to put the requisite effort in during the early days.

As with any new commercial venture, success can never be guaranteed, but entrepreneur should
be able to minimize the trickier elements involved in setting up on new business. Most common
pitfalls in new start-up business are failure to research their market in sufficient detail and not
setting aside enough funds for tougher financial times. Entrepreneur should have ability to
recognize opportunity and exploitation of entrepreneur skills, competencies and knowledge; and
ability to obtain resources and co-ordinate scarce resources.

Entrepreneurial activities require the entrepreneurs to break away from their traditional and
establish routines and to overcome social resistance in order to do something new. Therefore, an
entrepreneur is a sociologically distinct individual who is a creative and resourceful innovator as
well as an agent of change.

2.0 New Economic Policy (NEP) As Entrepreneur Development Model

As Malaysian Economic Planning Unit (2009), Jabatan Perdana Menteri, prior to 1970,
Malaysia's development policy was primarily aimed at promoting growth with a strong emphasis
on the export market. Although the economy grew very rapidly during this period at an annual
average of 6.0 per cent, there was insufficient emphasis on distributional aspects, resulting in
socio-economic imbalances among the ethnic groups with negative social consequences in the
form of a racial riot in 1969.

The launching of the New Economic Policy (NEP) in 1971 was a watershed in the Malaysian
economic policy history. The NEP underscored the importance of achieving socio-economic
goals alongside pursuing economic growth objectives as a way of creating harmony and unity in
a nation with many ethnic and religious groups. The overriding goal was national unity. To
achieve this goal, two major strategies were adopted:

• To reduce absolute poverty irrespective of race through raising income levels and
increasing employment opportunities for all Malaysians; and
• To restructure society to correct economic imbalances so as to reduce and eventually
eliminate the identification of race with economic function.

An equally critical aspect of the NEP was that it was premised upon a rapidly growing economy.
Growth was a necessary condition so as to provide increased economic opportunities for the poor
and other disadvantaged groups to enable them to move out of poverty and to participate in the
mainstream economic activities. In addition, it ensured that distribution did not take place from
the reallocation of existing wealth but from expanding and new sources of wealth. The
implementation of the strategies to eradicate poverty and restructure the society resulted in a
significant improvement in income distribution by 1990. The proportion of households living
below the poverty line income declined from 49.3 per cent in 1970 to 16.5 per cent in 1990 and
reduced further to 5.1 per cent in 2002.

In terms of corporate equity restructuring, more than two thirds of corporate equity in Malaysia
was owned by foreigners in 1970, while the Bumiputeras, the indigenous people who made up
two thirds of the people, owned slightly over 2.0 per cent. The NEP set a restructuring target of
30 : 40 : 30, where by 1990, the holdings of the Bumiputeras should reach 30 per cent, other
Malaysians 40 per cent and the foreigners 30 per cent, in the context of an expanding economy.
In 1990, the Bumiputera share of equity amounted to 20.4 per cent of total corporate equity share
and the holdings of other Malaysians reached 46.8 per cent and 25.1 per cent for foreign
holdings. Although the Bumiputeras have not achieved the 30 percent equity ownership target by
1990, the progress made by them has been substantial compared to the position in 1970. By
2002, because the total value of corporate equity expanded rapidly, the holdings of all groups
increased further in value in absolute terms. Although, the share of foreign ownership fell to
almost to third, its value increased by over 30 times compared with the position in 1970.
Malaysia’s poverty eradication strategy has always focused on human resource development and
quality of life improvements. The relevant programmers’ emphasize more on income-generating
projects and not on welfare handouts, except in exceptional cases where direct assistance is
provided.

This is to ensure self-reliant among the poor to participate mainstream economic activities. Most
of the rural development strategies incorporate poverty eradication programmers’ such as new
land and in-situ development; provision of drainage and irrigation infrastructure; provision of
agriculture support services; encouraging the development of village/small industries; provision
of rural infrastructure including roads, electricity and water; and social services such as health,
schools, food supplementary and squatters resettlement.

EPU (2009), societal restructuring programmers’ generally focus on the following strategies:

• Direct intervention by Government through the creation of specialized agencies to

acquire economic interests and hold in-trust for Bumiputeras until such a time when they
are capable of taking over;
• Introduction of specially designed rules and arrangements, whereby the involvement and
participation of Bumiputeras are assisted and facilitated over a period;
• Provision of concessional fiscal and monetary support as part of the package towards
entrepreneurial development;
• Accelerated program for education and training;
• Increasing Bumiputera ownership through privatization projects; and
• Reduce progressively, through overall economic growth, the imbalances in employment
so that employment by sectors and occupational levels would reflect racial composition.

3.0 Development of a Bumiputera Commercial and Industrial Community (BCIC)

The development of a BCIC will continue to be the key thrust in the restructuring process as the
availability of a sufficient number of capable entrepreneurs and viable enterprises will ultimately
determine the success of Bumiputera in the commercial and industrial sectors, EPU (2009). In
view of the limited progress made during the OPPI, a more coordinated and well-defined
framework will be developed under the OPP2 for realizing this objective. In addition, the role of
PNB will be strengthened to enable it to effectively mobilize Bumiputera savings as well as play
a more active role in Bumiputera entrepreneurial development.

The process of creating the BCIC will take into account the need for Bumiputera to participate in
an environment of competition and efficiency. Thus, although Government policies and
programmes will continue to provide the necessary support to Bumiputera entrepreneurs, they
will be expected to develop their business activities increasingly on their own efforts and be less
dependent on Government subsidies and assistance. To this end, training in the area of
management of wealth and in business ethics will be given strong emphasis. Furthermore, the
role of public enterprises and trust agencies will be geared towards providing more effective
support for the development of Bumiputera businesses instead of competing with Bumiputera
enterprises. Bumiputera business managers, especially in the modern manufacturing and services
sectors, will be given opportunities to develop their talent as entrepreneurs in various sectors of
the economy. As a long term measure, a programme for the nurturing of young entrepreneurs
from the school system will also be given greater emphasis.

A wider Bumiputera participation in the modern sectors particularly in the manufacturing and
services, will be emphasized in view of the enhanced role and dynamism of these sectors in the
future. Particular attention will be given to their participation in small and medium-scale
industries through subcontracting and franchising which have been identified as potential
grounds for nurturing entrepreneurial development. In this regard, full and active jointventures
between Bumiputera and non-Bumiputera will be encouraged to enable Bumiputera enterprises
to increase their business prospects. In addition, greater efforts will be made to promote a higher
level of Bumiputera participation in construction, repair businesses, motor mechanics, petrol
service station and other such activities so as to provide more income earning opportunities for
them in the urban areas.
In order to promote potential Bumiputera businessmen and entrepreneurs, the system of quotas,
licences and preferences will continue to be necessary until such time that a sufficient pool of
Bumiputera entrepreneurs has been created. However, the implementation of this system will
ensure that only Bumiputera with potential, commitment and good track records will be accorded
access so that the objectives of creating a viable and resilient BCIC under the NDP are achieved.
In order to enlarge the number of successful Bumiputera entrepreneurs, the successful and those
with potential will be encouraged to be self-reliant and competitive in the economy. In addition,
to enable the Bumiputera to have greater accessibility into commercial and industrial ventures,
various support facilities such as finance, training and consultancy and advisory services will be
provided on an integrated basis. Easier access to credit facilities and business premises will be
extended especially to those who show the potential of being viable and innovative. Since the
Bumiputera may not have sufficient business background, experience and skills in management,
modern business, the resources of the PNB and other entrepreneurial development institutions
will be mobilized to assist potential Bumiputera to become more successful in their business
operations.

In order to enable the Bumiputera to compete effectively in the modern business environment,
their exposure to the latest technology, both indigenous and imported will be necessary. This will
be undertaken in line with the emphasis given to human resource development in the coming
years. Measures will also be undertaken to enable them to have greater accessibility to capital,
market information and linkages to international markets.

The agencies were given the responsibilities to spearhead the Malaysian government’s efforts in
creation of the entrepreneur skill were MeCD, MARA, PNS, SEDCs, and Credit Control
Corporation (CGC). These public enterprises played a crucial role in providing opportunities to
encourages Malay participation in entrepreneurial an industrial activities through the provision of
support facilities and special assistance programmes.

4.0 Entrepreneurship Development Program

Manimala (1992) urges entrepreneur should have ability to recognize opportunities through
cognitive process for the way of decision making and to maximize potential to growth.
Entrepreneur must have knowledge in entrepreneurial mind-set so that they will become
innovative in decision making. Potential entrepreneurs must always be alert to the opportunities
that lie in the external and internal environments which they live. This alertness will allow an
entrepreneur to create an idea from what others simply cannot recognize.

The Entrepreneurship Development Program consists of several learning modules. These

modules have information in regard to entrepreneurship, starting a business, and managing a
business to include:

• Entrepreneurship
• Writing a Business Plan
• Accounting
• Marketing & PR
• Networking
• Generating sales
• Technology Management

4.1 Developing Business Plan

The key skill in developing new business is planning. No matter how good or bad entrepreneur
are at forward planning, a solid business plan is arguably the most important business-related
document they will ever create. It’s highly recommended for new start-up business to create a
business plan.

Business plan important to the new start-up business if they going to need financial support from
a bank, a private investor or they need to attract a business partner, it’s an absolute essential.

Business plan need only be a few pages long, containing key information about the business.

List of contents of business plan:

1. Objectives: What do you want to achieve from your business? List key goals
including a financial overview

2. Executive review: An overview of what the business will do and how. Include the
legal structure, who will work in the business and what roles they will fulfill.
 Potential investors will use the information in this section to decide if the rest of the
plan is worth looking at

3. Market analysis: How many businesses already offer this product or service, and
where does your new venture sit in the marketplace?

4. Demand analysis: Who are your potential customers and how likely is it they will buy
from you? Are you at the premium end, the budget end or somewhere in-between?

5. Environmental analysis: What impact will your venture have on the environment, and
how can you minimize that?

6. Analysis of the competition: To launch a successful venture you need to offer

something different. So work out what’s already out there and identify the gap that’s
open to you.

7. Marketing strategy: Once you know the message you want to give out, show how you
will do that. Don’t get into too much detail but give an overview of strategy

8. Success factors: What things must happen to make the business a success? Listing
them in the business plan keeps them top of your awareness

9. Finances: List your likely costs and predicted revenue. This is normally done for three
years. Remember most people underestimate costs and overestimate revenue

10. Conclusion: Sum up your business plan in a few sentences

Business plan is living document. It’s should be review at least once a quarter.

4.2 Accounting Management for New business

When start up new business, one thing’s for sure – money isn’t going to be in abundance to
begin with. It goes without saying that it will go a lot further the more self-sufficient
entrepreneur are in the early days. But if there is one area where it’s worth shelling out for
professional help, it’s with accountant.
Entrepreneur should find a reliable accountant and they’ll have more valuable time to spend
doing what entrepreneur do best: building a business. If accounts generate on-going work, it’s
easy to get behind if they’re too tied up with the everyday running of their business.

A good accountant won’t just be there to fill out the corporate tax return and keep entrepreneur
legal. Accountant will advise how to keep as much of the wealth and generating as possible,
always be looking for ways how to save money. The best accountants save more than they cost.

In a best case scenario, entrepreneur should seek out a trusted accountant with a good reputation
before they start new company. They should be fully qualified, either as a certified or chartered
accountant – just look for ACA or ACCA after their names on correspondence or their firm’s
website. The more they can advise on all financial matters (including own personal tax affairs),
the more impact they will be able to make.

4.3 Marketing & Public Relation

In an ideal world, entrepreneur would spend at least one day a week actively marketing or
selling. Perhaps of that’s why this is one of the areas entrepreneur most likely to delegate to
someone else.

It’s not just about time management. There is an art to selling wares, marketing their company
and generally making sure only good things (and plenty of them) are said about it.

4.3.1 Marketing

Anything entrepreneurs do to positions their business to prospective buyers and helps to generate
sales leads is marketing. Even sponsoring a local Scout troop to do a litter pick is a form of
marketing, because it may one day influence someone to buy from your business.

The key to all marketing is to test and measure. Entrepreneur should consider trying every
marketing channel that they can think of, but only as a test and very carefully measured.

Different types of marketing work for different businesses. Entrepreneur should put some budget
aside and do some market research, and consider investing in a professional marketing tracking
system. As a general rule, at any one time if entrepreneur need to invest in new business, they
should use ten different types of marketing. Pick from: advertising, directories, online
advertising, website, networking, newsletters, emails, direct mail, telesales, corporate gifts,
blogs, audio CDs, DVDs, and affiliate marketing.

4.3.2 Public relations (PR)

One of the most popular types of marketing is public relations. It has become an essential in the
modern, media-centric society we live in, whether we’re an A-list celebrity, a sporting star, or
just a humble small business owner.

PR is the relationship between business with the general public, typically played out in the media
or on the internet. Like any long-standing relationship, it needs constant nurturing.

There are simple question about PR: “Is my product/service ready for public consumption?”
There’s no point in setting out to promote your product until you can answer a resounding “Yes”
to this question. If the demand is created and the product is not available, your strategy will fall
apart. And your customers may go and see your competitors in the meantime.

For any PR drive to be successful, entrepreneur must understand the motivations, desires and
needs of target audience. Consider things like which publications do they read, or what radio
station they listen to. And then think about what stories those media outlets will be most
interested in.

4.4 Networking

Having an idea or a dream but wonder how to get from where to start and where to go? As
entrepreneur they wonder "how have other people done it?" Networking is the best and most
cost-effective way to turn the ideas into reality. However, networking is an art. It can be done
badly or it can be done well. At its worst, networking involves standing around and making
awkward small talk. At its best it can be inspiring, fun and useful.

It’s important to remember that the main purpose of networking is to attract opportunities. Rather
than spending time, money and effort chasing opportunities, what entrepreneur need is to get into
the position where people offer the interesting opportunities. There are three ways to do this:

1) Raise the profile

2) Create goodwill
3) Keep in touch

There are all kinds of ways to raise profile - the simplest way is to go along to more events or
speak at events. Write articles or a regular column, or a blog. Get in touch with people you want
to get to know and ask if you can pick their brains about a particular topic over a coffee. Keep
doing these things and you will start to get known. The important thing in developing networking
is to raising profile needs to go hand in hand with creating goodwill.

To create goodwill, get into the habit of sharing useful information. Read an article that you've
enjoyed, and think about who else’s would find it interesting and send the link in an email - do it
straight away - it only takes 20 seconds. Keep your eyes open for gems, nuggets, intelligence and
share it with people you've met. Let people know about interesting events and invite them along
as your guest.

Be a connector. Entrepreneur must make introductions between people who they think would
benefit from knowing each other. Again - just a simple email to broker the introduction - then
leave them to it. Obviously make sure it's always a relevant article, invite or introduction. People
will really appreciate the thought you've put in and remember you for it. You will become known
as a helpful, generous, connected person who passes on useful information - people will always
be delighted to hear from you.

Generating goodwill also gives entrepreneur a great reason to keep in touch with people.
Sending people an email to say 'good to meet you, let's keep in touch' is a waste - it just clogs up
the in-box. However, an email with a useful article, contact or web. Link attached is a much
better way to maintain contact or re-establish contact with people. There are lots of quirky, light
touch ways to keep in touch too. The best way entrepreneur to keep in touch with lots of people
is to set up their own networking group. This can be a simple, informal get together in a bar or
cafe - invite a mixture of people that they have met so they can network with each other.
Alternatively, it could be a small peer group of four or five of your strongest contacts who meet
up regularly for coffee to support each other.

The key point to understand is that 80% of opportunities come from people we’re already
known. Entrepreneur should communicate in a simple way, distinct and easy to understand
because it will easier to the people to spread the idea.
4.5 Generating Sales

Once of the marketing efforts is generating sales. The first thing for the entrepreneur to
remember is that they’re not selling a product or service – They’re selling the benefits it brings to
the buyer. People buy for one of two reasons – either to feel good, or to fix a problem. The
majority of B2B purchases are for the latter.

Entrepreneur should prepare how to get out there and sell by writing a list of all the benefits that
they think their product or service will bring to the customers, for example saving time, money,
making them feel good, or providing them with a status symbol. Then, write another list full of
all the ways in which their product or service is better than their competitors (in the eyes of the
customer).

Entrepreneur as a manager should ask questions in a sales meeting and then listen to the answers.
Too many sales people think the gift of the gab is the way to go, but being a good listener will
secure you many more sales in the long run. Empathy is a great sales tool.

What matters to your potential customer? What keeps them awake at night? What do they wish
for?

5.0 Ministry of Entrepreneur and Cooperative Development (MeCD)

The history of the ministry of Entrepreneur and Cooperative Development of Malysia started
with establishment of the Ministry of Coordinating Public Corporation (KPPA) in 1974,
INSKEN (2008). The KPPA was re-established as the Ministry of Public Enterprise (KPA) in
1976 with responsibility of monitoring and coordinating public enterprise agencies such as
MARA, UDA and SEDCs. The urgency to speed up the formulation of BCIC has prompted the
government to replace KPA with the establishment of the Ministry of Entrepreneur Development
on 8th May 1995 which was subsequently known as the MeCD directive include MARA, SEDCs,
PNS, UDA Bhd, Co-operative Development of Malaysia (CDDM), Development Bank of
Malaysia (BPMB), Bank Kerjasama Rakyat Berhad (Bank Rakyat) and National Tekun
Foundation (YTN).
Since its establishment in 1995, MeCD has been entrusted with the responsibility of accelerating
the creation BCIC and to assist the government in achieving the target of 30% bumiputra equity
shareholding by the year 2020. In line with this, the objective of the ministry is to provide a
conducive environment for the development of genuine entrepreneurs and to inculculate the
culture of entrepreneurship.

6.0 Generating Malay Business Opportunities

Through MeCD (2007), to achieve the target of producing a critical mass of Malay
entrepreneurs, MeCd has implemented Business Development Program to open more
opportunities for them. Among the programmes that have been implemented are the franchise
and vendor development programme, the genuine joint venture programme and the mentor-
mentee programme. The ministry is also involved in the identification of new and strategic
opportunities for inspiring Malay entrepreneurs. For instance, they have been introduced to
opportunities in high technology fields such as information and communication technology,
biotechnology, pharmaceutical, automotive, modern agriculture and halal food. The government
believes that the Malay entrepreneurs should be involved in these strategic sectors which can
promise them high returns. This also as an effort to make the Malay entrepreneurs less dependent
on the construction sector where they are represented in large numbers despite the slow growth
of that sector.

On the other hand, in order to strengthen and to increase the competitiveness of existing Malay
entrepreneurs, the ministry has established strategic collaboration with successful Malay and
technical agencies such as SIRIM Bhd as well as multinational and government linked company
(GLC). Under the groom big programme selected Bumiputra enterprises would also be made to
undergo certain international standards of assessment such ad International Standard
Organization (ISO) certification, good agriculture practices, good manufacturing practices,
Hazard Analysis and Critical Control Point and Halal certification and to conduct their own
research and development (R & D) activities to ensure their continued competitiveness in the
local and in the international market, MeCD (2007).

6.1 Support Services and Assistance

Four main broad programmes implemented under the MeCD third strategic thrust of providing
support services and assistance are; advice and guidance services, business financing, promotion
and marketing and provision of business premises. The advice and guidances services are mainly
provided through the National Entrepreneur Guidance Centre, the State Guidance Entrepreneur
Centre and the District Entrepreneur Guidance Centre. These services are also provided through
other MeCD’s agencies such MARA and PNS.

6.1.1 Financial Support

As Malay lack financial resources, the MeCD provides various financing facilities such as the
basic capital scheme, the graduation entrepreneur fund, the small entrepreneur guarantee scheme,
the group economic cooperative fund and the MARA business financing to existing and aspiring
Malay entrepreneurs. In this regard, the ministry has restructured its many entrepreneurial funds
into three categories namely the Nurturing and establishment Fund (NEF), the care and education
fund (CEF) and the Development Fund, to increase the effectiveness of the fund management.
The ministry is directly responsible for overseeing the first two categories of the funds, the NEF
and the CEF. In 2006 alone, 19,379 applications worth RM397.44 million were approved out of
the 21,583 applications received by the ministry. The retailing anf wholesaling industry recorded
the highest number of borrowers with the funding valued at RM250.16 million, MeCD (2007).

6.1.2 Promotion and Marketing Programme

Under the promotion and marketing programme, the MeCD has made vigorous efforts in
promoting Bumiputra products locally and internationally. Among the regular activities carried
out by the ministry are the entrepreneur showcase, The Gerak Usahawan programme and the
Trade Exhibitions. The ministry also used printed and the electronic media to promote
Bumiputra products. For example, the ministry and its agencies were sponsoring half of the
advertisement cost of the small and medium Bumiputra companies in the TV programme called
the entrepreneur segment. This commercial advertisement was undertaken jointly by the ministry
with Syarikat Dapat Vista Sdn Bhd and Sistem Televisyen Malaysia Bhd (TV3), MeCD (2007).
The ministry also allocated a commercial space at its headquarters building in Putrajaya, for the
use of Bumiputra entrepreneurs to display and to promote their products. At the national level,
the ministry has organized various seminars, workshops and exploitations to promote interest
entrepreneurship among the bumiputras. A reality TV programme called ‘Kaliber:
Keusahawanan Kerjaya Pilihan’ was launched on 26 July 2006 as one of ministry efforts to
create an interest in entrepreneurship among youths.

6.2 Premises Assistance

As MeCD (2007), finally they recognizing the difficulty faced by the Malay entrepreneurs to
secure strategic business premises and location in major cities and urban areas due to their high
rental costs, MeCD has provided seven types of assistance under the business premises
programme. They are:

4.2.1 Provision of business premises

4.2.2 Provision of factory space

4.2.3 Purchasing of business lots at shopping complexes

4.2.4 Leasing of business space in shopping complexes

4.2.5 Developing incubator programme

4.2.6 Developing of industrial areas

4.2.7 Promotion of the new growth areas

The town development council (LKEB) was founded by the ministry based on the transformation
of UDA from a development agency to a private company which is solely profit oriented. In this
regard, the LKEB will take over the previous role of UDA to increase the participation of
Bumiputra entrepreneurs in urban business. The LKEB will also act as a catalyst to expedite the
achievement target of bumiputra asset holding of at least 30% by the year 2020.

MeCD and its relevant agencies have taken many efforts and initiatives to promote the
development of Malay entrepreneurship. Through its three strategic thrusts, the ministry has
implemented various programmes and activities to increase the number of Malay entrepreneurs
into various economic sectors of the country. The ministry has also made vigorous efforts in
supporting and strengthening existing Malay entrepreneurs for them to be more competitive
internationally and locally.

The MeCD and Ministry of Higher Education support the undergraduate entrepreneurial
activities by providing them with the necessary training, financial and infrastructural assistance.
For example INSKEN has developed 16 students mall, each with 10 shops lot for students to
operate their businesses, MeCD (2007).

7.0 Why Malay Entrepreneur Failed

Under NEP, the government had allocated numerous types of support facilities and special
assistance to create more Malay entrepreneurs. This provision of excessive assistance might have
led to the development of a ‘subsidy’ mentality for the Malays. In this respect, rather than
becoming independent, some have also claimed that the Malays are likely to keep demanding
more and more regardless of whether the government is able to meet their demands. They would
feel that it is within their right to be favored and any attempt to question or put an end to this
right, would very likely arouse anger within the Malay community.

The privileges enjoyed by the Malays under the NEP have also led to what some call the ‘Ali-
Baba’ practice. Being late starts in the world of modern business, the Malays lacked experiences
and business knowledge. This had encouraged some of them to go into business joint venture
with the Chinese. However, rather than being given an active role in running the business, the
Malays (Ali) would usually be treated as a passive partner by the Chinese (Baba). On many
occasion the Malays were taken as partners simply because they were Malays and were believed
to have greater access to government resources such as contracts and licences.
Misconception on destiny among Malays also has been discussed by Abdul Rahman (2002).
Malays people should revolutionize their mind-set in order to change their negative attitudes
towards life and work. In particular, the Malays were encouraged to work towards a better life
and to avail themselves of the many opportunities awaiting them. They were also encouraged to
understand that Islam does not condone passivity and are urged not to be complacent and not to
accept everything as fated. The Malays have also been encouraged to work hard and change their
perceptions that worldly things are bad. The call for Malays to change to their mindset and
negative attitudes continues. The government has introduced the concept of Islam Hadhari or
Civilization Islam as an effort to emphasize economic development among the Malays.

8.0 Development Business Knowledge and Business Strategy

As an entrepreneur, they should equip themselves with entrepreneurial knowledge and skill to
developed entrepreneur competencies. Malay entrepreneur must have ability to obtain resources
and coordinate resources and ready to break away traditional mind-set and overcome social
resistance. Effective new business generation requires effective management of technology.
Many of the world’s best technology-based firms have mastered the art of integrating technology
strategy and business strategy. As cited by Nickerson & Silverman (1998), in an example made
famous by C. K. Prahalad and Gary Hamel (1990), Canon has sustained enormous success for
nearly two decades by concentrating on deepening its optics technologies and identifying new
business opportunities in which to exploit these optics capabilities. Similarly, many leading firms
have devised ways to link their technology strategies with their business strategies by identifying
key technological capabilities and/or establishing linkages between technology and marketing
personnel. At the very least, firms have diversified into new business to which their existing
technological strengths appear to be applicable.

However, even many of the firms that have successfully linked business and technology strategy
fail to recognize the link between effective intellectual capital strategy and both business and
technology strategy, Nickerson & Silverman (1998). A comprehensive new business strategy is
composed of four interdependent decisions, each of which is fundamentally related to the nature
of these idiosyncratic assets. A firm with a new product idea must:
 1. Target a specific set of customers and identify product features that these customers value
(what Porter 1980 calls “choosing a ‘strategic position’”).

2. Identify other investments valued by its targeted customers that must be made to support
its strategic position.

3. Select and invest in a production technology to efficiently produce the requisite set of
product features given this strategic position.

4. Determine the optimal organization of the venture (e.g., what do we do in-house? What
do we contract out? How should we structure relationships with complementors? Which
IC management practices should we adopt?).

Nickerson & Silverman (1998) outline below a systematic model to integrate business strategy,
technology strategy and intellectual capital strategy to maximize a firm’s ability to successfully
identify superior business opportunities and organize to extract value from these opportunities.
This method is not a cheap fix – it requires dedication of significant effort and person-hours from
the multiple functions involved in developing a new technology-based business. However, when
put into practice this strategy integration approach can dramatically increase the likelihood of
successful new business generation. The following methodology can be used with any business,
be it technology-, service- or even resource-based. Nevertheless, in this paper we focus on its use
for technology-based businesses. The methodology is summarized in six steps:

1. Assemble a multi-disciplinary team including business, technology and legal personnel. The
appropriate team should include members from R&D, marketing, patent counsel and
possibly manufacturing, and should include the manager of the new business opportunity.

2. Identify and select a target market and position. This typically involves the creation of a
rough business plan detailing targeted customer segments, likely product features, perceived
value added and nature of competition.

3. Identify investments and technology. One way to do this is to start by identifying the value
chain of the major activities related to the new business opportunity. We then identify each
product or process technology that is relevant to each activity, as well as any transaction
 supporting investments required at each activity. We term the result a ‘technology value
chain’ or ‘technology tree’.

4. Identify unique or idiosyncratic technologies that form the basis of competitive advantage by
comparing the firm’s technology and intellectual position with that of potential competitors.
Note that this comparison is done with explicit reference to the proposed business plan, and
thus is anchored to bottom-line business strategy rather than to purely technological
dimensions.

5. Choose optimal organizational and IC management configuration based on the preceding

four steps. Lay out action plan for mutually reinforcing business technology and intellectual
capital strategies.

6. Evaluate expected profitability of this integrated strategy; repeat process from Step 2
onwards to compare this strategy to other potential integrated strategies.

9.0 Conclusion

Learning changes as a business changes. What worked in a small company is not the key to
success as the business grows. Entrepreneurs need to develop a learning mindset – working in
their business. To success in business not as easy as counting one to three or learning alphabet A,
B and C. Entrepreneurs should developed business knowledge from experience entrepreneur or
entrepreneur classes. The most important is dared to start the business. From this follows my
conclusion about the nature of the entrepreneur, as the agent ultimately responsible for changing
economic knowledge. In this capacity, the entrepreneur is both destructive, decorrelating existing
knowledge, and constructive, bringing new patterns of resource use into existence through the
market process and so correlating new knowledge. Knowledge of science and technology is
important for the modern entrepreneur but not in itself sufficient, it must be combined with
knowledge of market and organization, and it is this, which makes entrepreneurial insight so
valuable. The great insight of entrepreneurial competencies is contained in the entrepreneur
innovation followed market trends.
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