Ungku Aziz Centre for Development Studies, Universiti Malaya is pleased to invite you to
UAC Research Pillar 2 – Poverty & Sustainable Development
Social Entrepreneurship in Malaysia
8th October 2020 (Thursday)
10.00 am - 11.30 am
ABSTRACT: Social enterprises are considered to be at the heart of inclusive growth due to their emphasis on people and social cohesion that help effect social and economic transformation. Malaysia’s New Economic Model (NEM) set out high income, sustainability and inclusiveness, as the foundation for transformation towards an advanced nation by 2020. In the Tenth Malaysia Plan (2011-2015), 2 out of 10 objectives are on achieving inclusive growth. The Malaysian Global Innovation & Creativity Centre (MaGIC) came up with a blueprint for developing the social enterprise sector in 2015. Yet, until now, there is no formal recognition of this sector. In this context, this study explores the eco-system for social enterprises in Malaysia, raising the following research questions: 1. What are the attributes (features) and roles of business incubators and intermediaries operating in the social enterprise sector in Malaysia; 2. What are the major characteristics of social enterprises in Malaysia? 3. How do the key domains of entrepreneurship ecosystem (market, finance, human capital, culture, support, policy) shape the social entrepreneurship in Malaysia? 4. What are the major challenges faced by the social enterprises and the factors contributing to sustainability of social enterprises in Malaysia? The study employs qualitative (interpretative) research approach and semi-structured interview research method, and primary data gathered from 6 business incubators and intermediaries and 20 social enterprises in four regional clusters (Klang Valley, Penang, Sabah and Sarawak). The study found that the current social enterprise ecosystem is weak and still emerging and yet to take a concrete shape. The absence of legal status for social enterprise is the single most important obstacle in unlocking the potential growth of social enterprises. Most social enterprises operate as hybrid organizations (as private limited company and society) to overcome the lack of legal recognition. They mainly operate in niche or exclusive market. Initially, personal investment is the main financial source. Other financing sources include seed funding (from accelerators or incubators), business angels, and grants from private foundations, venture capital, and corporate sponsorship. Except well-established social enterprises that employ permanent staff, others mainly use volunteers on ad-hoc basis from the beneficiary communities, universities, NGOs, and foreign countries. Business management skills and ability to access market are the most critical factors for sustainability. Malaysian social enterprises face different challenges and sustainable needs, depending on the markets they serve and sectors they operate, and the professional backgrounds of their founders. Social entrepreneurship can play a significant role in reducing poverty and inequality between both the rural and urban communities in Malaysia. The study concludes that there is an urgent need for legal recognition of the social enterprise by the government to facilitate greater participation of both public and private sectors.
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