When education breeds entrepreneurship
Advancing into 2023, we find ourselves powering further still into the fourth industrial revolution. At the height of the tech and digital era, we are in a time when entrepreneurship is understandably on the rise. Currently the world boasts over 582 million entrepreneurs with an impressive 305 million startups being created annually.
One major factor, which can take credit for this impressive expansion, is access to the specialised learning and training that is provided through higher education institutions. The increased demand for courses by innovative young people has created a global supply of programmes in entrepreneurship, which have become an intrinsic part of many universities globally.
The popularity of MBAs is on the rise, leading to many students building the confidence needed to start their own businesses. Research shows that 10% of MBA graduates become self-employed entrepreneurs.
MBAs have become the most popular degrees taken online, and it’s no surprise. 96% of Fortune-100 companies have MBA graduates in their near-term hiring plans while 91% of companies hired people who were MBA graduates in 2021 — an enormous increase from 59% in 2008.
Young people ideally need a clear perspective on where they plan to be in the future. Prospective entrepreneurs typically enroll in universities with the idea that they want to start a business when they leave — and often do so soon after they leave. In 2018, nearly half (45%) of these students intended on being an entrepreneur within five years of graduation with one in ten planning to start directly after entering the “Real World”; and this number continues to climb.
Furthermore, many students start knowing in which subject they need to specialise in order to bring these plans into fruition. Most entrepreneurship schemes are generic, with an option to focus on an additional supporting discipline, such as science, business, engineering or computer science.
How do we prepare bright people to become entrepreneurs?
So, why do these young people want to become entrepreneurs? How do they know they are the correct person for this potential massive undertaking? Do they understand what’s involved and how it will affect their future?
Entrepreneurs, like everybody else, come in all different shapes, sizes and flavours but they often share certain character traits. They should be a person who wants to use innovation to solve a specific problem. It should not just be to earn millions and gain prestige. They should be visionary, but practical with a clear mission and a precise perspective on how it can be achieved in the “real world”.
Besides being able to learn the necessary skills to support their idea they must also realise that entrepreneurship can affect their personal lives and work-life balance, and they must be willing to make changes to turn concept into reality.
When starting a new venture, founders must have the ability to look within, understand what their strengths are and where they lack skills. It can be humbling to acknowledge that nobody can do everything and finding fellow entrepreneurs who can bridge that gap is no easy feat. They could be anyone from a fellow cofounder or employees, maybe a mentor. Support should come from all directions if you plan to be able to move forward.
Personally, I believe that it is imperative for such factors to be an intrinsic element of every university entrepreneurship course.
Finding the right programme
Choosing the correct course for your future is tricky, especially when it comes to MBAs. With businesses judging potential candidates on the institution from which they received their qualification, it’s no longer good enough to simply get onto any MBA course. So, what should tomorrow’s business moguls be looking for?
There are many aspects that encourage students to apply for MBA courses, but often a deciding factor is projected earning potentially post-graduation. On average an MBA graduate can expect remuneration of approximately £95,000 ($115,000). The better the university, the better the programme and the more money you can expect to receive. Alumni of American Ivy League institutions such as the University of Pennsylvania, for example, could start their career by raking in an impressive £140,000 ($170,000) per annum.
Salary expectation is, of course, not the only consideration when searching for the best place of higher education. Top institutions have a multitude of factors to attract the brightest of candidates.
Universities need an executive portfolio for innovation and entrepreneurship across all levels of the institution. Ideally, they will have some kind of partnership with both government and the private sector. There should be an incentive strategy to encourage innovation and entrepreneurial behaviour, investing in both the medium and long-term.
Inspiring students is important and finding a way to include current, successful entrepreneurs can make all the difference. They can be invited to be mentors and guest lecturers, or perhaps be members of the faculty. Arguably, however, the best way to turn theory into practical skill is by doing the job itself. Engaging with external stakeholders and building relationships with strategic business partners is important. This can lead to collaboration with corporations and industries for knowledge exchanges and incubators — and potentially provide employment opportunities.
There are many ways for these institutions to be competitive in a growing and saturated student recruitment market to candidates globally.
The difference between the USA and Europe
There are significant cultural differences between North America and Europe when it comes to entrepreneurship and the role of education.
Across the Atlantic, it is common that courses concentrate on the practical steps for creating a venture. They educate students on how to form a startup, from the basics of finding a lawyer to set up an entity and finding an appropriate location for the office to deciding who the target market is.
In Europe, teaching tends to be more general and holistic in approach; theory about entrepreneurial skills and focusing on developing the correct personality.
But do you even need a degree to be an entrepreneur?
Richard Branson famously left school at the age of 15 but with drive and entrepreneurial spirit he became one of the most successful businessman of his era — so technically of course the answer is no. However, that was a different time and as time moves on innovation becomes more and more difficult, especially in a market flooded with people convinced they have the Next Big Thing.
Qualifications will rarely make up for other qualities such as drive, ambition, tenacity, and the lateral-thinking that lends itself to business sense. Elon Musk explicitly ensures, that at Tesla recruitment is never based on someone having (or not having) a certain degree or qualification. He feels that formal education cannot replace what he calls “exceptional ability” and is quoted as saying that in his opinion, university isn’t useful and “ideally you dropped out and did something” (citing Bill Gates, Steve Jobs and Larry Ellison as examples).
There will, however, always be exceptions to a rule, and Musk is correct; not everyone needs the Ivy League education that he was afforded UPenn. Yet, I believe that the university experience is not only about the classroom. So much is achieved and learnt from outside of the lecture hall.
There is certainly value in that knowledge and those skills, but life lessons learnt from living away from the family environment can be invaluable, building character, fortitude and independence. Interpersonal skills and relationship building with peers from a variety of backgrounds are vital components of entrepreneurship.
University is more than just the learning. Networks created in these grassroot stages of a person’s career can be the most solid ever to be made in one’s life. Being a successful entrepreneur is not only about your skill and your plan. It’s about the people you inevitably meet along the way.
