Policy Matters - Entrepreneurship – the game changer

WHEN Tan Sri Dr Mohd Irwan Serigar speaks, he simply rocks.

His presentation at the International Blue Ocean Symposium bristled with energy. He spoke about the Blue Ocean Strategy, but more convincing were his thoughts on entrepreneurship, efficiency and productivity.

Irwan is secretary-general of the Treasury, Ministry of Finance, a man who must exert enormous influence over the country's economic policies.

It is interesting that he should be interested in entrepreneurship and creativity. Then again, as an economist it probably comes naturally.

Here is a man who normally works at the macro level, going to the roots of the economy. Indeed, it is most apt because as most textbooks will tell you, the government is not in the business of producing.

It is companies that produce and it is they who are productive or not. Productivity goes back to the efficiency of a firm. For ease of speaking, we may refer to the productivity of a country.

Similarly, a country, as an entity, does not innovate. It is the companies that innovate.

Economists, mistakenly, attribute innovation to a country; they call it "total factor productivity". Innovation belongs to companies.

If one is talking about productivity, creativity and innovation, then one goes back to the company.

That is why, aside from being an enthusiastic speaker, Irwan has something pertinent to say: we must revisit the notion of entrepreneurship.

There are several levels at which entrepreneurship can work. These relate to the income level of the intended groups.

Entrepreneurship at the lower end of the economic scale encompasses micro finance. It runs up, at the next level, to encouraging small and medium enterprises.
Initiatives on entrepreneurship should also include encouraging venture capitalists and start-ups.

In the US, up to 50% of the start-ups are due to Indians, and a significant proportion comes from the Europeans. Nationality does not matter in stimulating entrepreneurship: the nation gains.

Moving down to Malaysia, several comments can be made.

First, directing policy attention to entrepreneurship can be an effective way of side-stepping problems such as one's initial level of endowments and that of ethnic origins. It can also avoid or minimise the role of the government.

Is the US model an appropriate one for Malaysia since they leave entrepreneurs to face the harshness of the environment without any mollycoddling from the government?

At the other end of the spectrum we would find entrepreneurship that is totally sponsored by the government. This would degenerate into another BR1M scheme.

In the Malaysian case, entrepreneurship creation should aim at weaning businesses to finding their own levels and feet.

This must be done across all sections. The spirit of entrepreneurship should be inculcated among single mothers and farmers; those in the middle 40, who need the extra income; and those who want to leverage on their technical expertise.

Without getting entangled in conceptual issues, there is no doubt that the government is on the right track when it comes to encouraging entrepreneurship.

It has launched a few projects to kick-start entrepreneurs, one of them being MaGIC, an initiative that is aimed at creating start-ups.

Aside from a few isolated attempts at creating entrepreneurs it would be worthwhile to know if there is a broader framework that will instil a sense of entrepreneurship among the wider population.

One wonders for how long the government will go on handing out support to sections of the population. It is about time that people are nurtured about their own sense of entrepreneurship.

This is where Tan Sri Dr Irwan, with his huge and exciting project on entrepreneurship, could possibly be a landscape transformer.

Dr Shankaran Nambiar is a senior research fellow at the Malaysian Institute of Economic Research. Comments: letters@thesundaily.com