DEVELOPING ENTREPRENEURIAL ENVIRONMENT

1. DEVELOPING ENTREPRENEURIAL ENVIRONMENT

2. SCOPE • The Context. • Current Policies and Practices • Typical Academic Entrepreneurship Activities • Issues and Challenges • World’s Best Practices • Suggestions • Q & A

3. THE CONTEXT • Only 1.3% - 1.6% of annually graduating students are entrepreneurs (2006-2010). • In 2010, student entrepreneurs were highest among certificate holders, followed by diploma, post-graduate and basic degrees. • In 2010, graduate entrepreneurs were mainly from UiTM, to a lesser extent UTM, UM and UPM. Other IPTAs almost insignificant. UiTM has been consistently high, and increasing.

4. THE CONTEXT (cont.) • About 3.5% of R&D are commercialized (10% in the world). • 90% of IPTAs’ OPEX financed by the Government (Thailand:55%; Singapore: 75%; Australia/NZ (45%); and UK (25%). And 100% of CAPEX. • Malaysia spends 6.9% of GDP on education, or 2.9% on higher education. The highest in the world.

5. THE CONTEXT (cont.) • Under 10th Malaysia Plan (2011-2015), 1% of GDP is to be allocated for R&D. (South Korea:3.4%; USA: 3%; Japan: 2.7%, Singapore 2.7%; Taiwan: 2.4%). • Labour market is a buyer’s market. Graduate unemployment a permanent feature ! • Democratization of higher education - without strict compliance to quality criteria – compromises the general quality of graduates. It makes them less employable.

6. CURRENT POLICIES & PRACTICES • Entrepreneurship subject is mandatory for all first year students in all IPTAs; • Up to 80% share of royalty on commercialisation of R&D goes to researchers. • Many IPTAs , especially RUs, have begun to intensify commersialisation / business activities, either on their own via incorporation of holding companies, and/or in collaboration with partner institutions.

7. CURRENT POLICIES & PRACTICES (cont.) • MOHE has, since 2010, formulated and implemented a “Policy on the Development of Entrepreneurship” in HEIs; • Industrial PhD Programmes offered by a number of RUs would further develop entrepreneurship in universities. • The government has decided to give greater autonomy to IPTAs, and full autonomy to qualified IPTA by 2015.

8. CURRENT POLICIES & PRACTICES (cont.) • Under the 10th Malaysia Plan (2011 – 2015)the government has doubled up allocation for R&D to 1% of GDP (9th Malaysia Plan only 0.4%); • Some entrepreneurship programmes at IPTAs could be considered as local best practices and probably, are replicable to other institutions.

9. TYPICAL ACADEMIC ENTREPRENEURSHIP ACTIVITIES • Large scale research projects • Contract research • Consulting • Patenting/licensing • Spin off firms • External teaching • Sales • Testing • Source: M. Klofsten and D.J – Evans (2000)

10. ISSUES AND CHALLENGES • Public HEIs, like other public agencies, are risk-averse; • Objectives of entrepreneurship agenda (EA) lack of understanding, hence lead to misperception and lack of support • Misconception: EA only for students; only about entrepreneurship education; only to produce graduate entrepreneurs; graduate entrepreneurs equal entrepreneurial graduates; • Resistance to change from HEIs’ community members

11. ISSUES AND CHALLENGES (cont.) • Lack concerted effort to drive EA; • Entrepreneurship are taught by lecturers who are not entrepreneurs • General mental mode that entrepreneurship as a profession lacks job security, involves huge risks,

12. WORLD’S BEST PRACTICES • In Babson College, 13-14% of students are involved in some kind of business activities while studying. And 28% of its alumni, have started their own businesses. 60% of its lecturers are entrepreneurs. • About 20-25% of the Harvard Business School graduates start their businesses upon graduation.

13. WORLD’S BEST PRACTICES • At MIT’s Sloan School of Management, faculty members are allowed to do outside work a day per week. They are also encouraged to establish starts-up, and take sabbatical leave or the maximum time allowable to run their businesses. • In Sweden (50%) and Ireland (63%), a high proportion of their faculty members have industrial experience prior to joining universities. Technical universities in Germany require at least 5 years industrial experience as prerequisite to possible appointment.

14. SUGGESTIONS • To undertake a baseline study to gauge and ascertain the extent, form and culture of entrepreneurship in IPTAs and other HEIs; • For visibility, relevancy, and role-model, to further encourage the engagement of qualified and successful entrepreneurs as visiting lecturers/professors; • To develop a systematic approach to identify yearly, newly enrolled students of their intended career choices particularly to becoming entrepreneurs as a vocation.

15. SUGGESTIONS (cont.) • To consider and allow lecturers to take one day off every week for entrepreneurship activities; • To enable lecturers to take an unpaid leave for a specified period to run his start-up business; • To create a conducive eco-system: conducive culture, enabling policies and leadership, availability of finance, venture-friendly markets, and institutional as well as infrastructure support).

16. SUGGESTIONS (cont.) • To make the subject on entrepreneurship mandatory for all MBA programmes in IPTAs. • To establish closer relationship with local entrepreneurs community and other supporting institutions. Make them friends of universities. • To refine and review the “Policy on Entrepreneurship Development in IPTAs”. • To elevate entrepreneurship in HEIs as a national agenda.

17. SUGGESTIONS (cont.) • To make entrepreneurship as KPIs of public HEIs. • To introduce a National Entrepreneurship Competition among HEIs.

18. Q & A