RELATIONSHIP BETWEEN PSYCHOLOGICAL CHARACTERISTICS AND ENTREPRENEURIAL INCLINATION: A CASE STUDY OF STUDENTS AT UNIVERSITY TUN ABDUL RAZAK (UNITAR)

Journal of Asia Entrepreneurship and Sustainability, Sep 2007 by Yusof, Mohar, Sandhu, Manjit Singh, Jain, Kamal Kishore

Abstract: Interest in entrepreneurship is intense in many parts of the world. For developed economies, entrepreneurial activity (new venture formation) is a means of revitalizing economy, a way of coping with unemployment problems, a potential catalyst and incubator for technological progress, product and market innovation. For economies of developing countries, entrepreneurship is seen as an engine of economic progress, job creation and social adjustment. Thus, small business growth/new business formation is widely encouraged by national economic policies to stimulate economic growth and wealth creation. As Malaysia entered the twenty first century, interest and concerns on the subject of entrepreneurship heightened among others by the government's enormous funding allocation towards the promotion of entrepreneurship especially for small and medium enterprises, the issue of graduate unemployment which has risen to approximately sixty thousand (60,000) according to a Bernama report and the attitude of current graduates who are seen to be too pampered and dependent on the government and private organizations for employment. It is time to further examine whether our existing university students are inclined towards entrepreneurship. This study investigates the degree to which UNITAR students are inclined towards entrepreneurship. 361 students from three faculties at both graduate and undergraduate levels were surveyed to examine their entrepreneurial inclination and also to look into the relationship between certain psychological characteristics and entrepreneurial inclination. Further analysis is reported and recommendation for future research has been put forth in this paper.

Key words: Entrepreneurship, Entrepreneurial Inclination, Entrepreneurship Education

1. INTRODUCTION

Back ground to the research

Interest and research in entrepreneurship and entrepreneurship education have been growing over the past few years (Hatten and Ruhland, 1995; Green et al., 1996; Outcalt, 2000; Alstete, 2002; Morrison, 2000; Rohaizat and Fauziah, 2002; Klapper, 2004; Frank et al., 2005; Gurol and Atsan, 2006). One factor that has contributed to this is the importance of entrepreneurship in boosting economic growth and development. However, the Global Entrepreneurship Monitor (GEM) study (Minniti et al., 2005) reported that a strong variation existed across countries in terms of frequency and quality of entrepreneurial activity. Middle-income countries tend to exhibit higher percentages of individuals starting a business compared to higher-income countries. For example, some countries such as Venezuela (25%), Thailand (20.7%), and New Zealand (17.6%), exhibit very high rates of individuals participating in early-stage entrepreneurial activity. On the other side of the spectrum are countries with very low participation rates, such as Hungary (1.9%), Japan (2.2%) and Belgium (3.9%). Malaysia did not participate in this study.

In Malaysia, the government has created enormous amount of funding towards the promotion of entrepreneurship especially for small and medium-sized enterprises. However, the uptake is still slow. In fact, over the last few years, graduate unemployment has become a major problem. There were about 60,000 unemployed graduates in 2005 according to a Bernama report. In addition, current graduates are too pampered and dependent on the government and the private sector for employment. To resolve these issues, a reexamination of our higher education system is needed to find out the stumbling blocks that hinders the growth of entrepreneurship. Now is also the time to further examine whether our existing university students are inclined towards entrepreneurship.

There is not much research available in Malaysia in the area of entrepreneurship. This may be due to the fact that this field only began to be emphasized by the government in the mid 90s when a special ministry for entrepreneurs, the Ministry of Entrepreneur Development, was created in 1995. Most of the existing researches on entrepreneurship in Malaysia tend to focus more on the field of entrepreneurship in general; the success factors of actual entrepreneurs and to a certain extent characteristics of entrepreneurs (Nor, Ezlika and Ong, 2000; Nor Aishah and Yufiza, 2004; Ariff and Syarisa Yanti, 2002; Noor and Ali, 2004; Radzali, 1991). The empirical research on students' perception or inclination towards entrepreneurship is also limited and focuses more on factors influencing entrepreneurship inclination rather than examining other personal factors (Kamariah, Yaacob and Wan Jamaliah, 2004).

This paper intends to close the existing gap by examining the relationship between psychological characteristics and entrepreneurial inclination among students in University Tun Abdul Razak. This will help in developing a clear cut policy to promote entrepreneurship at the national level so that our future generations, in general, and new graduates, in particular, are able to move to a new level by becoming entrepreneurs. Specifically, this study will focus on the following research questions: