Written by Professor Mark Dodgson, UQ Business School and Professor David Gann, Imperial College for The World Economic Forum.
Fast-growth entrepreneurial ventures are essential for prosperity and social progress. Entrepreneurs create value by seizing opportunities, assuming risks, solving problems and taking action. They take risks in creating and commercialising innovative technologies in ways that larger businesses are unable to. Sometimes these technologies open completely new markets, transforming industries. Tesla is a good example.
Small businesses can be agile early movers in adapting to new trends and responding to crises, such as the COVID-19 pandemic. They can pivot quickly to take advantage of opportunities or when their growth is slowing. Their early years of rapid growth can provide excellent returns to venture capital and the capital markets. Zoom is a good example.
But there are growing concerns of a possible steep downturn in the development of ideas which feed the early stages of new business formation. Changes in the university sector caused by the pandemic and geopolitical tensions reshaping the global economy lie at the heart of these worries.
Universities play a crucial role in underpinning innovation and entrepreneurial activities. They provide the conditions, facilities and talent that foster the emergence of breakthrough ideas.
Many have systems in place to support the development of new ideas so that they have practical use. They play an important part in maintaining the deal flow that gives opportunities for venture capital investment, which in turn mobilises the growth of entrepreneurial ventures.
Leaders in the Australian venture capital sector warn that the higher education sector has been “gutted”, with the pandemic causing chaos for universities that have become reliant on international student fees. The knock-on consequence is less funding for students to go on to postgraduate work where they develop ideas that could become tomorrow’s next big investment opportunity.
Universities need to prepare graduates for careers they define for themselves
In the past, a university education typically prepared students for careers defined by others. More than ever in the unpredictable post-pandemic world, universities need to prepare them for careers they define themselves. Universities have to offer the curricula, facilities and incentives to create new generations of entrepreneurs, as well as the traditional pathways into the professions, established companies and into government.
This is part of the sea change that is needed to modernise universities and will play a crucial role as they help build the jobs and industries needed for economic recovery after COVID-19. When once it was a marginal activity, entrepreneurship has become a centrally important part of the university experience.
Why encourage entrepreneurship?
Student demand for entrepreneurship courses has accelerated in recent years, reflecting their disillusionment with a world created by others. Millennials want to shape their own future, and entrepreneurial skills are key to their working lives. Our experience of teaching the subject over several decades has shown a substantial increase in demand for courses on social entrepreneurship.
There are also strong pedagogical reasons for teaching entrepreneurship, as it engages students with pressing real-world problems, develops critical thinking, and broadens their life skills. Universities help fulfil their economic and social missions by promoting entrepreneurship.
Entrepreneurship programmes
Universities provide undergraduate and postgraduate students with taught and experiential entrepreneurship programmes alongside extra-curricular activities, such as entrepreneur clubs, competitions and prizes.
Entrepreneurship courses are proliferating. It is estimated that there are at least 150 programmes available to students at Stanford University, offered by a range of providers. A study has shown that Australia’s 41 universities offer nearly 600 subjects related to entrepreneurship. The University of Queensland offers over 100 courses on entrepreneurial learning across its faculties.
The core curricula include courses on the theory of entrepreneurship, new venture creation, venture finance, intellectual property and negotiation skills. More recent additions include design thinking, creativity management, and Lean Startup: teaching the skills to shorten business development cycles.
The OECD and the EU have undertaken national reviews of the impact of higher education institutions in supporting entrepreneurship. Recommendations include the encouragement of an entrepreneurial mindset, problem-based learning, enhancing interdisciplinarity, and linking students with the local, regional and international economy. Organizations such as the Quality Assurance Agency in the UK offer guidance to higher education providers on enterprise and entrepreneurship education.
There are no unified standards in entrepreneurship courses, covering why, how and to whom they are taught. We think there are dangers in standardising the curricula, because it is important to tailor entrepreneurship education to local and regional contexts: a course developed for Silicon Valley start-ups may be of limited value in an agricultural region.
Entrepreneurship programmes are offered to different levels of participant, including to academic staff wishing to become or mentor entrepreneurs. Programmes target students with different backgrounds and ambitions, for example, those working on digital or medical technologies, or focusing on design. Some programmes are offered exclusively to women entrepreneurs, such as Imperial College’s WEInnovate.
Universities need to ensure their intellectual property policies do not limit the ability of academics to work with entrepreneurial students in commercializing their research, if entrepreneurship programmes are to succeed at every educational level.
Courses are provided to doctoral and post-doctoral students. The MedTech Superconnector, for example, is a joint venture of six London universities established to facilitate the early stage development of innovative medical technologies, including devices and diagnostics. It provides funding, training, mentorship and access to industry partners to fast-track the translation of medical research.
Techcelerate, a three-month Imperial College programme for post-doctoral researchers, provides masterclasses and venture review sessions with the opportunity to showcase ventures to a community of investors. Participants are required to make connections and interview dozens of potential customers, competitors or users of their research to refine their ideas and deliver impact by identifying customer problems and market opportunities.
Entrepreneurship skills
Learning about entrepreneurship encourages analytical, organizational and interpersonal skills, and develops leadership and networking abilities. Students learn to identify and solve problems, work in teams, calibrate risks, and effectively communicate with others in very different domains, such as with investors. It helps them innovate, inventing and implementing solutions to problems. It moves them beyond current approaches of particular disciplinary perspectives, helping them to create imaginative new options, adopt strategic approaches, and design organisational mechanisms to experiment and transform good ideas into reality. It develops the mental agility to move from the identification of problems to the search for their answers.
Fostering an entrepreneurial mindset prepares students for the uncertain and unpredictable world they will contribute to in the Great Reset.
Many students, especially in science and engineering, often seek rapid solutions, sometimes coming to answers before questions are fully understood. Entrepreneurship skills encourage their ability to play and tinker with a range of possible solutions; to sense alternatives and rapidly learn from feedback; then to make judgements based on evidence to select options for further development. Importantly, it helps to maintain optimism in the face of failure.
Facilities and incentives
There is a proliferation in the range of facilities and equipment universities offer to encourage student entrepreneurs, including accelerators, hackspaces, makerspaces, invention rooms, incubators, wet-labs and digital observatories.
Imperial College has a wide variety of support mechanisms for encouraging the development and testing of new products and services. Its Enterprise Lab coordinates a range of student programmes, projects and competitions. The College’s Advanced Hackspace opened 3 years ago. At that time the Imperial community of 24,000 staff and students were producing around 1,000 prototypes a year. The maker facilities, 3D printing suite, wet-labs, training and discipline of the advanced hackspace has seen prototyping triple.
The University of Queensland has an Idea Hub Unlimited that attracts over 900 people to its programmes annually; iLab Accelerator, which has conducted over 3,200 mentor sessions; and a Startup Academy which assists the progress of entrepreneurial projects. Some 200 start-up companies have benefited from the iLab accelerator and incubator programmes.
As well as physical infrastructure, opportunities are offered to students for networking and mentoring. Entrepreneurs in residence are appointed, prizes are awarded and venture funds offered, all to encourage students on their entrepreneurial journey.
Many of the methods of supporting student entrepreneurship are complementary. Student projects can turn into competitions for prizes, which can lead to access to facilities, further training, and funding opportunities.
The encouragement of student entrepreneurs should become part of the fabric of the university: a key component of their missions of contributing to prosperity and social progress, especially after the trauma of 2020. Student entrepreneurs help build and leverage university’s international connections, and some in future may become important philanthropic donors. Perhaps most importantly, they add significantly to the vibrancy and innovativeness that surround universities, and clearly demonstrates their social and economic contributions.
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