Re-examining Malay/Muslim Entrepreneurship: Perceptions, Realities and Hopes

By Abdul Shariff Aboo Kassim

Promotion and advancement of Malay/Muslim entrepreneurship has often been viewed through the business lens. Thus, the solutions proposed have ranged from competence- and productivity-enhancing programmes, such as those offered by the SME Centre at the Singapore Malay Chamber of Commerce and Industry (SMCCI), to the building of sustainable business models.

However, entrepreneurial development is naturally multifaceted and is linked to areas, such as education and skills development, social capital, historical progress and culture. Therefore, any initiative to promote and advance entrepreneurship ought to take an interdisciplinary approach in recognition of this complexity.

While there are those who believe that business is a sphere in which ideas and values level the playing field regardless of one’s identity and background, it is, in reality not exempt from sociological, psychological and historical influences. For these reasons, the Community-in-Review (CIR) 2016 seminar, organised by the Association of Muslim Professionals (AMP) and its research subsidiary, the Centre for Research on Islamic and Malay Affairs (RIMA), sought to highlight perspectives from all these branches of knowledge.

Ethnic Entrepreneurship

Dr Zhou Min, Tan Lark Sye Chair Professor and Head of the Division of Sociology at Nanyang Technological University (NTU), introduced the concept of ‘ethnic entrepreneurship’, namely the ‘middleman-minority’ and ‘ethnic-enclave entrepreneurs’. The former trades between the society’s elites and the masses, and tends to find niches in the retail sector. Their clientele are mainly non-co-ethnic and their connection to the local social structure is generally weak.

In contrast, the ethnic-enclave entrepreneurs have strong, multiple and overlapping connections with the said structure. They serve their own co-ethnic communities and own more diverse businesses in terms of type and scale – retail, professional and personal services and production.

Existing literature do not reveal much about which of the two types are more predominant in contemporary Malay/Muslim community but anecdotal evidence points to a larger presence of ethnic-enclave entrepreneurs, whose clientele cuts less across ethnic and geographical lines.

Why are some communities more entrepreneurial than others? Are they innately or culturally entrepreneurial or is it due to structural factors? Professor Zhou in speaking about cause and effects believes it is both and they are interacting with one another.

Structural factors include institutional discrimination experienced by minority communities in the labour market, language barrier, lack of social capital and access to affordable and reliable co-ethnic and family labour. Professor Zhou argued that entrepreneurial culture arises from structural circumstances and the historical encounter of a group with the larger society.

An entrepreneurial community nurtures entrepreneurial spirit by providing role models, mentors and informal training for aspiring entrepreneurs.  Thus, pioneering entrepreneurs are important in nurturing an entrepreneurial culture in a community. This in turn contributes to the development of social structures and capital, paving the way for entrepreneurship to flourish in the community.

Biases

Contentious issues of discrimination surfaced in the course of the, Karyawan team’s interviews with business-owners and community leaders, where two opposing schools of thought reigned: one believing that the success of a business hinges upon its value-creation abilities for stakeholders, and the other believing that, barring exceptions, that the interplay between socially influenced-perceptions towards a business or its owner(s) and value creation has a profound influence in shaping outcomes.

According to Assistant Professor of Finance at the NUS Business School, Dr Johan Sulaeman, evaluating a business’s performance is subjective and thus susceptible to biases, both conscious and subconscious. While unawareness makes the latter harder to manage, both types of biases nevertheless could lead to inaccurate assessments of a business’ quality of service.

Biases can be addressed by enacting laws and regulations but there are ways to mitigate them outside the legal channel. One such means is through education, which, theoretically, prompts an agent who is subconsciously biased to consider the possibility that he or she may be so and, for those who are consciously biased, that his or her actions are being monitored. In practice, however, these are difficult to achieve because the subconsciously biased may be in denial while monitoring actions requires transparency and continuous effort.

What then can be done to mitigate biases? Dr Sulaeman suggests that with modern communications, such as through social media, minority communities have more avenues to highlight cases of biasness in an organised way. The recent incident involving Tampines One is a case in point. A staff rejected an application for rental space, citing the mall’s mainly Chinese “target audience”.  It led to a Facebook post alleging discrimination that went viral, prompting a statement from the mall that the employee concerned has erred. Such reporting via social media brings biases against particular groups to the surface and makes the agent more aware that their biasness can have negative consequences.

However, biases can also result in positive outcomes. Competing in uneven playing fields can actually lead to better performance as they are forced to ‘train’ under difficult circumstances.

The community’s business fraternity and leadership should thus be wary of oversimplifying and attributing the lag that Malay/Muslim entrepreneurship is experiencing to cultural or mindset deficiency. On the contrary, they have a moral obligation to encourage Malay/Muslims in constructive ways, for example, by providing training, mentorship and other resources.

History

Our interviews also revealed a tendency to compare the progress of Malay/Muslim entrepreneurship with that of other communities. Such comparisons have little scientific validity if they do not take into account developments over a historical timeline that places communities on different developmental trajectories.

To begin, the oft-cited notion that the Malays are inherently disinclined to trade is a superficial argument if one has the knowledge that not only have Malay trading classes existed but that its influence in trade and commerce, as noted by Willem Lodewycksz, author of the account of the first Dutch voyage to the East Indies under Cornelis de Houtman in 1595, includes Malay being the lingua franca – the official language of contracts and diplomatic correspondence^[1]. However, increasing Dutch dominance led to the decline of these Malay trading classes over the course of three centuries.

The colonial history of the Malays and the Javanese are closely intertwined as they constitute part of the Malay Archipelago. Dr Casey Hammond, a Senior Lecturer in Humanities Arts and Social Science at the Singapore University of Technology and Design (SUTD), highlighted the complex relationship between trade and politics that existed at that time. Trade structures were predominantly monopoly contracts between the Dutch colonisers and the sultanate of Mataram, the last major independent Javanese kingdom, who was allowed to remain in power in exchange for trade deals.  When the Mataram Sultanate finally surrendered to the Dutch, the latter’s control of the state deepened its penetration of the markets, thereby creating more opportunities for migrant Chinese to enter the social structure and fill the role of middlemen. A rapport was established between Chinese traders and the Dutch and subsequently the British, who in turn encouraged and sped up Chinese immigration.

Thus Chinese immigration included those of different social and trade classes, which facilitated the development of an ethnic business community: entrepreneurs with supply of co-ethnic labour and patrons. The British rulers of the time were accommodating to such demographics as it meant a more sophisticated and organised society which facilitated their business and administrative processes. But it also meant displacement for the Malays in terms of trade and commerce, and in skilled labour supply. The effects of this new trade and social order continued to be felt in the post-colonial era.

While there have been dedicated efforts by the Malay/Muslim community to promote and advance entrepreneurship in the community, it is worth noting how such historical developments have impacted the economic position of the Malays in society so that cross-cultural comparisons can be undertaken without unduly downplaying the considerable ground that the community has to cover before the disparity in entrepreneurial progress is bridged.

The Future

Innovative or disruptive technologies are what Mr M Nazri Muhd, Chief Executive Officer and Head of Global Advisory Services of Vector Scorecard, saw as interesting prospects for the community. He observed that, each day, millions of dollars are being transacted but Malay/Muslim businesses are not participating enough in fast-growing industries.

Financial technology (fintech) is an example of an industry enjoying phenomenal growth.  In 2015, global investments in fintech soared to $23.7 billion, up from just $2.2 billion in 2012. Mr Nazri felt that Malay/Muslim technopreneurs are not integrated enough with the tech fraternity in Singapore to identify and seize opportunities locally, let alone globally. To do so would entail spending time with venture capitalists, tech accelerators, various agencies and potential business partners.

Mr Nazri argues that disruptive technology does not mean cutting edge, highly sophisticated scientific phenomena such as biomedical sciences or nanotechnology. Companies such as  Fastacash, iCarsclub, Capillary Technologies and Carousell Singapore capitalised on various schemes and seed funding before scaling up and attaining their current statuses. Today, venture capitals are accessible to start-ups even if they do not have a five-year financial track record to substantiate their investment-worthiness.

Mr Nazri is especially concerned that Malay/Muslim companies are not only failing to take advantage of government grants but also venture capitalist funds. He attributes this to the absence of the “think big, start small and scale up” mindset. He felt that Malay/Muslim companies lack the clear vision to know that most need to spend 80 percent of their time immersing themselves in the tech ecosystem and capitalising on the various schemes and funding opportunities.

He thus proposes that the community’s businesses and leadership consider setting benchmarks for the next 5 to 20 years, during which period they nurture their businesses to capitalise on new technologies in order to achieve breakthroughs. In the new economy, there should be a more concerted endeavour to develop business acumen: keeping abreast of the current trends, understanding the various stakeholders and knowing what is essential for a business to thrive in the new economy.

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