National

Entrepreneurship
Framework
Strategic Thrusts & Objectives
KEMENTERIAN PEMBANGUNAN USAHAWAN
MINISTRY OF ENTREPRENEUR DEVELOPMENT
The Ministry of Entrepreneur Development (MED) was re-established on 2 July 2018 by the new Government
with the objectives of formulating an inclusive and competitive National Entrepreneurship Policy aims to
rationalize and refocus all functions and roles of entrepreneur development programmes in order to support the
nation’s economic agenda and create a conducive and integrated entrepreneurship ecosystem.

Since its establishment, work has gone into the preparation of a National Entrepreneurship Framework involving
various stakeholders and entrepreneurs through the Bumiputera Entrepreneur Congress which has been
organised by MED in the different states. In addition, inputs from the Entrepreneur Development Advisory
Council (EDAC) which comprises of experts in entrepreneurship from various industries have also been included.

The Framework consisted of 21 Strategic Objectives grouped into 4 Strategic Thrusts namely Accelerating
Economic Growth Through Innovation Driven Entrepreneurship, Comprehensive and Integrated Entrepreneurship
Development, Boosting Entrepreneurship Among B40 and Scaling-Up Entrepreneurs.
 STRATEGIC OBJECTIVE 1 : INCREASE SME CONTRIBUTION TO GDP
STRATEGIC OBJECTIVE 2 : INNOVATION DRIVEN ENTERPRISES
MED aims to strengthen the economic contribution of Small and Medium Enterprises (SMEs), which stood at 37.1% in
2017 of the country's Gross Domestic Product (GDP) to 41% by 2020.
MED aims to create and develop Innovation-Driven Entrepreneurs adopting the exponential entrepreneur framework;
Among MED’s focus would be as a facilitator to entrepreneurs and SMEs in establishing their business, ensure to achieve very high and fast growth, incorporating the latest exponential technological trends (Big Data, IoT and AI),
cooperation and strategic networking between the public and private sectors, as well as planning and psychological tools (innovative business models) and power of the crowd (crowdfunding, community building etc).
implementing activities to promote the entrepreneurial culture. This will help entrepreneurs and SMEs to ultimately
become homegrown champions in their respective sectors and be successful in both domestic and global markets.

MED will also look into new trends that will accelerate SME’s growth such as megatrends and Industrial
Revolution 4.0 (IR4.0). A two-pronged strategy needs to be undertaken for sustainable and inclusive development by:

High Growth and Innovative Firms Microenterprises (B40)

Ramping up creation of high growth and Increasing microenterprises (B40)

innovative firms by the creation of more contribution to the economy through
global SMEs through targeted assistance support for microenterprises and
in automation, digitalization and startups
robotization Technological Psychological Power of The
Trends Tools Crowd

The Government had also identified main subsectors that will further accelerate the economic growth namely the rail sector to the economic growth of the country.
industry, medical devices, aerospace, automotive, digital economy, biotechnology and renewable energy.
Manufacturers and service providers in these subsectors have bigger potential and capabilities to diversify their
products and services towards a more complex and higher value projects which in turn will generate a higher economic
return to the GDP.

In addition to this, MED will also look into enhancing the potential and business opportunities in creative industry such
as bamboo and wood carving that would create more job opportunities and eventually enhance the contribution of this
This must also be supported by a thriving ecosystem that provides access to finance which includes venture capitals,
angels, market access etc and a business environment that is collaborative which links to relevant industry
mentors, other enterprises, corporates and so on. With all this in place, an entrepreneur will be able to churn
new innovative products and services built on effective sustainable long-term business models.
STRATEGIC OBJECTIVE 3 : STRENGTHENING THE STARTUP ECOSYSTEM
TOWARDS FUTURE INDUSTRIES

Process of Ideation Establishing a National Open Innovation Platform

In order to ensure that Malaysia continuously grows the funnel of startups for In order to stimulate new type of Innovation Driven
future industries, MED will ensure that the process of ideation from startup to Opportunities for Startups, there is a need to establish a
scaleup is inclusive and accessible by ensuring enough touch-points for platform that allows for the challenges and issues of the
individuals to explore ideas. Government, corporates and SMEs to be exposed to startups.

Realizing that funding is an important element in the Startup Ecosystem, MED
will be driving the movement to attract more venture capital funding, impact
investments via incentives and schemes so that high performing startups will
be able to timely seize the opportunities and potentials, which MED hopes will
enable the discovery of another Unicorn in Malaysia.
Startups are known to be able to solve problems more
efficiently and effectively. The creation of such platform will
transform the country into a citizen of problem solvers and we
hope that this will in turn support the countries’ aspiration as
an Entrepreneurial Nation.

Creating an Innovation Supercluster for Future Industries

MED also plans to ensure that entrepreneurs/ startups dealing with Future Industries are given the
opportunity to flourish. In order to do this, Industries and Startups cannot work in silos. MED intends to
create an innovation supercluster of identified sectors of the future such as Mobility, Clean Energy, Smart
City, Healthcare and Agritech.

These Innovation Superclusters aims to bridge industry players and Startups/Entrepreneurs in driving new
innovations faster to the market. Superclusters are essentially micro-entrepreneurial ecosystems of the
identified industries.
STRATEGIC OBJECTIVE 4 : EASE OF ACCESS TO FUNDING
Economic and SME Census 2016 (reference 2015) shows that 73% of source of
financing for SMEs is from internally sourced fund. MED believes that the growth
1 of SMEs can be intensified if they take full advantage of the conducive financing
ecosystem for businesses in Malaysia. Access to financing remains a challenge
for certain categories of businesses due to lack of access to information,
stringent eligibility criteria and risk adverse attitude of financiers.
MED shall act as focal point for access to financing for entrepreneurs and SMEs
in an inclusive manner catering for among others, B40, youth, women
2 entrepreneurs, OKU, social entrepreneurs, co-operatives and startup businesses.
Coordinated effort shall be made to enhance access to information about
holistic financing ecosystem for different target groups and business lifecycles.
Access to finance shall also be facilitated by:
3 Provision of direct financing through MED and its agencies; and/or
Referral to other sources of financing across Ministries, Agencies and
private sectors
Awareness about the Government Guarantee Schemes shall also be
4 enhanced to assist businesses especially SMEs to gain access to financing
from the financial system.
STRATEGIC OBJECTIVE 5 : ALTERNATIVE SOURCE OF FINANCING
Advancement in technology and evolution of investment tools,
intermediaries and platforms have enhanced the alternative financing
sources for businesses. It enables greater participation and lower
investment threshold by investors.
MED shall facilitate and promote access to diversified financial landscape
to focus groups via alternative financing platforms such as crowdfunding,
Leading Entrepreneurs Accelerator Platform (LEAP) and ACE Market.
Together with Bursa Malaysia, MED and SME Corp will be organizing more
market awareness sessions beginning December 2018 onwards to
encourage more entrepreneurs to participate in listing their businesses on
Bursa Malaysia.
To ensure a vibrant alternative financing ecosystem, mobilization of
investment by public institutional funds (e.g.: EPF, KWAP and LTAT etc),
business angels, waqaf funds, venture capitals and private equity
companies shall be encouraged as their contribution to stimulate organic
growth of local SMEs. The investment can be done directly or through
licensed / registered intermediaries like the SME Investment Partners
(SIPs) where Government will also be co-investing.
Incentives may be considered for alternative financing players that support
certain entrepreneurs’ target group in order to accelerate growth.
Public-private smart partnership shall be intensified to fund specific
economic sectors to broaden the range of financing instruments available
to entrepreneurs and SMEs. Reliance on government funding and grants to
finance business needs shall be reduced over time.
STRATEGIC OBJECTIVE 6 : ENHANCING THE
ROLE AND
OUTCOMES OF
DFIs
Development Financial Institutions
(DFIs) in general take higher risk
profile customer than commercial
banks particularly SMEs that lacks the
necessary collateral and financial
track record. DFIs need to be
assessed differently than commercial
banks to undertake this responsibility
more effectively. According to the
2016 Economic Census, only 4.2% of
SMEs are funded by DFIs in Malaysia
as compared to 24.1% by commercial
banks.
MED in partnership with Bank Negara
Malaysia, will be focusing on enhancing
the role of DFIs such as TEKUN, Bank
Rakyat and SME Bank in providing the
necessary funding support to local
SMEs while at the same time ensuring
the continued sustainability and fiscal
accountability of DFIs.
STRATEGIC OBJECTIVE 7 : TO DEVELOP AN
INTEGRATED
ENTREPRENEURSHIP
AND SME DATABASE
MED will be developing an
Integrated Entrepreneurship and
SME Database which consists of data
from various entrepreneurship
development organizations and Strategic
agencies to assist in the national
Comprehensive and Integrated
entrepreneurship development
agenda. Currently, data on
entrepreneurs are collated by
Entrepreneurship Development Thrust 2
various Ministries and agencies,
some of which may be duplicating
and are not easily accessible by
stakeholders.
There is real need for the
Government to produce a centralized
database on the entrepreneurial
ecosystem which include the
number of entrepreneurs,
employment generated by
entrepreneurs and value creation of
entrepreneurship to the country.
 STRATEGIC OBJECTIVE 8 : STREAMLINE / RATIONALIZE ROLES AND STRATEGIC OBJECTIVE 9 : STREAMLINING ENTREPRENEURSHIP TRAINING
FUNCTIONS OF ALL EDOs
Despite various entrepreneurship training programmes being provided by Ministries and agencies,
many of them are duplicating and inconsistent with each other. In addition, complaints have been
received regarding the quality and outcomes of these programmes as compared to the costs
expended by the Government.

A National Entrepreneurship Training Council will be formed under MED to align and monitor all matters
pertaining to entrepreneurship training :

To develop a National Entrepreneurship Training Framework to ensure consistencies in all aspects of

entrepreneurship training. This Framework will be the source of reference to be adhered by all the
agencies and training providers.

+
To align the curriculum used by agencies and training providers.

60
Entrepreneur
Malaysia currently has more than 60 entrepreneur development agencies scattered across various
Ministries and states. In 2018, a total of 151 SME development programmes have been planned with
To monitor the outcome of such programmes.

Development financial commitments amounting to RM12.89 billion. Accreditation will be carried out by the National Entrepreneurship
Agencies Training Council to ensure the curriculum is aligned to 11th MP and
other policy directions.
The establishment of MED is timely with relevant key agencies parked under it which are involved in
planning and coordination, funding and training. This would allow the Ministry to design, coordinate
Streamline
and implement SME and entrepreneurship-related policies, regulations as well as action plans across MED will be introducing a legislation to upgrade the status of
and
all sectors in a cost effective and efficient manner. At the same time, there is need for MED to Maktab Koperasi Malaysia (MKM) to an Institute in order to
Rationalize
streamline and rationalize the role and functions of all these agencies so that there is no duplication enhance the quality of training provided to co-operatives.
and overlap of resources.
 STRATEGIC OBJECTIVE 10 : ENTREPRENEURSHIP SKILLS FOR UNEMPLOYED STRATEGIC OBJECTIVE 11 : CONSOLIDATION OF EXISTING ENTREPRENEURSHIP
GRADUATES DEVELOPMENT FUNDS

Newly revamped programme based on current modus will be implemented as a platform to not only assist
unemployed graduates, but also producing job creators by providing relevant training for the graduates with additional MED aspires for entrepreneurship training and courses be made available to the Rakyat by
entrepreneurial modules. This new concept is aimed to assist the unemployed graduates through several initiatives introducing a new service delivery model of subsidization by credit points system, making it
such as :- affordable for all especially the B40s.

Entrepreneurship
To collaborate with relevant agencies to
provide real entrepreneurial training with
live business set up to boost the graduates'
experience & new interest as job creators.
To reach out to graduates through nationwide
Entrepreneurial and Employability Outreach
Programme.
To provide ‘the right awareness approach’
for entrepreneurial to university students.
To assist in providing seed money through a
revolving fund initiated by the private
sector or Co-operatives.
The Entrepreneurship Development Fund (EDF), is a concept whereby an entrepreneur who registers
will be allocated EDF credit points per year, based on their income bracket. The allocation given will
be more favored towards B40s.
To enhance the quality of training, MED will also be monitoring the standard of entrepreneurial
training providers across the country. They would need to register and be certified by MED as an EDF
Training Provider, together with the proposed structure of cost subsidization model for each training.

This concept will allow all income groups in the country to have affordable access to various
An Intensive Boot Camp for Graduates Providing employability training through
certified entrepreneurship training and courses. The model will not require monetary fund per se
already in business. soft skills and genuine on-the-job training
from the Government, but substituting it with a working credit points system thus establishing a
with the industries such as GLCs, VDP new service delivery model.
companies and also Government tender
receiving companies as part of their
Corporate Social Responsibility (CSR)
programme.
 STRATEGIC OBJECTIVE 12 : CO-OPERATIVES AS KEY INSTRUMENT TO
BOOST ENTREPRENEURSHIP AMONG B40

Co-operatives currently account for less than 1% of the National GDP with
the total number of co-operatives amounting to 14,000 across the country.
The Government sees the potential of co-operatives as a growth vehicle

Strategic
for the economy particularly to address the needs of low income
households and rural communities.
Boosting Entrepreneurship Among B40
Thrust 3 To ensure co-operatives remain competitive and viable, this sector will be
given exposure and incentives to explore and penetrate new strategic
businesses that will yield high return.

The new aspirations and ideals will bring new challenge to co-operatives to not only uplift
the standard of living for its members but also to realize the development agenda.
Therefore, the co-operative movement should ensure effective intervention in issues like
co-operative membership, finance, leadership and management. Steps need to be taken to
overcome shortcomings and help co-operatives to operate efficiently. Ultimately,
co-operatives not only bring returns to its members but also act as economic booster to B40s.
STRATEGIC OBJECTIVE 13 : POTENTIAL OF CO-OPERATIVES AS ECONOMIC STRATEGIC OBJECTIVE 14 : CO-OPERATIVES AS DRIVER OF SOCIAL
DRIVER ENTREPRENEURSHIP

From the point of view of a business enterprise, in many aspects co-operatives are similar to other
businesses as they have similar facilities to undertake their businesses, undertake similar functions
and follow good business practices

Co-operatives are not treated as an SME in Malaysia. For example, co-operatives have to register with
the Malaysia Co-operative Societies Commission (SKM) whilst other business enterprise are registered
with the Companies Commission of Malaysia (SSM). In addition, co-operatives have different tax
treatment than SMEs.

There have been more demands from co-operatives to benefit from various assistance and access
provided to SMEs such as brand development (packaging and brand certification), financing (loan, Social Entrepreneurship is a key agenda for MED in In our various socio-economic agenda, people
credit guarantee and grant), capacity building (promotion and training) and market access (domestic empowering the people to address social and should be involve in meaningful and constructive
and international). MED will be looking at this long standing proposal to ensure some parity environmental issues. Co-operatives is one of the manner that allow the economy to be mobilized
between co-operatives and SMEs. tools to achieve this goal since its natural DNA through the communities unity without over relying
combines business and community building to the Government. Social Entrepreneurship (SE)
MED will be conducting a review on the current legislation pertaining to co-operatives namely Akta through co-operatives will be promoted to bring
Suruhanjaya Koperasi Malaysia 2007 (Akta 665) & Akta Koperasi 1993 (Akta 502) through a public social change in community by individuals who
consultation process beginning December 2018 to ensure co-operatives remain relevant and combine the pragmatic and result oriented method
competitive to the current development. of business enterprise with the goals of social
reformer. SE can be used as a tool to inspire
community to address social and economy common
needs through potential entrepreneurship.
 STRATEGIC OBJECTIVE 15 : MULTI PLATFORMS FOR MARKET ACCESS
OF B40 PRODUCTS AND SERVICES

B40 entrepreneurs will be encouraged to get on-board of e-commerce. MED through its agencies such as SME Corp will
continue to provide guidance and training for entrepreneurs to promote and sell their products and services via online
platforms.

In 2017, SME Corp and strategic partners such as MDEC, AliBaba,

Google, Boost and Lazada have trained more than 25,000 SMEs on Scaling-Up Entrepreneurs
Strategic
e-commerce. Strategic collaboration with existing online portals such
as 11 Street, Shopee and Lazada as well as local online platform such
as Fashion Valet and AMAXMall will be strengthened in providing
Thrust 4
platform for entrepreneurs to promote and market their product.

MED will encourage private sector players to partner with B40 entrepreneur to market their products. This will enhance
visibility of B40 products as well as provide more opportunities for B40 to market their products both locally and for
the export market through various platforms.

In addition, MED will also utilise its agencies online portals such Bank Rakyat TV (BRTV) to promote products and
services of B40 entrepreneurs.
 STRATEGIC OBJECTIVE 16 : EXPAND THE ROLE AND COVERAGE OF STRATEGIC OBJECTIVE 17 : TO ESTABLISH A DEDICATED RESEARCH AGENCY
“ENTREPRENEUR ONE STOP CENTRE” ON ENTREPRENEURSHIP AT MED

At present, there is no dedicated research agency that looks into matters pertaining to entrepreneurship in the country.
It is proposed that MED sets up a National Entrepreneurship Research Centre which will undertake to:
KEMENTERIAN PEMBANGUNAN USAHAWAN
MINISTRY OF ENTREPRENEUR DEVELOPMENT

PUSAT SEHENTI KEUSAHAWANAN

MED had launched the Entrepreneur Development One-Stop Centre that offers comprehensive and coordinated Analyze data gathered Provide reports on existing
entrepreneur support services as one stop. through the central database trends of entrepreneurship
that is being developed in the country
The one stop centre will also function as a mobile exhibition centre and facilitate efforts to develop entrepreneurs in
Malaysia. This will help public in getting latest information on entrepreneurship programmes as well as financing
offered by various agencies.

Other facilities to be available at the centre : Analyze available industry

Recommend actions or reports and match back to
policy enhancements existing ecosystem and identify
needed for MED to shape gaps or opportunities for
future entrepreneurs improvements
STRATEGIC OBJECTIVE 18 : TO INCREASE PARTICIPATION OF NEW ANCHORS STRATEGIC OBJECTIVE 19 : CREATING MULTIPLE TIERS AMONGST VENDORS
FROM GLCs/ MNCs/ PLCs/ VENDOR CHAMPIONS

MED aims to develop more SMEs and entrepreneurs including B40 to become competitive component supplier,
manufacturer or service provider in collaboration with anchor companies. In regard to this objective, MED will create a
Presently, the majority of anchor companies that took part in Vendor Development Programme (VDP) are
more holistic ecosystem for local vendor companies through the Reach Out and Adopt (ROAD) Programme aims to
GLCs. The main reason for this is that the anchor perceives VDP as Corporate Social Responsibilities (CSR)
groom entrepreneurs based on their potential to scale up their businesses.
initiatives. There is a need to find a win-win solution with all the parties involved in order to attract MNCs
and PLCs as anchors through initiatives providing incentives and guaranteed supply chain.

To ensure successful execution of Vendor Development Programme (VDP), MED will increase participation
of new anchors from GLCs, MNCs, PLCs and Vendor Champions. Their participation as anchor companies
are needed to expand entrepreneurship sectors and develop more vendors. Thus, will increase and
diversify business areas for vendors.

To date, most anchors under the existing Vendor Development Programme (VDP) only have vendors at a single tier.
There is a need to improve and perhaps emulate the vendor programmes in other countries such as Korea and Japan
As to date, there are 21 anchor companies and 1,354 vendor companies involved in VDP. Subsequently,
where vendors with multiple tiers are created until Tier 5 -7 so that it covers the B40 segment.
the increase in number of new anchors will generate good competition amongst anchors and vendors.

These companies will also participate in the Graduate Employability Programme.

STRATEGIC OBJECTIVES 20 : VENDOR DEVELOPMENT TO FOCUS ON KEY
POTENTIAL SECTORS
MED will elevate local entrepreneurs to think and act global, and at the same time encourage and support SMEs and
high-growth innovative startups to explore the international markets and grab opportunities for exports.
A study of the Vendor Development Programme (VDP) shows that some vendors face difficulties upon
graduation from the system due to the highly competitive nature of the industry. These sectors such as
construction are too competitive to allow graduating vendor to compete equally in the market.
Following this, VDP will focus towards highly potential sectors that will allow newly graduating vendors
to flourish in a healthy environment.
MED is exploring new potential and strategic sectors with high revenue for vendor development. For the
time being, MED has identified a few strategic sectors to venture into, namely automotive, rail,
aerospace, medical devices, biotechnology and renewable energy. Focus will be given as these sectors
are amongst the world’s largest economic sectors by revenue. Vendors will be encouraged to enhance
their capacity and capability to penetrate into these potential and strategic sectors.
The automotive industry is an integral sector, driving the growth of the Malaysian economy, particularly
in terms of engineering and manufacturing. MED is focused on further upgrading the capacity and
capability of local vendors through the new national car project, using local technology and competency
in producing prototypes and designing engines.
STRATEGIC OBJECTIVE 21 : INTERNATIONALIZATION OF LOCAL ENTREPRENEURS
MED’s key focus areas for internationalization will be:
Incorporating capacity building programmes that emphasise and boost the go-global ambition,
competitive mindset, and internationalization strategies of local entrepreneurs.
Consolidating programmes that address technical barriers to trade, such as meeting
internationally accepted standards and compliance requirements of foreign markets, obtaining
certificates and licenses, and addressing branding, marketing, and packaging of products and
services to tap other markets.
Broadening the range of instruments to support firms, such as financial assistance for
participation in trade fairs and registration of Intellectual Property Rights (IPR), and also new
digital platforms that enhance market access.
Establishing G2G partnerships including through specialized trade missions and
memorandums of cooperation/understanding that target specific growth clusters such as halal,
automotive, aerospace, digital economy, bamboo and wood carving sectors. MED has been
mandated to sign a Memorandum of Cooperation (MOC) with Japan on halal. MED will be
following up on the signing of the MoC in order to ensure halal products and services would be
able to enter Japan market in time for the upcoming Olympic & Paralympic Games in 2020.
Providing market intelligence and advisory services on other markets. MED will leverage
Malaysian agencies and foreign missions abroad, and also collaborate with international
organizations such as ASEAN, APEC, OECD and ERIA.
 Blok E4/5, Kompleks Kerajaan Parcel E,
Pusat Pentadbiran Kerajaan Persekutuan,
62668 Putrajaya Malaysia.

Telephone No. : 03-8000 8000

Fax. : 03-8889 3712
Email : webmaster@med.gov.my