Wednesday, December 04, 2013

We're missing the boat on the quest for entrepreneurial graduates

For years, the term entrepreneur had negative connotations.  Associations of getting rich at the expense of others were particularly pervasive after the 1987 crash.

But it seems the prevalence of such ideas has waned.  Amway's latest Global Entrepreneurship Report found more than 80 per cent of Australians had a positive attitude towards entrepreneurs, the fourth highest of the 24 countries assessed.  But Australia continues to be held back by the lack of quality entrepreneurial education available in tertiary institutions.

Australians have begun to identify the value of new ideas, respect the hard work and ingenuity associated with starting up a business and appreciate the risk of leaving behind the stability of a fortnightly pay cheque.

Isabel Welpe, who oversaw the Amway report, argues a factor that diminishes the levels of entrepreneurship in many countries is the lack of entrepreneurial education.

This is pertinent in Australia, where the teaching of entrepreneurship is being held back by a system dominated by traditional business models of business education.  The juxtaposition between Australia's tertiary entrepreneurship courses and those in the US and Europe is stark.

US universities have been at the forefront, providing innovative courses that incorporate the practical elements necessary to provide students with the tools to start businesses.

Babson College in Massachusetts maintains the importance of experiential education and real-world business experience.  Babson's undergraduate program is consistently voted best in the US while its postgraduate program has never fallen below second.

Like the University of Houston, whose undergraduate program is ranked second, Babson's entire faculty comprises entrepreneurs.

This is in stark contrast to Australia, where finding teachers with private-sector experience is hard;  identifying any who have successfully founded and run startups is even harder.

More generally, business education is too focused on servicing the needs of major corporations and accounting firms, and feeding graduates into these existing frameworks.

But big business makes up only 5 per cent of all businesses in Australia and managing smaller enterprises requires a different set of skills and a different mindset.

Most international studies conclude that between 30 per cent and 50 per cent of differences in economic growth rates across countries can be explained by differing rates of entrepreneurial activity.  Entrepreneurs are the heroes of capitalism.

Internationally, great progress has been made in universities to encourage and facilitate more people to become entrepreneurs.

In the Amway polling, 50 per cent of respondents in Australia rated entrepreneurship education and the teaching of business skills the most important factor in encouraging the foundation of businesses.  While the debate over the merits of entrepreneurship teaching continues to rage in Australia, overseas universities have moved on.

They are playing a vital role in driving the progress of entrepreneurs and in turn the economic growth of their nations.  It is about time we did the same.

No comments: