*RELATIONSHIPS OF UNIVERSITY EDUCATION AND
ENTREPRENEURIAL CAREER PATHS OF GRADUATE
ENTREPRENEURS
Nor Aishah Buang
Universiti Kebangsaan Malaysia
Saniah Hassan
Ministry of Education
ABSTRACT
The purpose of this study is to explore the link between university education and the
entrepreneurial paths of graduate entrepreneurs who were graduated from local and
overseas higher learning institutions from1988 to 2003. In addition, is to look into the
extent of the internal and external factors that influence the paths to choose
entrepreneurship career. The entrepreneurial career paths were being analyzed based on
the graduate entrepreneurs’ career changing phases starting from early career intention to
business start up. Those paths were categorized in four different paths such as accidental,
methodical, intuitive and incremental paths. University learning experiences related to
those paths were field of studies and the background of higher learning institutions in
terms of related entrepreneurship curriculum also being implemented. The findings
revealed that accidental path was the most common entrepreneurial career path, followed
by methodical, intuitive and incremental paths. There was a significant difference in early
entrepreneurial initiatives with reference to the different entrepreneurial career paths and
the field of studies. However, there was no significant difference in early entrepreneurial
initiatives with reference to the background of higher learning institutions.
1
INTRODUCTION
The issue of unemployment among graduates was being discussed for decades. It was
reported that about 80,000 graduates were unemployed (Human Resource Ministry
2004). However the figure had been denied by Minister of Higher Education, YB Dato’
Dr Shafie Salleh who claimed only 18,000 graduates were unemployed. Even though the
figure was arguable, the issue should be dealt with diligently by all parties concerned.
Moreover, the number of unemployed graduates would be increasing since about 50,000
graduates from local and overseas higher learning institutions were expected to enter the
Malaysian job market annually (National Economic Action Council 2003). The
statistical report (TABLE 1) proved to us the existence of the problem, and a total
number of 69,892 (18.9%) graduates were registered unemployed in 2003.
TABLE 1 Distribution of Unemployment According to The Level of Education
and Sex 2003
Level of Education
Non-formal
Primary
Secondary
Tertiary
Total
Male(%)
9,196(3.9)
33,719(14.3)
157,279(66.7)
35,606(15.1)
235,800(100.0)
Female(%)
4154(3.1)
11,926(8.9)
83,482(62.3)
34,304(25.6)
134,000(100.0)
Total(%)
13,313(3.6)
45,855(12.4)
240,740(65.1)
69,892(18.9)
369,800(100.0)
Source: Buletin of Social Statistics, Departmant of Statistic, Malaysia 2004
The statistics in TABLE 1 had clearly revealed the phenomena. Thus, Datuk Khalid
Yunus who was the then Deputy Minister of Entrepreneurs Development called upon
graduates to opt for entrepreneurship career instead of waiting to be employed. He
advised the graduates to take advantage of the Graduate Entrepreneurs Scheme (SUS)
which was established in 1998. To-date, only 3683 graduates had attended the course, of
which only 348 applied for financing facilities from The Graduates Entrepreneurs Fund
(Annual Report Ministry of Entrepreneurs Development 2003). The statistic proved that
the number of graduates entrepreneurs who attended and took advantage of the facilities
provided by the government was very small.
Therefore, it is pertinent to find out how graduate entrepreneurs started their
businesses which lead to some questions such as 1) What were their career-changing
phases starting from early career intention up to business start-up?, 2) Which was the
most
common entrepreneurial
career
path?.
Ronstadt (1982) and
Bird (1989) found that it was imperative to explore the entrepreneurial career paths of
graduate entrepreneurs. The results of the study will be of great perusals for all parties
concerned especially educationists and policy makers.
2
RESEARCH OBJECTIVES
The study explored graduates entrepreneurial career paths who graduated from local and
overseas higher learning institutions between 1988 to 2003. The objectives of the study:
1.
To identify graduates entrepreneurs’ profile
2.
To identify graduates career-changing phases starting from early career intention
up to business start-up.
3.
To identify the entrepreneurial career paths taken by graduates such as
Incremental Path, Intuitive Path, Methodical Path and Accidental Path.
4.
To identify the entrepreneurial career paths taken by graduates based on the level
of education, the field of studies (program) and the background of higher learning
institutions.
METHODOLOGY
Almost 400 graduate entrepreneurs were selected randomly from the Malaysian graduate
entrepreneurs’ population. Questionnaires were constructed by the researchers based on
the literature reviews and studies conducted before. The survey was carried out for five
months from 1st February 2005 to 28th July 2005. Descriptive analysis such as the
frequency and percentage were used to present entrepreneurs’ profile, career-changing
phases of the graduate entrepreneurs and types of entrepreneurial career paths.
FINDINGS
Graduates Entrepreneurs’ Profile
TABLE 2 demonstrated the distribution of respondents according to sex, age, race and
marital status. After screening process by taking into consideration certain criterion such
as age limit and level of education, 399 respondents were selected as sample of study.
Based on TABLE 2 the total respondents of graduate entrepreneurs comprised of 274
males (68.7%) and 125 females (31.3%). The findings were in line with those studies of
entrepreneurships in general conducted by Mohamed Amir Sharifudin (1983), Tan & Tay
(1996), Fleming (1996), Badrul Hisham (1995), Mergenhagen (1996) and Pasenan
(2003). Ronstadt (1982) had also found congruent findings on his study of Babson
College graduate entrepreneurs.
In term of age, a total of 169 graduate entrepreneurs aged between 30 to 39 years
old (42.4%), followed by a total of 136 graduate entrepreneurs aged between 40 to 45
years old (34.1%) and finally 94 graduate entrepreneurs (23.6%) aged 29 years old and
below. Thus, the result of the study was almost similar to that of Ronstadt (1984) where
most of the entrepreneurs aged between 22 to 55 years old. It is best noted that in this
study the researchers had set the age limit of the graduate entrepreneurs be 45 years old.
The results obtained proved that the respondents’ range of age was similar. The above
3
statistics also showed the highest percentage in term of respondents’ age was in the range
of 30 to 39 years old. These findings were in congruent with that of Mohd. Zabid’s
(1996) and Tan & Tay’s (1992).
The study had also revealed the respondents consisted of Malay (80.7%), Chinese
(12.0%), Indian (4.3%) and others (3.0%). While the respondents in the study conducted
by Teo (1996) among the women entrepreneurs in Singapore consisted of Chinese 85.0%,
Indian 10.0%, Malay 3.0% and 2.0% of others. Whereas, the respondents involved in the
study conducted by Mohd. Zabid (1996) were successful women entrepreneurs in
Malaysia that consisted of Malay (59.5%), Chinese (28.4%), Indian (8.15) and 4.1% of
other races.
Next TABLE 2 demonstrated the marital status of graduate entrepreneurs. A total
of 308 (77.2%) graduate entrepreneurs were married while the remaining 91 (22.8%)
were singles. This finding was in congruent with that of entrepreneurial studies
conducted generally in other countries such as Fleming (1996) in Ireland, Hisrich &
Peters (1992) in The United State of America and Tan & Tay (1996) in Singapore. This
happened most probably due to emotion and stable economic factors. Moreover marital
ties were considered as the key of strong collaboration and cooperation for starting and
developing business.
TABLE 2 Profile of Respondents
Frequency
1.
2.
3.
4.
%
Sex
Male
Female
274
125
68.7
31.3
Age
Less than 30 years old
30-39 years old
40-45 years old
94
169
136
23.6
42.4
34.1
Race
Malay
Chinese
Indian
Other races
322
48
17
12
80.7
12.0
4.3
3.0
Marital Status
Married
Single
308
91
77.2
22.8
Meanwhile TABLE 3 demonstrated the field of studies during secondary school.
A total of 174 (43.6%) graduate entrepreneurs were of pure science background, 92
(23.1%) were of social science background and 89 (22.3%) were of commerce/
4
economics/accounting background. The other 44(11.0%) were technics & vocational
background. The tertiary education of graduate entrepreneurs was also shown in TABLE
3. A total of 241 (60.4%) graduate entrepreneurs were first degree holders, 103 (25.8%)
were diploma holders and the remaining 55 (13.8%) with masters degree and doctorates.
While based on the field of studies (program) during at higher learning institutions, there
were 158 (39.6%) graduate entrepreneurs with business/economics/accountancy
background, 122 (30.6%) with social sciences background and 119 (29.8%) with science
and engineering background. Table 1 also displayed a total of 227 (56.9%) graduate
entrepreneurs were graduated locally and the remaining 172 (43.1%)) were overseas
graduates.
1.
2.
5.
6.
TABLE 3 Academic Profile of Respondents
Frequency
Secondary School Stream
Pure Science
174
Technical & Vocational
44
Commerce/Econ./Acctg.
89
Social Science
92
43.6
11.0
22.3
23.1
Level of Education
Diploma
Bachelor
Post Graduates
103
241
55
25.8
60.4
13.8
Field of Studies (progamme)
Business/Econ./Acctg.
Science & Engineering
Social Science
158
119
122
39.6
29.8
30.6
Background of Higher Learning Inst.
Local
Overseas
227
172
56.9
43.1
%
TABLE 4 displayed the career goal changing phases of graduate entrepreneurs.
During the pre-school phase, 40 (10.0%) of graduate entrepreneurs intended to be
entrepreneurs, followed by 76 (19.0%) to be doctors, 40 (10.0%) to be engineers, 26
(6.5%) to be lawyers, 109 (27.3%) to be lecturers or teachers, 24 (6.0%) to be managers,
20 (5.0%) to be accountants and the other 64 (16.0%) to be in the security professions
such as police or military forces. TABLE 4 also displayed the initial career goals of
graduate entrepreneurs at school: 52 (13.0%) of them intended to be entrepreneurs, 62
(15.5%) to be doctors, 53 (13.3%) to be engineers, 29 (7.3%) to be lawyers, 81 (20.3%)
to be lecturers or teachers, 32 (8.0%) to be managers, 44 (11.0%) to be accountants and
the other 46 (11.5%) to be pharmacists or in police or military forces.
5
Career Goal Changing Phases
TABLE 4 Career Goal Changing Phases
1.Initial Career Goal
Inst.
Entrepreneurs
Doctor
Engineer
Lawyer
Lecturer/Teacher
Manager
Accountant
Others
2. Prior Job Status
Doctor
Engineer
Lawyer
Lecturer/Teacher
Manager
Accountant
Others
3.Thought of
During School
Starting Studies
During Studies
After graduated
Working
4. Decision making
During School
Starting Studies
During Studies
After graduated
Working
Pre School
40(10.0)
76(19.0)
40(10.0)
26(6.5)
109(27.3)
24(6.0)
20(5.0)
64(16.0)
School
52(13.0)
62(15.5)
53(13.3)
29(7.3)
81(20.3)
32(8.0)
44(11.0)
46(11.5)
Working
Goverment
Private
15
3
12
28
8
38
24
10
71
4
16
14
80
93
230
Higher Learning
133(33.3)
26(6.5)
44(11.0)
14(3.5)
60(15.0)
56(14.0)
35(8.8)
31(7.8)
No Working Exp.
76
76
Frequency
51
23
53
55
217
399
%
12.8
5.8
13.3
13.8
54.4
100.0
35
17
53
48
246
399
8.8
4.3
13.2
12.0
61.7
100.0
5. Triggered Events
6
Business opportunities
Reading entrepreneurs’success
Meet Friends
Retrenched
Others
174
90
53
7
75
399
43.6
22.6
13.3
1.7
18.8
100.0
Next, based on TABLE 4 the initial career goals of graduate entrepreneurs during
the higher learning institutions phase: 133 (33.3%) of them intended to be entrepreneurs,
26 (6.5%) to be doctors, 44 (11.0%) to be engineers, 14 (3.5%) to be lawyers, 60 (15.0%)
to be lecturers or teachers, 56 (14.0%) to be managers, 35 (8.8%) to be accountants, and
the other 31 (7.8%) to be pharmacists, scientists, police or military forces. It was obvious
that the initial career goals of graduate entrepreneurs had changed where the percentage
to be entrepreneurs increased gradually from pre-school phase (10.0%) to 13.0% during
school phase and 33.3% during their study at higher learning institutions. According to
Crites (1969) the changes in initial career goals were normal. The changes might be due
to the environmental factors or personal factors such as opportunities, economics and
better academic qualification.
Beside that TABLE 4 also displayed majority (80.9%) of graduate entrepreneurs
gained experience while working at government or private sectors before venturing into
business. While the remaining 76 (19.1%) ventured into business after graduated. Based
on the table too, 18 (4.5%) gained experiences as doctors, 40 (10.0%) as engineers, 8
(2.0%) as lawyers, 62 (15.5%) as lecturers or teachers, 81 (20.3%) as managers, 20
(5.0%) as accountants and the remaining 94 (23.6%) as pharmacists, programmers,
optometrists, surveyors, pilots and architects. According to Bird (1989) working
experience was an advantage for entrepreneurs since this could uplift their credibility,
performance and motivation to venture into businesses. Even Kantis et.al (2002) found
that working experience was the main source (82.0%) of new business opportunities.
Majority of graduate entrepreneurs had first thought of venturing into
entrepreneurial career while working (after graduated). In this case, a total of 217
(54.4%) of graduate entrepreneurs had first thought of venturing into business while
working, followed by 55 (13.8%) upon graduated, 53 (13.2%) while in higher
institutions, 51 (12.8%) while at school and the other 23 (5.8%) when commencing their
studies at higher learnings institutions.
TABLE 4 also displayed at which stage graduate entrepreneurs decided to venture
into business. Majority (61.7%) of them were found to have decided while working after
graduated, followed by 53 (13.2%) while studying, 48 (12.0%) upon graduation and 35
(8.8%) while in school. While the other 17 (4.3%) decided to venture into business when
commencing their studies at higher learning institutions.
7
TABLE 4 also displayed the triggered events that had caused graduate
entrepreneurs to decide venturing into business. A total of 174 (43.6%) of them decided
after securing business opportunities, followed by 90 (22.6%) after knowing the success
of the earlier entrepreneurs, 75 (18.8%) due to other incidences e.g. quit jobs due to
dissatisfaction or personal problems, poverty, etc., 53 (13.3%) after meeting friends, and
the other 7 (1.8%) after being retrenched. These findings were similar to that of
Cunningham (1996) where he did also find that securing opportunities was an important
incidence which had caused someone to venture into business. According to Bird (1989)
securing business opportunities and displacement were the triggering events that make
someone to venture into business. Kantis et al. (2002) also found the same findings.
Entrepreneurial Career Paths
TABLE 5 Entrepreneurial Career Paths
Entrepreneurial Career Paths
During studies(Incremental Path)
After graduated(Intutive Path)
Worked & Prepared for (Methodical Path)
Worked & Opportunities (Accidental Path)
Frequency
%
36
40
149
174
399
9.0
10.0
37.3
43.6
100.0
Based on TABLE 5, it was found that most of graduate entrepreneurs (43.6%) undertook
the Accidental Path, meaning that after graduated they worked for others and ventured
into entrepreneurial career accidentally (without prior planning and intention) after
securing business opportunities. While the Methodical Path was the second highest
percentage where a total of 149 (37.3%) graduate entrepreneurs chose to work for others
and made necessary preparations before venturing into business. This was followed by
the Intuitive Path where 40 (10.0%) of them ventured into business immediately after
they graduated. Finally, only 36 (9.0%) of the graduate entrepreneurs chose to undertake
the Incremental Path where they started venturing into business as part time during
studies at higher learning institutions. This finding was quite in congruent with that of
Ronstadt (1982) who found that 55.0% ventured into business after woking with others
without prior planning, another 21.0% worked for others while making necessary
preparations and the other 20.0% ventured into business immediately after graduated fom
Babson College. This would mean that most of graduate entrepreneurs (80.6%)
undertook the Accidental and Methodibal Paths to start their businesses.
TABLE 6 Entrepreneurial Career Paths According to The Level of Education
Entrepreneurial Career Paths
Level of Education
Frequency(%)
Diploma
Bachelor
Post Graduates
8
Incremental Path
Intuitive Path
Mehodical Path
Accidental Path
8
9
36
50
103
24
25
91
101
241
4
6
22
23
55
36(9.0)
40(10.0)
149(37.3)
174(43.6)
399(100.0)
TABLE 6 showed their level of education according to the type of entrepreneurial
career paths. Based on the table, 50 (28.7%) of graduate entrepreneurs who undertook
the Accidental Path were diploma holders, while 101 (58.0%) were first degree holders
and the other 23 (13.2%) were post-graduates degree holders. Next, those who undertook
the Methodical Path, 36 (24.2%) were diploma holders, 91 (61.1%) were first degree
holders and the other 22 (14.8%) were post-graduates degree holders. Meanwhile, out of
those who undertook the Intuitive Path, 9 (22.5%) were diploma holders, 25 (62.5%)
were first degree holders, and the other 6 (15.0%) were post-graduates degree holders.
Finally, out of those who undertook the Incremental Path, only 8 (22.2%) were diploma
holders, 24 (66.7%) were first degree holders, and the other 4 (11.1%) were postgraduates degree holders. Although the samples of this study focussed on the graduate
entrepreneurs who held the diploma and above, while that of Ronstadt (1982) covered
those of certificates up to MBA holders, yet there were similarities in choosing the path
according to the level of education.
TABLE 7 Entrepreneurial Career Paths According to the Background of Higher Learning
Institutions
Entrepreneurial Career Paths
Frequency(%)
Incremental Path
Intuitive Path
Methodical Path
Accidental Path
Higher Learning Institutions
Local
Overseas
23
27
81
96
227
13
13
68
78
172
36(9.0)
40(10.0)
149(37.3)
174(43.6)
399(100.0)
TABLE 7 displayed the statistics of the entrepreneurial career paths according to
the background of higher learning institutions. A total of 96 (42.3%) graduate
entrepreneurs ventured into business accidentally, 81 (35.7%) methodically, 27 (11.9%)
intuitively and the remaining 23 (10.1%) incrementally. While those of overseas
graduated entrepreneurs, 78 (45.3%) ventured accidentally, followed by 68 (39.5%)
methodically and 13 (7.6%) intuitively and incrementally.
9
TABLE 8 Entrepreneurial Career Paths According to The Field of Studies
Entrepreneurial Career Paths
Field of Studies
Frequency(%)
Business/
Science
Social
Econ./
&
Science
Acctg.
Engineering
Incremental Path
18
7
11
36(9.0)
Intuitive Path
20
6
14
40(10.0)
Methodical Path
52
48
49
149(37.3)
Accidental Path
68
58
48
174(43.6)
158
119
122
399(100.0)
Finally, based on TABLE 8 it was found that 68 (43.0%) of graduate entrepreneurs with
business/economics/accounting background ventured into business accidentally, while 52
(32.9%) of them ventured methodically, 20 (12.7%) intuitively and the other 18 (11.4%)
incrementally. For the graduate entrepreneurs with science & engineering background, 58
(48.7%) ventured accidentally, 48 (40.3%) methodically, 7 (5.9%) incrementally, and the
other 6 (5.1%) intuitively. Meanwhile, those graduate entrepreneurs with social science
background, 49 (40.2%) ventured methodically, 48 (39.3%) accidentally, 14 (11.5%)
intuitively, and the other 11 (9.0%) incrementally.
CONCLUSION
Entrepreneurship not only mobilizes personal improvemnent but could also act as a
catalyst for socio-economics development of the nation through the growth in
employment opportunities and production of quality services and products. In the era of
globalization and liberalization, the demand for creative, innovative and competitive
entrepreneurs is ever increasing. Most of the graduate entrepreneurs had worked for
others before venturing into businesses either methodically or accidentally. While those
who ventured during their studies (incrementally) and immediately after they graduated
(intuitively) constituted a very small percentage. The findings also revealed that the
graduates entrepreneurs preferred to undertake the Accidental and Methodical Paths
regardless of their educational background either diploma, first degree or post-graduates
degrees. Beside that, by looking of each path, the percentage of graduate entrepreneurs
who held first degree was the highest. While both overseas and local graduate
entrepreneurs had undertaken almost similar entrepreneurial career path. The Accidental
and Methodical Paths were their preferences regardless their field of studies (program)
background.
Obviously, their field of studies (program) while they were studying at the higher
learning institutions to a certain extent influenced them to choose entrepreneurial career.
The percentage of graduate entrepreneurs with business/economics/accounting
background was the highest to choose entrepreneurial career compared to those from
10
other fields. Education level had changed their perceptions towards entrepreneurial
career. In this study, higher/tertiary education had contributed to the changing perception
level. The graduate entrepreneurs are hoped to play a greater role in improving the socioeconomics pattern. Furthermore, the various disciplines of knowledge gained during their
studies theoretically and practically were very useful if they are channelled into
entrepreneurships accordingly. Thus, necessary incentives should be provided to the
graduates who had the potential to succeed as entrepreneurs in the future. The nation
should learn from the previous failure of the New Economics Policy (DEB). At the end of
DEB in 1990, the pre-set target was only 60.0% achieved. A holistic approach is needed
to make them aware not only the monetary benefits but sense of challenge and
independence. Subsequently, the scrolls should not be treated as a passport to secure
employment only but as a stepping stone to venture into business or create own
employment.
REFERENCES
Badrul Hisham Hj. Alang Osman. 1995. Pengaruh pendidikan formal dan non-formal
terhadap prestasi usahawan. Tesis Sarjana Pendidikan. Fakulti Pendidikan,
Universiti Kebangsaan Malaysia.
Bird, B.J. 1989. Entrepreneurial behaviour. Illinois: Scott, Foresman and Company.
Crites, J.O. 1969. Vocational psychology. New York: McGraw- Hill.
Cunningham, J.B. 1996. Entrepreneurship skills. In Low Aik Meng & Tan Wee Liang.
Entrepreneurs, entrepreneurship and enterprising culture, pg. 57-81. Singapore:
Addison-Wesley Publishing Company.
Cunningham, J.B. 1996. Getting started and responding to crisis. In Low Aik Meng &
Tan Wee Liang. Entrepreneurs, entrepreneurship and enterprising culture, pg. 301329. Singapore: Addison-Wesley Publishing Company.
Departmant of Statistic, Malaysia 2004. Buletin of Social Statistics.
Fleming, P. 1996. Entrepreneurship education in Ireland : A longitudinal study. Academy
of entrepreneurship Journal, 2(1): 95-119.
Hisrich, R.D & Peters M.P. 1992. Entrepreneurship: Starting, developing and managing
a new enterprise. New York: Richard D. Irwin, Inc.
Human
Resource
Ministry.
Labour
Market.
http://www.mphr.gov.my/new/report.htm.9 (3 Mac 2005).
(on
line)
Kantis, H., Postigo, S., Federico, J. & Tamborini, M.F. 2002. The emergence of
university graduate entrepreneurs : What makes the difference? Emperical
11
evidences from a research in Argentina. (on line) http://www.ungs.edu.ar (31 0gos
2004).
Margenhagen, P. 1996. Her own boss. American Demographics, December: 36-41.
Ministry of Entrepreneurs Development 2003. Annual Report.
Mohamed Amir Sharifudin Hashim. 1983. Bumiputra entrepreneurship: A study of
MARA loanees in The Malaysian State of Kelantan. Tesis PHD. Massey
University, New Zealand.
Mohd. Zabid Abdul Rashid. 1996. Management practices, motivations and problems of
succesful Women Entrepreneurs in Malaysia. In Low Aik Meng & Tan Wee Liang.
Entrepreneurs, entrepreneurship and enterprising culture, pg. 290-297. Singapore:
Addison-Wesley Publishing Company.
National Economic Action Council 2003. Annual Report.
Pasenan, M. 2003. In search of factors affecting SME performance. The case of Eastern
Finland. Tesis Ph. D. Universiy of Kuopio. (on line) www.uku.fi/laitokset/yrit (20
Julai 2005).
Ronstadt, R.C. 1982. Frontiers of entrepreneurial research: Does entrepreneurial career
path really matter? Proceedings of The 1982 Conference on Entrepreneurship at
Babson College, pg. 540- 567. Seattle: University Of Washingston.
Ronstadt, R.C. 1984. Entrepreneurship text, cases and notes. Massachusetts: Lord
Publishing.
Tan, W.C.M. & Tay, R.S.T. 1996. Education and career choice of business students : An
empirical analysis. In Low Aik Meng & Tan Wee Liang. Entrepreneurs,
entrepreneurship and enterprising culture, pg. 290-297. Singapore: AddisonWesley Publishing Company.
Teo Sock Kim. 1996. Women entrepreneurs of Singapore. In Low Aik Meng & Tan Wee
Liang. Entrepreneurs, entrepreneurship and enterprising culture, pg. 284-289.
Singapore: Addison-Wesley Publishing Company.
12