The Impact of Economic Literacy Components on Entrepreneurship Potential Among Secondary School Students in Sik, Kedah

Background/purpose. Entrepreneurs are the catalyst of change, innovation, and growth in any country. The contribution of entrepreneurship activities to the growth and prosperity of any nation is undeniably affirmed. Nurturing entrepreneurship potential to sustain the important national advancement activities has not been given sufficient attention in the secondary years of schooling. Thus, in society today, there are more job seekers (workers) than job creators (entrepreneurs). One factor contributing to the downward trajectory in the number of entrepreneurs, especially in the underserved society, is inadequate knowledge of economic indices. This study examines the influence of economic literacy, with an emphasis on financial literacy components and awareness of the Economic Report, on the entrepreneurial potential of secondary school students in Sik, Kedah, Malaysia. Materials/methods. This study employed a quantitative research approach and a cross-sectional design. Data were collected through surveys administered on Form 4 secondary school students, assessing their levels of financial literacy, comprehension of the Economic Report, and entrepreneurial potential. Data analysis was conducted using SmartPLS 4.3 software to evaluate the relationships between financial literacy, economic awareness, and entrepreneurship potential. Results. The findings show that financial literacy and awareness of economic indicators significantly influence students' entrepreneurial potential. Furthermore, the findings depict that financial literacy has a more substantial impact on entrepreneurship potential. The result of instrument validation indicates that the entrepreneurship potential scale is unidimensional, while the economic literacy scale is multi-dimensional. Conclusion. This research contributes to the literature by providing empirical evidence on how financial literacy and economic knowledge shape entrepreneurial aspirations and capabilities among youths in Sik, Kedah. Higher financial literacy and reading of economic reports will increase the student's potential to become an entrepreneur. The insights derived from this study offer valuable implications for policymakers and educators in designing targeted interventions that promote entrepreneurial mindsets.