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Case study on Malaysia, with a particular focus on Entrepreneurial Mindset

ZSIGMOND, Száva Assistant Lecturer, Team Coach

Budapest Business School – University of Applied Sciences (Hungary) Faculty of Finance and Accountancy

Department of Entrepreneurship and Human Resources Introduction According to the 18th consecutive Global Entrepreneurship Monitor (GEM) 2016 – which is tracking rates of entrepreneurship across multiple phases of entrepreneurial activities, which analyzes assessed characteristics, motivation of entrepreneurs, as well as explores attitudes of the representatives of the society toward entrepreneurship – Malaysia is accomplishing well. However, examined factors are contradictory: on the one hand certain factors, like being in the top-three in the world, together with Indonesia and Brazil, Malaysia reports higher entrepreneurial female activity rates than men; where entrepreneurs are efficiency-driven; in which country eight examined factors from the twelve according to the GEM survey (HERRINGTON-KEW 2017 p12) is in the top twenty worldwide and where a nationwide, Blue Ocean Strategy is built into the development policy of the country; all playing an important factor in boosting entrepreneurship and predestinate extraordinary measures. On the other hand, contrary, less than half of the working-age adults find entrepreneurship as a sufficient career option, because less than a quarter of adults believe to possess capabilities to being entrepreneur; where, comparing with other factors facilitate growth in entrepreneurship is well-developed, where there is an inadequacy in physical, but also commercial-, and legal infrastructure, but also in government polices, like taxation and bureaucracy, also some inauspicious impacts can be traced. In spite or despite of all the above mention facts, Malaysia is well-know worldwide about its vivid entrepreneurial life and ecosystem, which could be even a role-model for other, starving for development countries. The aim of the following study is duplex: on the one hand it postulates to get to know European(s) (students) with Malaysian macro-, and micro-environmental facts, lifestyle, cultural aspects and business issues, but on the other hand it aims to introduce the basics and core elements of the entrepreneurial ecosystem, its performers, relations and developmental possibilities. The selected research strategy is a qualitative case study, combined with nine in-deeps interviews with different actors – like educators, mentors, program leaders, local and expatriate entrepreneurs – of the Malaysian entrepreneurial life. According to the point of author’s view, case study is a joint method to introduce this particular case, as it involves both longitudinal- and depth examination, by using it, a more complete picture of the topic could be gained, while it also adumbrates why things are happening the way, they are, but also draws up possible further research topic(s). According to Yin (2014) case studies have five distinguish marks, like it examines unique or complex cases in their own context (1), it involves the urge to draw-up casual relationships (2) and also for theorizing (3), but it helps in generalization (4) and also to discover the contiguity in converging data series (5), which facts underpin the insertion of methodology and the case. The study itself leans on the one hand on secondary research – mostly in cases of statistical

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data –, but on the other hand on the spacious, diversified, field gained experiences of the study’s author. The nine, in-depth interviews were taken in May 2017, in six cases face-to-face, in three cases via Skype, video call or written form. The interviews were semi structured. Questions were divided into five blocks – see Appendix 1 – named as general view of entrepreneurship in Malaysia (1), the performers of the entrepreneurial ecosystem (2), with a particular focus on the developmental possibilities (3) and entrepreneurial mentoring (4), as well as concentrating the role of accelerators and barriers appearing in the ecosystem (5). The author built in to the study her experiences from two workshops – named ‘Magical Conversations: Coffee and Conversation with women entrepreneurs’ and ‘Experience Coaching! – How to identify coaching and how it differentiates it from mentoring; Coaching for Entrepreneurial Development’ at International Coaching Week in Malaysia – and a conference, ‘Malaysian Entrepreneur Convention 2017’, which is the well-known and biggest annual conference in Malaysia for entrepreneurs, as well as unofficial, friendly conversation with both inhabitant and expatriate citizens of Kuala Lumpur and Petaling Jaya. During most of the the interviews and at the entrepreneurial activities, the author prepared written notes on spot, from the other part of the conversation a follow-up report or memorandum was written. These documents were analyzed partly with mind-mapping methodology. The research also has some limitations: the author was not able to contact all kind of performers of the Malaysian entrepreneurial ecosystem – at the most important accelerator it was impossible to have a personal appointment or video call –, the respondents were either not competent in all of the questions (one of them was even totally malignant during the first half of the interview), or the available the time for the interview was short or insufficient; also the four weeks of the author’s scholarship – in which three long weekends with 3 or 4 days of holiday – proved rather short and tough, which made difficult the complete the research. Here should be also mentioned, that the period of data collections was covering strait the last four weeks before Ramadan, which was on the one hand advantageous, as entrepreneurial life was rather vivid and vibrant, but on the other hand, it was unfortunate, as most of the performers were rather busy and occupied. This study could be divided into two parts: in the first chapter, the author will introduce the macro environment, the business life and lifestyle of Malaysians with the help of the framework of STEEP analysis (1) involving own experiences and assumptions, while later, in the second part, the entrepreneurial ecosystem will be described briefly, in a way, what the four-week long field experience allowed, focusing on entrepreneurial mindset (2). Last, but not least, it should be underline, that this study itself could be created only with the help and procurement of The Oriental Business and Innovation Center (OBIC), which was established by Budapest Business School, University of Applied Sciences and the Hungarian Central Bank in 2016, with the goal to improve and develop the competitiveness of the Hungarian economy by contributing to a better understanding of South-East Asian region. As the OBIC offers both inbound and outbound research mobility grants, the author of this article spent four weeks with a scholarship in Kuala Lumpur, in the capital of Malaysia, where she gathered consequential data to contribute the study.

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1. Introduction of Malaysia Malaysia, as the third largest economy in South-East Asia, is successfully moving towards achieving its goal, becoming an advanced nation by 2020. To achieve this goal, the government has adopted the Malaysia’s National Blue Ocean Strategy (called later as NBOS) in its strategical planning and operations to deliver programs and services to the public, that are with high impact, low cost and are rapidly executed. (www.blueoceanstrategy.com) However, the countries vision goas beyond this: where people enjoy high incomes and also a higher level of public wellbeing. To accelerate the process, NBOS initiatives formulated an executive board through the NBOS summit, which is a unique and dynamic national strategic platform, brings together ministries, agencies, all levels of government- and private sector on a volunteer basis to develop the economy. The effect of the program could be perceived in several fields of the macro- and micro economical facts. To introduce the current status, I will use later the framework of the STEEP analysis. STEEP analysis – however not the model of the 21st century, but provides a good framework in this meaning – is a tool for structuring thinking and key categories to make sure, one understands correctly the situation of a certain area. It is also widely used to gain an insight into the past, current and future external environment developments, but it is also ideal to traverse constant flow of information. The frame helps to answer the questions, what are the key facts, events and trends within different elements (1), and what is the evidence supporting the existence of the trends (2). Usually the analysis is proceeded in five steps, like understanding the elements (1), assess the interrelationship between different trends (2), relate the trends to different issues (3), forecast the upcoming direction of issues (4) and derive the implications (5). In the following analysis the author will stick to step one to three, aka it will be identified according to secondary databases and mainly, also to widely experiences of field-work, what kind of effects do the trends have, as well as how and what kind of trends play significant role in boosting or hindering the development process to reach country goals in the focus on entrepreneurship. The analyses also rely on the preconception and hypothesizes of the author. 1.1. General facts on Malaysia Official name of the country is in local language is Persekutuan Malaysia, in international form Federation of Malaysia, or in simply, shortened form, Malaysia. The country itself could be divided into two geographical regions: the peninsular Malaysia and to Malaysian Borneo. On the Malay Peninsula it is bordered on inland by Singapore on the South and by Thailand on the North, while East Malaysia – aka islandic Malaysian Borneo – is neighboring Indonesia and the Sultanate of Brunei. The country also has two maritime borders: on the one hand to Vietnam, on the other to the Philippines. However, as we will see also later, Malaysia is highly a multicultural country – which also means, that it is multi-religious and multi-ethnical in the same time – it is the third wealthiest and the most developed country in the region. (www.nationsonline.org) The federation become independent in 1957. In September 1963, the federation was enlarged by the accession of the states of Singapore, Sabah and Sarawak. This is also the date since when, the country is called ‘Malaysia’. The final territory of the state evolved in 1965, when Singapore left the federation. The rapid development in all field started in the late 70s. The

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influence of the United Kingdom could be traced in several fields, like in language, left-handed driving and law. The introduction of the influencing factors will be presented in the followings. 1.2. S, as Social factor Social factor covers demographic structure of the population (1) – as age distribution, sex ratio, career attributes, health consciousness, safety awareness, number of birth and death and shows tendencies –; cultural specialties (2) – as lifestyle, mobility, education, religion, customs, customer behavior – and intra- and interpersonal characteristics (3) – as learning speed, motivation, perception and cognition. The population of Malaysia was 31,66 million in 2016 according to the Department of Statistic Malaysia, from which 16,36 million was male and 15,30 million was female. (www.dosm.gov.my/a) This means totally 5,8 million households. The population itself is an aging one, but not in a way as European societies. The percentage of youngster, aged 0-14 years old decreased 0,4% and numbered as 7,7567 million. Working age population – aged 15-64 years old – is augmenting, during the last years with 0,2 percentage point – numbering 21,97 million – in 2016, as compered to the previous year. Subsequently, elder population, above 65, also increased with 0,2 percent, but it means still only less than 2 million inhabitants. (www.dosm.gov.my/b) According to life expectancy, Malaysia is ranking on the 65th place worldwide, with an expected life of 72,7 years for male, and 77,3 years for women inhabitants. (www.worldlifeexpectancy.com) Malaysia reflects different cultural traditions, as it is highly multicultural, including those of China, India, the Middle East, Europe and the entire Malay Archipelago. As for ethnic composition, among Malaysian citizens, ethnic ‘Bumiputera’ (also referred as Malays) represents 68,6 per cent, followed by Chinese with 23,4% and Indian with 7%. (www.dosm.gov.my/b) The remaining one percent is highly multicultural: it comes mostly from previous expatriates. Taking into consideration international business, the percentage of non-Malaysian citizen in 2016 was at 10.3 per cent out of total population in Malaysia. The ethnical diversity gives also religious- and as well as cultural diversity. The country is predominately Islamic in its region, but only the Malay Muslims who are bound by Islamic laws, the rest of the population can freely practice own religion. All ethnic Malays are Muslim, Chinese population is (usually) Buddhist, combining Confucian and Taoist practices, while Indians are (usually) Hindu, and there is also a small minority of Christian and Sikhs. (www.pluralism.org) Despite the Muslim majority, Malaysia is not an Islamic state. (EMBONG 2001 p13) But it is rather a plural society. The mix of population gives Malaysia a rich and vibrant culture, and the country is seen as an example of racial harmony as the different populations have existed peacefully together for years. A collective, but distinctively Malay cultural pattern has emerged out of all these influencing factors, with artistic expressions in literature, music, dance and arts forms. However, there are traceable certain representative characteristics, like sons are preferred over daughters in order to maintain the family surname through descents, or in the number of public holidays, like religious celebrations, because of the mixture of religions. The cultural differences mean that businesses entering the country will have to adapt their products and business practices to suit the needs of the population, for example in case of food and beverages, it is

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appreciated to have ‘halal’ certificate for good. But it also means, that rather easy to find the target market in a diversified society. Malays have traditionally predominated in politics and government, ethnic Chinese and Indians have been disproportionately successful in the economy. Most of the local businesses are owned by Chinese, ties hinder occupational mobility among Malays. Life in the city and rural living forms are significantly different, which also means, that there is a remarkable difference also in business as about ¾ of the population is rural. The following, Table 1, represents the three main caste’s indicator according to Hofstede framework.

Table 1 – Hofstede’s indicators in Malaysian society

Power distance

Individualism

Muscularity

Uncertainty Avoidance

Long term orientation

Indulgence

Malay 100 26 50 36 41 57

Chinese 80 20 66 30 87 24

Indian 77 48 56 40 51 26 Source: https://geert-hofstede.com/malaysia.html

As it is visible from the table, there are factors, which are significantly different from each other and with the difference, the discrepant attitude towards business could be interpreted. The dimension of power distance describes the equality of members of the society, where the high number represent the difference and inequality. That also means, people in Malaysia accept hierarchical arrangements and the fact, that everybody has role in the society. It also means, that open-office places are not widespread, to share information has an order, there are privileges for people in leading positions, which is widely accepted. Any challenges and opinion towards the leadership are not well-received, as the leadership itself is usually highly autocrat. Hierarchical arrangements are also accepted in Chinese and Indian culture, but differences are less appreciated. The easier and more direct way of communication between different levels could improve business performance. Despite the high values of power distance, both Malay and Chinese inhabitants are collectivist, where people are characterized according their network – and not according to their own results – where people are living in multi-generational families, where there is a high commitment to be a member of a group, long-term, usually life-long relations are habitual and where loyalty playing an important role. Indians are closer to individualism – with personal achievement, core-families and results orientation – but still collectivist. The collectivist aspect makes capable the members of society to play in teams, learn together and entire network conduce long-lasting business relationships. The muscularity index of the three ethnical group fall quite close to each other and scores around intermediate level. It means, that in this point of view, there is no extremity, it is difficult to decide whether they are preform according to muscular expectations – where achievement and performance are the commands, where weakness and discrepancy from normal/average are not accepted – or feminine values, as caring and where quality of life are in preponderance. The results of the mean value means, that society is consistent, the saying ‘living for working’ and ‘work for living’ are present in the same time both in private and business life.

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There is also not a significant difference in the values of uncertainty index. The low values of UAI predestinate high entrepreneurial activity, as members of the society do not stick to rules, are open to take risk and deviance from the normal or average is easily tolerated. Malay people as other societies with low UAI, that there is not only one right solution, or a single one at all and innovation is not seen as threatening. However, schedules and conditions are rather flexible and punctuality as well as precision do not come alone naturally, hard work is known and undertaken, when it is necessary. These facts contribute highly to the high entrepreneurial rate and success in Malaysia. Long term orientation reflects the way, how a society could and able to vindicate link towards its past, but in the same time, it describes, how is it possible to fasten past and future and how is it possible to face with challenges – both present and upcoming. Lower scores reflect to a country, where traditions play an important role, while higher scores represent a more open-minded approach, where according to Hofstede for example thrifts and efforts in modern education are encouraged. Chinese minority represents within the Malaysian culture a high rate in long term orientation, while both ‘Bumiputera’s and Indians core rather low. According to the interviewees and experiences it is also visible in business life: however, all three main casts are as open for setting a business as others, Chinese population is rather involved into non-traditional businesses. While the rest of the culture is rather normative in thinking: they exhibit great respect for traditions, a relatively small propensity to save for the future and focus on achieving quick results. (www.geert-hofstede.com) It can also be traced in business life: especially freshly set businesses and their owners want to achieve high revenues fast and short-time capital return. Last element of the Hofstede model is indulgence, where Malays score rather high, while the rest of the population extremely low. (Indulgence itself is the situation, when there is a relatively weak control on own desires and impulses, while strong control is called ‘restraint’.) Malaysia score 57, which means that people are usually optimistic and possess a positive attitude, in the same time they are giving way to their desires and impulses, work to live and enjoy life with having fun. These attributes have on the other hand some disadvantage, as Malay people are able to put emphasize to leisure time and holiday, that it would be certainly necessary, therefore attitude towards work is different from that, Europeans are get to used to. Ramadan, the month long fasting is the ninth month of the Islamic lunar calendar. ‘During Ramadan, every part of our bodies must be restrained. The tongue must be restrained from backbiting and gossip. The eyes must restrain themselves from looking at unlawful things. The hand must give in charity and not touch or take anything that does not belong to it. The ears must refrain from listening to idle talk or obscene words. The feet must refrain from going to sinful places. In such a way, every part of the body observes the fast’. (NEUMAN 2015 p166) During Ramadan according to interviewees business slow-up, less activity happens, social business activities stop and the feast also has affects consumer habits. Therefor, expatriates and foreigner should count with a slightly different working moral and biorhythm.

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1.3. T, as Technological factor Technological factor evolves changes in technology, R&D activity, obsolesce rate, rate and degree of automation and innovation, as well as innovational processes and the connecting institutional and regulatory background. As Lai and Yap (2004) ascertained, that the number of patents granted to Malaysia is rather low, because two of the influencing internal factors are insufficient. These factors were the insufficient financial resources and the lack of skilled R&D personnel (LAI–YAP 2004 p61) back in 2004. But as the government is highly committed toward its general goal – anchoring growth on people – several programs were started. As the government is committed to technological development: there are several programs, aiming technological development. Importance of the sector is also represented by the continuously growing rate of research and development expenditure in % of the GDP. In 1996, the value was 0,22. For 2015 it grew to 1,26%, which is 12.858 USD per capita. (www.data.worldbank.org) The same indicator for Hungary during the same period is 0,63 and 1,37 respectively. There are several explanations for the growth: in 1996, the Malaysian government launched the program, called ‘MSC’, aka the ‘Multimedia Super Corridor’, which is a strip of land stretching from the central business district of Kuala Lumpur to the out-of-town of KLIA (Kuala Lumpur International Airports). The corridor hosts more than 360 multinationals, including foreign-owned and home growth Malaysian companies; all focused on multimedia and communication products. The program continued to expand and attract world-leading ICT companies. The high levels of investments in training and education including the creation of number of ‘Smart Schools’ and an excellent infrastructure, including a brand new town, called Cyberjaya, which is a self-contained intelligent city with world class infrastructure. It is the level of technological support, that makes Malaysia an attractive place for foreign firms to do business. In fact, Cyberjaya is considered one of the top three destination for business support and outsourcing in the world. (www.worldfinance.com) Other initiative – the high-tech priority in economical transformation – is the so called ‘Multimedia Development Corporation’. The focus on technology starts early, in the pre-educational phase. The government earmarked for 2014 to rise the ratio of computer per students to a ratio, where one device is available for every five students. (www.thegurdian.com) Foreign Direct Investments (FDI) are playing an important role in the technological driven Malaysian economy, as it is the main source for investments, technology transfer and building export possibilities. According to The Eleventh Malaysian Plan [2016 p2-6], between 2011 and 2014 a total of RM139 billion (32,5 million USD) of FDI was recorded, with Japan, Singapore, the Netherlands, being as main contributors. According to the Federal Government fiscal policy, there is also a strong emphasize on developmental expenditures. In the period of the 11th plan, the importance of innovation and technology, as well as development of intellectual capital, and also productivity improvement will remain in focus for further development. The openness and commitment can be also traced in financial assistance system, which was totaling up to RM495,2 million (USD 115,7 million). 760 local, settled by Bumiputeras, small

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and medium enterprises in developmental and growth stage was financed by the Malaysian Technology Development Corporation (MTDC), Malaysia Venture Capital Management Berhad, Malaysia Debt Venture Berhard and Multimedia Development Corporation (MDeC). (www.epu.gov.my/a) The programs turned so successful, that in 2012 Malaysia’s technology and innovation industry was appointed as the most buoyant among Southeast Asian countries. (www.insidinvestor.com p70) As it will be demonstrated later, the success goes back not only to the governmental fiscal politics, but also the educational and supporting frames, to the one, which is represented by the city of Cyberjaya, the Silicon Valley of Malaysia. (www.insidinvestor.com p72) As for infrastructural indicators – however country is playing an important role in the ITC sector – Malaysia is doing not exactly well in all fields. This is one of the countries, where, for example 4G networks are not available. (Open Signal Survey 2016) According to the Internet World Stats, the number of Malaysian Internet users was a little bit more than 21 million inhabitants in 2016 summer, which means, that there is a coverage of 68%. (www.internetworldstats.com) The rate looks probably low for the first look, but Malaysian government places more priority on the provision of connectivity to, as many areas as possible, in the entire country, than focus more on Internet speed compared to the number of areas that are given service coverage. (www.themalaymailonline.com) As for the general infrastructure, the independent Malaysia inherited a sufficient, but not equally developed infrastructural system, so it was necessary to make investments and effort to develop motorway network, country railroad network, sea- and airport system. Malaysia is served by a network of 94,500 kilometers (58,721 miles) of primary and secondary roads, 70,970 kilometers (44,100 miles) of which are paved. This includes 580 kilometers (360 miles) of superior quality expressways, which connect Kuala Lumpur with Singapore and with major seaports and other destinations. (Nations Encyclopedia 2016) The railway system is not so developed, only 148 kilometers is electrified. During the Tenth Malaysia Plan, 93.100 kilometers of new roads were added, which meant an increase of 68% of the total network, while two ports – Port Klang and Selangor – were selected to the Top20 worldwide; there was an increase of 39% of passengers at international airports, mostly because KLIA2 opened, which is the base of the worldwide best discount airline, AirAsia; there was also an increase of 32% in urban rail ridership from 2010 to 2014; as well as the countries Logistics Performance Index ranking rose from 29 to 25 according to the World Bank. (www.epu.gov.my/b p7-8) According to the Plan, further developments are required to achieve goals: building an integrated, need-based transportation system (nowadays to use Uber od GrabCar ride sharing applications is extremely popular, fast, reliable, rather cheap and preferred against mass-transportation) (1); improving coverage quality and affordability of digital infrastructure (2); continuing the transition to a new water services industry framework (3); and encouraging sustainable energy use to support growth (4). The latter two is connecting the next step of the analyses, too.

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1.4. E, as Ecological factor As we could see previously, rapid development happened in Malaysia. This fast improvement in several part of life means also high environmental costs, also called negative externalities. This chapter is on the one hand about general economical conditions – as weather, climate, territory etc. –, on the other hand about negative externalities and possible solution for them. The Area of the country is 329.847 sq. meter, from which only 0,3% is water. (www.cnn.com) The inland was once covered totally by tropical rainforest, but with the spreading of mankind, the territory of forest is shrinking. Nowadays, about 59% of the surface is covered by rainforest. (www.wwf.org.my) The rainforest has importance in two meanings: it is required because of environment protection, fresh air, but on the other hand, it is recognized as one of the most productive and economically successful type of forest in the world. The cutting is continuous: there are quite a high number of fields, where originally there was a rainforest, but where it is now either a populated area (from time to time it is cut only because of the expanding infrastructure), or which was transferred into and palm oil production grove, as it is the most profitable industry in the country and it is used on the one hand for processing food we eat, and as a source of biofuel. There are different institutions to foster rainforest protection. For example, FRIM (Forest Research Institute Malaysia) in the suburb of Kuala Lumpur is doing laboratory researches concerning forestry, but it is also involved into education, to introduce to the wide range of inhabitants the ecosystem of the rainforest. Malaysia has a tropical climate, with an average temperature of 27 Celsius degrees, due to its location. Usually daily peak temperature is above 30 Celsius, but the night temperature never drops below 20. (www.expatfocus.com) The general rainfall is 250 centimeters per year, which means about 230-250 rainy days. (www.ortechnologies.net) The distribution of rain is not consistent, as because of the geographical location, monsoons are influential in Malaysia. In two certain period of the year – usually from May to September, and from November through March – there are the monsoon periods with everyday and higher rainfall than in other periods. There is also a slight difference between territories: The West coast’s wet season is relatively mild, while the East, the rains are heavier. For foreigners, almost everyday rains may seem strange, but as they are usually coming and going fast, it is easy to adopt to circumstances. As the country is rather close to the Equator and the number of hours with sunshine is relatively high, sun protection is required. There is a special – for Western people unknown – phenomenon, which afflict Malaysia and surrounding countries from time to time, the haze. Haze consists of sufficient smoke, dust, moisture, and vapor suspended in air to impair visibility. (www.haze.asean.org) Haze itself is like a blanket or perianth, which is reducing or stopping totally sunlight because of the penetrating smoke, while it also traps the heat, stops the natural air movements and therefore accelerate heath. There are several – mostly economical – reasons behind its genesis: it could be formed because of deforestation, either of annual clearings in rain forests (open burning), or because infrastructural development. It has not only health effect, but it also influencing power on economics. Already The Tenth Malaysia Plan recognized the importance of sustainability and environmental protection and introduced several proposals with sufficient results, the current plan even put a higher emphasize on it. The name of the program is ‘Pursuing growth for

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sustainability and resilience’ and consists of four main parts: it aims on the one hand the strengthening resilience against climate change and natural disasters, include movements as improvement of flood mitigation or enhancing climate change adaptations (1); on the other hand, it is committed to enable growth with green aspects, like introduce sustainable financing mechanism and setting of environmental-focused, responsible enterprises (2); but also involves the adaptation of sustainable consumption with the creation of green markets and dissemination of renewable energy sources (3); as well as aiming conservation of natural resources for present and future generations (4). The aim of the program is to deduce GHGs – greenhouse gases – emission intensity of GDP up to 40% compered to the level of 2005. (www.epu.gov.my/c) 1.5. E, as Economical factor Setting a business in Malaysia, or in any other countries, could be influenced highly by the economical factors, which will represent indicators and trends, as inflation rate, (un)employment rate, fluctuating currency exchange rates, changing interest rates, taxes, fees, and costs of doing business. The economic environment contains aspects dealing with individuals’ capacity to obtain products or services given the set of economic conditions. Analysts must properly assess how consumers will react when there are changes within the environment and how their firm should adjust their strategy to remain competitive given the circumstances. To be able to understand trends and processes on the market and the influencing indicators, it is inevitable to get to know the countries history in a brief. The country got independent in 1967, so the rapid growth can be traced since that date. In the period between 1965-1984 there was a broad diversification, which sustained rapid growth because of both foreign and domestic investments in manufacturing. Within the 70’s, there was a dramatically growth, which continued with a growth of 13% in the petroleum sector. In the 1970s Malaysia was one of the world’s largest producer of tin, rubber, palm oil. During the world recession (1981-82) GNP fall because of foreign depts. But after the recession the further diversification of the manufacturing sector helped to renew growth, as it aimed not to be so dependent on export. This further diversification resulted, that areas as tourism, real estate, export in electronics devises, technology services were encouraged too, which attracted into the country investments. From the 90’s, the government altered policies due to size of the public sector deficit and growth of foreign debts. Economic Transformation Program (ETP) Malaysia has to attract total investments worth RM 1.4 trillion during 2011-2020. (www.pemandu.gov.my p20) Private investments (92%) and the rest through the public sector (8%). In private investments, 73% from Domestic Direct Investments and 27% from Foreign Direct Investments. Mostly into services and than manufacturing (it is more than 80% of all the investments). Most important category in the consumer price index are Food and beverages (non-alcoholic), with 30% of total weight, housing, water and electricity, gas and other fuel (23%), transport 15%, communication 6 percent, recreation and culture 5%, furnishing, household equipment and routine household maintenance 4%. (www.issuu.com p60)

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Ongoing economic reforms have enhanced Malaysia’s competitiveness. The economy is highly open and leading exporter of electrical appliances, electronic parts and component, palm oil and natural gas. Malaysia is number 19 according to the IMD World Competitiveness Yearbook, with a performance of 83,048% - where Hong Kong represents the 100%, Switzerland 98,018%, while the USA 97,88%. (Hungary is ranked on the 46th spot, with the value of 62,64%.) According to Heritage – which is a scientific institution measuring Index of Economic Freedom, including economic freedom scores and macroeconomics data for 186 countries, cross-country comparisons and highlight economic freedom matters – trade is extremely important to Malaysia’s economic, as the value of exports and imports taken together, equals 134% of GDP. (www.heritage.org) The average applied tariff rate is 4,4%. The index further ascertainment is, that investment in some sectors is restricted and state-owned enterprises distort the economy. The financial sector continues to grow, and its competitiveness is increasing. Supervision of banking has been strengthened, and measures to liberalize capital markets have progressed. Most important export partners of Malaysia are Singapore (14,2%), China (12%) and Japan (10,8%), while Hungary is ranked on the spot 55, with less than 0,1% of total Malaysian exports. (www.matrade.gov.my/a) As for import, most of the good (16,9%) arrives to Malaysia from China, Singapore (12,5%) and Japan (8%). Hungary is again counting to the non-important partners with a value of 0,1% and 61st rank. (www.matrade.gov.my/b) The economy itself is vibrant. Over the last 10 years, economic growth was around 7%. Therefore, retailers also appeared because of vibrant economical life during the last years, with a results, that retailers, like Tesco, IKEA or Carrefour, as well as all international textile traders, for example Inditex Group appeared in the country. The economic indicators are also demonstrative and convincing, especially taking into consideration the improving trends. In the followings, the most important economic indicators will be presented. Data collection was made by Global Economy (www.theglobaleconomy.com/a) According to the World Bank, between 1961 and 2015 the average value of GDP was 6.35%, with a peak of 11,71% in 1973 and with a minimum of -7,36% in 1998. During the last decade, GDP is not growing as rapidly as before the millennium, but still, Malaysia is doing well. With an expansion of 4,97%, Malaysia was ranked as 36 on the World Bank’s list, situated just before Luxembourg, the Czech Republic and Iceland. Compared with Hungary, which is situated on the 81st spot with a value of 3,15%, Malaysia is expanding faster during the last years. The GDP trends in Malaysia are represented on Figure 1. Per capita GDP is about RM38.830, which is approximately 9.100 USD.

Figure 1 – GDP trends of Malaysia

Source: www.theglobaleconomy.com/a

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As for the Customer Price Index, Malaysia is doing better and better from year to year: there are only a few years of the last 65, when it was lower then nowadays. However, there was a slight increment in inflation rates during last years, according to the World Bank, with a value of 2,1%, Malaysia was ranked on the 51st spot, (Hungary was doing even better according to this list, with a rate of 0,4%). The reason for the average inflation rate could be delivered from value of the capital investment as percent of GDP: the average value for Malaysia during the last 65 years was around 26,2%, during the last 5 years (2010-2015), the values are respectively 23,19; 25,75; 25,95; 25,02 and 25,09. (www.theglobaleconomy.com/b)

The country’s goal is to be an advanced nation by 2020, where there is general well-being. Human Development Index, the indicator of long and healthy life, knowledge, and a decent standard of living, which also represents the development of a country not only according to the ultimate criteria of economic growth, is slightly deficient in case of Malaysia, but there is a continuous development in the value of the index, peaked 2015 with 0,789. With this value, Malaysia is ranked 59, which is slightly worse as the value of Hungary (rank 43., 0.836). But if the trends are compered, since the millennium, in case of Malaysia, there was an improvement of 9,7% of HDI, while in the case of Hungary, this indicator is 10,7%. However, if the household consumption is compered, in Hungary there was an incensement from 61.45 USD to 69.61 USD, while in Malaysia from 63,42 to 160,3 USD. With this almost 200% expansion, Malaysia is still only on the 37th place worldwide. (www.theglobaleconomy.com/c) Other important indicator of the economy is the total number of labor force and the unemployment rate. Comprehensive analysis is indicated in Table 2. As it is recognizable, the average rate of unemployment in Malaysia is 3,28%, which means about 500.000 unemployed. During the last two years, this data is somewhat over long-term average, but still Malaysia is between the best 30 in case worldwide. There was a visible change around 2010 in the number of participants on the labor market. According to the interviewees, the boom happened because governmental policies and improvement in entrepreneurial development support.

Table 2 – Indicators concerning Labor force in Malaysia (2010-2015)

Labor force (m) Unemployment

rate Labor force

participation Age dependency

2001 9,73 3,5% 63,01% 61,37%

2010 12,22 3,4% 59,81% 47,81%

2011 12,73 3,1% 60,86% 46,93%

2012 13,22 3,0% 61,86% 46,33%

2013 13,83 3,1% 63,25% 45,40 %

2014 14,11 2,87% 63,24% 45,02%

2015 14,4 3,1% 63,31% 44,74% Source: www.theglobaleconomy.com/d; www.theglobaleconomy.com/e

The capital of Malaysia is Kuala Lumpur – locals refer to it as KL – and the currency is ringgit (RM). The exchange is is like 1 RM=64,80HUF, or 1USD=4,28RM. (www.x-rates.com)

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Main industries are rubber, palm oil processing and manufacturing, as well as mining industry. Main business partners are Singapore, China, USA, Japan, Thailand, Hong Kong, India, Australia in case of export, while China, Singapore, Japan, USA, Thailand, Indonesia, South Korea in import. The total value of export in 2016 was RM785,93 billion, while the value of import is RM 696,85. (www.matrade.gov.my/a) The most important export products were electrical and electronic products (36,6%), chemical products (7,5%), petroleum products (6,9%), palm oil (5,3%), machinery, equipment and parts (4,8%), manufactures of metal (4,2%), LNG (4,1%), optical and scientific equipment (3,7%), crude petroleum (2,8%), rubber products (2,6%). The distribution of the exported products exemplifies, that electronical products play an important role in the economy and underline the existence of a well-developed IT-based start-up system, as interviewees appointed. As the goal of this study is to introduce Malaysia and give some insight to the entrepreneurial mindset and circumstances, the indicator introducing the cost of starting a business is also relevant. The World Bank determine this indicator in percentage of GDP per capita, which is available in Malaysia since 2003. As it is indicated on Figure 2., the cost of starting a business is continuously reducing in Malaysia. In 2003 it was 1/3 of yearly income, which contribution was reduced to 6,2% of GDP per capita for 2015. As one of the interviewees pointed out, this is also an indication of conscious, enterprise-building governmental policy.

Figure 2 – Cost of starting a business in Malaysia (2003-2015)

Source: www.theglobaleconomy.com/f

In international comparison, Malaysia with this contribution is somewhere in the middle of the field, however, ranks as the 115th most expensive on the total list of 184 countries. Situation in Hungary is quite similar, where 7.10% of GDP per capita is needed to set own company. According to one of the interviewees, this amount is rather misleading, as there are quite significant differences between setting different type of businesses. Comparing not only the percentage of GDP contribution to business setting, the amount itself, we should say, that there are no significant differences between Hungary and Malaysia. 1.6. P, as Political factor The legal and regulatory factors included labor laws, tax policies, consumer protection laws, employment laws, environmental regulations and tariff & trade restrictions are belonging to the political factors. Often, the foreign policy of a country plays an important role in determining the trade regulations, which can either result in trade restrictions or trade incentives.

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Malaysia is a federal constitutional monarchy and a multi-party democracy country. The ruling Barisan national party has been in power over 25 years, with a results of high degree of stability, as an important influencing factor in international business. According to the World Bank the index of Political Stability and Absence of Violence/Terrorism – which measures perceptions of the likelihood that the government will be destabilized or overthrown by unconstitutional or violent means, including politically-motivated violence and terrorism – is 0,19 on a scale from -2,5 to 2,5. (www.theglobaleconomy.com/g) However, interviewees pointed out, that politically, the country is stable, during last last years, there was some fluctuation in the index, see Figure 3. The head of the state is the king. Currently Sultam Muhammad V of Keletan is ruling. He was selected in December 2016, as there is a quinquennial exchange in the dominant personal, and he was intercalating at the end of April, 2017. Interviewees could colligate the last nadir with the previous change of the head of the state.

Figure 3 – Index of political stability in Malaysia (1996-2015)

Source: www.theglobaleconomy.com/g

Corruption does exist in Malaysia, which can accrue as a barrier in international business. Transparency International ranks Malaysia on the place Nr. 55 of 176 countries. (Hungary scores as 57th.) The trends show, that corruption is increasing, as previous data from 2012 to 2015 in time order were 49, 50, 52, 50, doing similar as Hungary. (www.transparency.org) The legal system is based on British common law, although Islamic law is applied to Muslim population. The British law system is ideal and advantageous for firm investing as the law is familiar to Western European. But there are also differences: death penalty and flogging are still widely used alongside Malaysia. There are certain indexes and indicators for representing political status and stability. As it is visible from Table 3, there is a case of some indicators, there are quite rapid changes. For example corporate tax rate was increased with 5% during the last years, while total number of taxis staying about the same during the last 10 years. Self-assessment system is applied for all taxpayer on a yearly basis with two main types: direct (income-, real property gains-, petroleum income taxes) and indirect (excise-, import and export-, stamp duty, goods and services Tax). The taxation system is territorial in scope. All income accrued in, derived from or remitted to Malaysia is liable to tax. However, income of any person (other than a resident company carrying on the business of banking, insurance or sea or air transport) derived from sources

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outside Malaysia and received in Malaysia is exempted from tax. (https://globalconnections.hsbc.com)

Table 3 – Summary of indicators of Governance and political system in Malaysia (2010-2016)

Name of index Value 2000

Rank 2000

Value 2010

Rank 2010

Value 2013

Rank 2013

Value 2016

Rank 2016

Rule of Law* 0,31 70 0,53 62 0,47 63 0,57 52

Government effectiveness**

1,05 33 1,13 33 1,01 38 0,96 43

Regulatory quality*** 0,52 57 0,60 53 0,65 49 0,77 47

Corporate tax rate n.a. n.a. 25 61 25 62 30 21

Personal income tax n.a. n.a. 26 62 26 72 28 51

Commercial tax rate n.a. n.a. 33,90% 111 39,10% 89 40% 82

Number of taxes n.a. n.a. 12 130 13 128 13 123 * The index for Rule of Law captures perceptions of the extent to which agents have confidence in and abide by the rules of society, and in particular the quality of contract enforcement, property rights, the police, and the courts, as well as the likelihood of crime and violence, , scoring from -2,5 to 2,5. ** The index of Government Effectiveness captures perceptions of the quality of public services, the quality of the civil service and the degree of its independence from political pressures, the quality of policy formulation and implementation, and the credibility of the government's commitment to such policies, , scoring from -2,5 to 2,5. *** The index of Regulatory Quality captures perceptions of the ability of the government to formulate and implement sound policies and regulations that permit and promote private sector development, scoring from -

2,5 to 2,5. Source: according to www.theglobaleconomy.com/h,I,j,k,l,m,n

At the political and legal regulation, visa system should be presented: to enter Malaysia, immigrant should apply for a visa. Totally five different type of visas are available. There is a holiday of social visa, valid for 90 days for business or leisure (1). On the other hand, there is a work permit visa, which is like an employment pass (2). To apply for this visa, immigrant should possess a certificate of employment with a certain minimum paid up capital requirements. Previously it was RM 3.000, right now it is RM5.000 per month, or over RM144.000 in three years. According to one of the interviewees, it will highly influence the number of expatriates. She explained, that usually expatriates get the normal salary and several additions, as the employee pay for the transport of family and stuff to KL, hire a cottage or flat, rent a car, provide a work-phone and pay for the schooling. She reckons, that to employ a foreigner, an expat, costs more than a local, with the increase in the requirement (further are awaited), number of foreigners will significantly change. On the one hand, foreign workforce is much cheaper, but more experienced, while there is a requirement to strengthen the position of Malaysians – minimal percentage of them is set – is a disadvantage according to the opinion of expats. The fairly new visa option is Malaysia is the Residence Pass, which is allowed for those, who are staying and living at least for up to 10 years in the country (3). Special type of it permanent residency status (4), which is the the first step to PR, and which could be use for example during seeking employment, setting own business as a foreigner. Malaysia My Second Home (MM2H) visa (5) is a possibility for those, who would like to retire in the country.(www.expatgo.com)

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2. Entrepreneurial mindset of Malaysia The introduction of the Malaysian entrepreneurial ecosystem is double-based: it refers to the information from secondary research, as well as to the in-depth interviews, see introduction. First, the general view of Malaysian entrepreneurship will be introduced, later, briefly the most important elements of the ecosystem. The aim of this part of the study is to give a general view for non-Malaysians about the local entrepreneurial ecosystem and to underline the base for a further research. It is not the goal of this study to analyze certain, determining actor of the ecosystem. The introduction is according to the sequence of questions to interviewees, and topics are covered according to their recommendation. There is no common understanding about the characteristic of the Malaysian entrepreneurial life. According to a part of the interviewees, entrepreneurial life is rather moderate, because market uncertainties. This kind of quandary is the market itself (1) – as it is unpredictable because of its multiculturalism; but in the same time, this diversity offers numberless opportunities, too – as well as the financial situation and financing models are also rather questionable (2). Others explain the moderate adjudication with the laggard vibration of the entrepreneurship, compared for example with Singapore. Interviewees chime in it, that the government in Malaysia is rather supportive, as for newly settled enterprises, several structured – like formal educational based, university driven programs and courses – as well as non-structured – like accelerator and incubator – programs are offered. This conducive to the boost in entrepreneurial ventures. There are aspects, according to interviewees, it is rather difficult to decide, whether it is more vivid or rather moderate. Three of the interviewees mentioned, that according to them, there are differences between communities. They would say, entrepreneurship is rather moderate among Bumiputeras origin, because there are more and better quality job opportunities available for them, compered with others coming from different minorities. One of the interviewees described it with an example: ‘When parents are working in the public/private sector as employees and they believe, that getting their children good education will lead to better employment opportunities, than children also aim to get good job, rather than aiming to start a business’ and choosing high uncertainty. This behavior is somewhat in contradiction with Hofstede Long term orientation dimension, but still watertight because of occupied positions and career improvement possibilities. On the other hand, entrepreneurial life among people with Chinese origin could be titulated rather vivid, as the best option to achieve success in work-life was to become an entrepreneur. However, there are certain changes in hiring people, discrimination is getting less and less important, people from Chinese community still rather prefer to start own business than seeking employment. This entrepreneurial attitude guarantees, that from twelve, worldwide listed Malaysian billionaire, nine is counting Chinese originated. To probe the reasons, why Malaysian inhabitants are entrepreneurial-minded, three factor could be determined: on the one hand, most of the youth – usually the representative of Y generation – wants to be an entrepreneur (1), but either their do not have the idea, or the required skills, consequently, they are facing continuously difficulties in their start-up period, which deter them to become a successful entrepreneur. On the other hand, governmental support and start-up funding for newly settled business also boots this process (2), however the willingness to be an entrepreneur is differing from cast to cast. Y generational, or

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millennial Bumiputeras are in an exceptional position, as certain programs – which, usually comes without any equity in the business or without any interest, so therefore, young graduates like to opt for starting up their own business rather then seeking employment. This kind of programs also motivate potential entrepreneurs to choose entrepreneurship as a choice of lifestyle. Last, but not least, promotions by government and policies boost entrepreneurship already in tertiary educational level, at different universities and institutional level of higher education (3). On the other side of the balance, we should name the factors, negatively influencing entrepreneurship willingness. According to four of nine interviewees, people are afraid to set a business because of the financial risks, especially because of the lack of funds (1) despite of governmental funds and programs. According to others, potential entrepreneurs are afraid, that they will be not able to meet the needs and desires of the target market (2), or their business model will not suite for the the current market and trends (3). It is also questionable, whether they actually have the knowledge and skill to set a business model, or the entrepreneurs try to lead their entrepreneurship according to their anticipation (4). There are also people, who do not understand business at all, as there are more job opportunities in Malaysia than jobless people (5), so they are not stand in a need for it. We should also state, that business failure/success is a rather subjective question in the business field, the number of influencing factors is countless, but interviewees experience and insight could enlighten the most important factors. As the description of a general entrepreneur manifest differences in entrepreneurial-mindset, interviewees were asked to describe the most type of Malaysian entrepreneur. The answers vary on a wide range: it could be a young adult, with sufficient amount of money to invest (1), or an experienced professional over 50-55 years old, setting own business to evolve (2), or could be described usually a male, age around 35-40, most probably in city areas, like Kuala Lumpur, Penang or Johor Bahru (3), or according to someone else without educational, generic or geographical discrimination anybody, who is following Chesnee traditions and bearing the Chinese mindset (4). According to a female entrepreneur, if we are analyzing Malay entrepreneurs, we will face a lot of Bumiputera female entrepreneur, usually one under 30 years and most probably in a technology driven startup or industry (5). Contrary to it, others emphasize, that entrepreneurship is dominated by males between Indian originated inhabitants, though their businesses are based on selling imported products, like cloths, food, grocery, rather than representing a technology-driven industry (6). Except one of the interviewees harmonized in one thing: most probably entrepreneurs are coming form the millennials, from the generation Y, as a lot of them have a more privileged background and are also very interested in starting entrepreneurial ventures (7). However, the interviewees mentioned the multiculturalism of oneself, according to the authors mindset, it was one, of the most important factors to examine. Therefore, a separate block of question examined the effects of multiculturalism on Malaysian entrepreneurship. It is generally agreed, that Chinese have a great propensity towards money and the making of it (1). It was also often mentioned, the Malays, however, are not to savvy about making money, but they try to become businessmen, however a very few succeed only (2). It is definitely, because there is difference in religion or origin, which causes different mindset (3). There are no good or bad mindsets, these mindsets could be successful, but the success is depending on the circumstances. The appearing difference will obviously effect the point of views or the messages itself as well as the understanding of it (4). As it was stated previously, and also

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according to one of the interviewees it is important to emphasize, that Malaysia is a highly multicultural and predominantly Muslim country. ‘This influences the entrepreneurial attitude: as there are more job opportunities for people of Malay origin, therefore, they are less inclined towards entrepreneurship and even when they start a business – due to normative influence – there are more chances of survival, than a business started by people of other origins. Hence, they would not provide the same level of customer satisfaction or they would not put as much efforts to make business successful as people of other origins would. Government is putting more efforts to uplift the people of Bumiputera origin and also provide them with necessary resources to start a successful business. I would say that there is less discrimination by government now, when they provide funding, because the country has progressed and people are more liberal now than before.’ However, there is a written equity within the country, we could say, that supporting system does not have normal distribution (5). It is also mentionable, that different mindset could make extremely successful or totally unsuccessful teamwork (6), and even the approach on how to provide offerings to customers (7). Business success is also influenced by customer segments, as they are quite often determined by religious base. To fulfill needs and wants of customers of other races is rather difficult without openness and the knowledge of it (8). All of the interviewees refer to the Malaysian entrepreneurial ecosystem as a developing one, and in the same time, they state, it is ‘open’ and ‘smooth’, as the government is putting more effort into establishing new incubators. Almost all public and private sector universities are also introducing and encouraging entrepreneurship in the campus and there are more venture capitalists with fortune looking to invest in the business. There are also many agencies either governmental based or public, focusing on entrepreneurial development. The verdict of the interviewees could be separated into two groups: according to the minority, support and entrepreneurial developmental mentoring lacks, as well as support and guidance incubators are ran by professionals and not by entrepreneurs with own experiences (1). However, entrepreneurship is taught at the universities, but the problem is again, that the courses are presented by non-entrepreneurial academics. On the other hand, entrepreneurs judge, that not all of the mentoring processes are about mentoring, there are usually more likely direct teaching or advising (2). The results of the latter are probably better, but entrepreneurs do not contract for this kind of activity. The Malaysian entrepreneurial ecosystem is in the opinion of the interviewees an effectively and efficiently working system, as there is a good infrastructure in the developmental areas, as well as the open policy of the government and private sector is also given. However, intervention points could be named: as it is quite fragmented and there are lots of different support organizations in both the public and the private sector, coordination is unavoidable (1). There are also overlapping in similar developmental activities (2), as one of the interviewees mentioned. He participated in two different programs with two differently named activities, the significant part of the trainings was similar. Co-working places are also playing an important role within the ecosystem, as there are widely used. According to one subject, there are useful for young entrepreneurs, as on the one hand it is a cheap solution to create working circumstances, but on the other hand – and it is the main added value – entrepreneurs could meet other actor in and outside of the industry. There is, of course competitiveness among them, as Porter stated, but on the other side, it is

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a supportive, creative and innovative surrounding. An other interviewee mentioned, that co-working places are good because people could learn from someone else experiences. The same subject pointed out, that the number of the available co-working offices is still not satisfactory. He also thinks, that someone seeking for a co-working place, should look after the interest of already presented start-ups and make sure intellectual property of business is protected, and it is also an opinion to find a place, where enterprises are rather diverse, than working in the same industry. At this point, the opinions imping. According to the author, both diverse and homogeny co-working places have advantages and disadvantages, it is depending on the start-up, which one fits better. The third, mentioned opinion was, that it became a trend nowadays to work in a co-working place, but sometimes it is necessary to have own focused time and space for individual work. If there should be mentioned a metaphor, according to a male developer, co-working places are growing as mushrooms around the country. The surrounding – as governmental, institutional, legal and economical – system was judge congruent supportive. On the one hand government is terms of facilities and support was mentioned in a positive meaning, but not really in financial. On the other hand, private initiatives were judged as supportive and successful. According to subject of the third interview – a male entrepreneur with Chinese origin –, surrounding in Malaysian context is supportive and positive, but maybe not equal, more supportive to people of one community than other. Potential entrepreneurs could develop in different ways. They can either participate in incubator or accelerator programs, where co-working facilities are offered, or they can work for they own and applying for mentor help or for coaching. Majority of the accelerators and incubators are technology based: Technology Park Malaysia, SME Technopreneurship Center or Innovation and Commercialization Center in UTM, MAD Incubators and MaGic are the most well-known proposals, but the list is almost endless. Most of them are free e.g. MaGIC, ICC, TPM, but others do offer support in exchange of equity e.g. MAD incubators or 1337 accelerator. According to a female mentor, there is a duplicity: one part of the programs is free, but there are either available in a limited capacity (1), or the applicant should be already graduated (2). Sometimes the latter one causes problems. According to her, it is necessary to figure out a solution, which will involve undergraduate students too. (However undergraduate students are not named as typical entrepreneurs.) A male economist, entrepreneur and researcher pointed out, that a person working in an own enterprise should develop. Not only the personal development, but the development of the product/service and the business itself is required. So, programs that includes getting to know ourselves, how to select other individuals to be team members or co-workers, idea generation and evaluations, prototyping and testing (GOOTB), Hackathon style, and pitching to get funding and/or business partners should be developed. Programs such as Wealth Creation Lab (WCL) by UTMTEC, UTM – 3 days, 2 nights intensive free programs – are useful in this meaning. As the research topic of the author is entrepreneurial development, with a focus on mentoring, interviewees were asked about the nature of mentoring processes. Answers could be divided into tow parts: on part said, that mentors are not needed, as people knows better their business than someone outsider. (As the researcher of the topic, should be pointed out, that the definition of mentoring is probably not accurate in this meaning, as business

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knowledge an experience is required, but the previous should be a general managerial attainment, while the latter should cover the meaning of ‘achievement’. With the above mention interviewee to share the point of views was rather complicated, she rather referred to advising, when answering the question.) There was an other interviewee, who mentioned, that however they are mentors, but mentors may not be related to what they are doing and may just be providing generic support, therefore not sure it is worth to take part in this kind of processes, but as they have network to related startups and experts, it could bring advantages. Other group of interviewees declared, that mentoring in quite common and since most Malaysian entrepreneurs are not hesitating to seek for advice, development from more experienced people, it is blooming (2). Consonant ascertainment is, that for role modelling, facilitating long term learning and personal development, this is the best solution. But – as two of the interviewees pointed out – mentoring system, as well as the supporting system itself – need time to mature. Further research options As a summary, it could be stated, that Malaysia is doing well in entrepreneurship, and what is more important, that it is continuously developing. One month to get familiar with Malaysia itself and its entrepreneurial ecosystem, there is simply not enough. The above mentions are scratching the surface, useful to get the first ideas of a prospering economy of the South-East, but further research topics should be mentioned: the governmental supporting system is exemplary; the entrepreneurial ecosystem is motivating (1). Delegation from over the world arrive to Kuala Lumpur to get to know supporting infrastructure, mindset and entrepreneurial development programs of private and governmental initiatives, as Malaysian Global Innovation and Creativity Centre (MAGIC), the operator of the first cyber city of Malaysia (Cyberview Sdn Bhd) and Multimedia Development Corporation (MDeC), responsible for Digital Malaysia Program. One possible expansion of this study could be named in this field: the detailed analyses of the above mentioned initiatives could serve as a benchmark. As it was also figured out, there are different initiatives: entrepreneurial education is also involved into this circle. In case of mentioning the work of the author – the learning-by-doing based, Finnish entrepreneurial educational model, the Team Academy – interviewees stated congruently, that this kind of initiative could also work in Malaysia. Therefor, other possibility of further expansion of the study could be the detailed analyses of entrepreneurial education (2). As a researcher of the topic of entrepreneurial mentoring, according to the author, mentoring processes differ in certain points from Western practices. The mindset of entrepreneurial mentors is also different from home experiences, model used are deriving from different schools and multiculturalism effects positively the process because of the diversity (3). Last, but not et least, however there are initiatives – for example the bilateral cooperation between KIFÜ (Hungarian Governmental Information Technology Development Agency) and MDeC, which started during the author’s visit – possible, further cooperation options, not only governmental, but also educational level, could be mapped (4).

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INFRASTRUCTURE-POWER-AND-COMMUNICATIONS.html#ixzz4kLYeQttH

One World – Nations Online Dictionary’s homepage

http://www.nationsonline.org/oneworld/malaysia.htm;

Date of download: 22.04.2017.

Open Signal Survey 2016

https://opensignal.com/reports/2016/03/malaysia/state-of-the-mobile-network

Date of download: 12.05.2017

Ortechnologies

http://www.ortechnologies.net/blog/posts/rainfall-in-malaysia-2008-2015/

Date of download: 17.05.2017

The Eleventh Malaysia Plan – Chapter of ‘Strengthening macroeconomic resilience for

sustained growth’

http://www.epu.gov.my/sites/default/files/Chapter%202.pdf

Date of download: 12.06.2017

Cited in text as www.epu.gov.my/a.

The Eleventh Malaysia Plan – chapter of ‘Strengthening infrastructure to support economic

expansion’

http://www.epu.gov.my/sites/default/files/Chapter%207.pdf

Date of download: 12.06.2017

Cited in text as www.epu.gov.my/b.

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The Eleventh Malaysia Plan – Chapter of ‘Pursuing green growth for sustainability and

resilience’

http://www.epu.gov.my/sites/default/files/Chapter%206.pdf

Date of download: 12.06.2017

Cited in text as www.epu.gov.my/c.

The Global Economy Monitor - http://www.theglobaleconomy.com, Date of download:

12.06.2017

http://www.theglobaleconomy.com/Malaysia/Economic_growth/; Cited in the text as

www.theglobaleconomy.com/a)

http://www.theglobaleconomy.com/Malaysia/; Cited in the text as

www.theglobaleconomy.com/b)

http://www.theglobaleconomy.com/Malaysia/human_development/ Cited in the text

as www.theglobaleconomy.com/c)

http://www.theglobaleconomy.com/Malaysia/labor_force/ Cited in the text as

www.theglobaleconomy.com/d

http://www.theglobaleconomy.com/Malaysia/Labor_force_participation/ Cited in

the text as www.theglobaleconomy.com/e

http://www.theglobaleconomy.com/rankings/Cost_of_starting_business/ Cited in the

text as www.theglobaleconomy.com/f

http://www.theglobaleconomy.com/Malaysia/wb_political_stability/ Cited in the text

as www.theglobaleconomy.com/g

http://www.theglobaleconomy.com/Malaysia/wb_ruleoflaw/ Cited in the text as

www.theglobaleconomy.com/h

http://www.theglobaleconomy.com/Malaysia/wb_government_effectiveness/ Cited

in the text as www.theglobaleconomy.com/i

http://www.theglobaleconomy.com/Malaysia/wb_regulatory_quality/ Cited in the

text as www.theglobaleconomy.com/j

http://www.theglobaleconomy.com/Malaysia/corporate_tax_rate/ Cited in the text

as www.theglobaleconomy.com/k

http://www.theglobaleconomy.com/Malaysia/personal_income_tax_rate/ Cited in

the text as www.theglobaleconomy.com/l

http://www.theglobaleconomy.com/Malaysia/Commercial_tax_rate/ Cited in the text

as www.theglobaleconomy.com/m

http://www.theglobaleconomy.com/Malaysia/Number_of_taxes/ Cited in the text as

www.theglobaleconomy.com/n

The Guardian online:

https://www.theguardian.com/global-development/2013/jun/27/malaysia-

technology-high-income-status-2020

Date of download: 08.06.2017

Transparency International – The Global Coalition Against Corruption’s homepage https://www.transparency.org/news/feature/corruption_perceptions_index_2016

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Date of download: 20.06.2017

World Bank’s homepage

http://data.worldbank.org/indicator/GB.XPD.RSDV.GD.ZS

Date of download: 22.04.2017.

World Finance Online

https://www.worldfinance.com/wealth-management/real-estate/living-in-cyberjaya-

the-silicon-valley-of-malaysia

Date of download: 18.06.2017

World Health Rankings’s homepage

http://www.worldlifeexpectancy.com/malaysia-life-expectancy

Date of download: 22.05.2017.

World Wide Found for Nature Malaysia homepage

http://www.wwf.org.my/about_wwf/what_we_do/forests_main/

Date of download: 14.06.2017

Appendix Questions and guide to semi-structured interviews Block A: General view of entrepreneurship is Malaysia

What do you think about Malaysian entrepreneurial life? Is it vivid or moderate? What are the reasons for that?

How is the general entrepreneurial willingness?

Why people would like/do not want to undertake a business?

Who is a typical entrepreneur is Malaysia?

What start-up means in Malaysia?

What about financial issues? Are government founds available

As Malaysia is a highly multicultural country, please explain your point of view, what do you think! Does culture/religion/origin have an effect on entrepreneurial attitude? How?

Block B - Questions concerning the ecosystem

What do you think generally about the Malaysian entrepreneurial ecosystem?

Is it working effectively and efficiently? What are the reason for it?

What is your mind about the co-working places?

Is the surrounding (government, institutional background) supportive? Why? Block C – Developmental possibilities

How a potential entrepreneur could develop? What kind of incubator/accelerator programs are available?

Are these programs free?

How there are running?

What kind of experiences do you have concerning them? Block D – Mentoring

What do you think, is it common, that a Malaysian entrepreneur has a mentor?

In what field and how a mentor could help an entrepreneur?

What are your expectations towards a mentor? (If you are a mentor, for what do you take care, if you are an entrepreneur, what do you expect from the mentor?)

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What are your expectations towards a mentee? (If you are a mentor, what kind of people you would like to work together, if you are an entrepreneur, what kind of characteristics/attitudes should you bear to be successful?)

How a usual mentoring process looks like according your point of view? Block E – Main barriers and accelerators

Please name 3-5 barriers, blockages, which are pulling back the entrepreneurship in Malaysia?

Please name 3-5 accelerators, which are boosting entrepreneurship in Malaysia? Other notes

Please submit your other notes here concerning the topic!

If you would like to get some feedback after the research, please let me know here!