Education and high growth entrepreneurship

High growth entrepreneurship has not been mentioned in education circles for a very long. There are many definitions of the term, but for the purposes of this article we can take Autio’s description which is “strong owner-managerial aspiration for rapid organisational growth coupled with substantive potential for achieving this aspiration”¹.

It’s only recently that the key role that high growth entrepreneurship plays has been highlighted. Its importance becomes clear when we look at its effect on economies. We know that employment, wealth creation and economic growth are achieved in economies where there is a thriving entrepreneurial class. Fostering these attributes is perhaps even more necessary in developing countries. High growth entrepreneurship drives faster development of these factors and high growth firms make a disproportionately large contribution to an economy. One of the reasons for this is that the technology opportunities that drive high growth entrepreneurship have expanded so rapidly.

In fact policy makers around the world are starting to understand and believe that high growth entrepreneurship is crucial for all countries, regardless of their levels of development. To the extent that the United Nations Foundation has asked a business and technology figure of the stature of Michael Dell be its Global Advocate for Entrepreneurship in order to “help shape and advance a global entrepreneurship agenda”².

High growth entrepreneurship is richer territory than merely more companies producing more products and services more quickly. What it yields is entire economies becoming more vibrant, dynamic and entrepreneurial, which can entirely change a nation’s economic emphasis. It’s not all smooth sailing though – high growth entrepreneurship can be disruptive, making it difficult for government and business to fully take it on board³.

The influence of education

Education levels, the richness of the educational environment, the encouraging of entrepreneurial traits in educational institutions, formal educational courses – these have all been identified as having a positive influence on the development of entrepreneurial drive and subsequent entrepreneurial activity and success.

So it follows that the more hospitable the environment for entrepreneurial development and the more education that can be provided, the more high growth entrepreneurs will be produced.

All of the knowledge related to the influence of education on high growth entrepreneurship shows that high growth entrepreneurs have higher levels of education than average. In turn, higher growth firms usually have founders with higher levels of education than lower growth companies⁴. More pointedly, there is a lot of evidence from studies in at least 20 African countries that examined the effect of schooling on entrepreneurial performance. It all supports the idea that the more highly educated the entrepreneur, the superior the entrepreneurial performance⁵.

The message is clear: we need to provide as much of the right sort of entrepreneurial education to as a high a level as possible, and place this within reach of as many learners as possible. In this way high growth entrepreneurship will be maximised, thus stimulating the economy, creating wealth and creating employment.

1. Autio, Erkko (2009) : The Finnish paradox: The curious absence of high-

growth entrepreneurship in Finland, ETLA discussion paper, No. 1197

2. Atkinson, Rob (2015) : “High-Growth Entrepreneurship for Development: Report of a Roundtable with Michael Dell”
(http://www.innovationfiles.org/high-growth-entrepreneurship-for-development-report-of-a-roundtable-with-michael-dell/)

3. Ibid

4. Audretsch, David B. (2012) : “Determinants of High-Growth Entrepreneurship”, Report prepared for the OECD/DBA International Workshop on High-growth firms: local policies and local determinants, Copenhagen

5. Sleuwaegen, Leo and Goedhuys, Micheline (2009) : “High-growth entrepreneurial firms in Africa: a quantile regression approach”, Small Business Economics

Education for social entrepreneurship

Social entrepreneurship is important because it blurs the line between for-profit and non-profit enterprises, simultaneously opening opportunities between the two where both profit and positive social impact are desired outcomes. At the heart of social entrepreneurship lies the notion of using business principles, strategies and actions to have a positive effect on the wider community and society as a whole. While definitions of the term "social entrepreneur" differ, there's little doubt that the sentiment behind it springs from broader social concerns that are informing today's generation. Students today want make their own contributions to the burning issues of their generation: the environment, world poverty and healthcare. This is where the wellspring of social entrepreneurship lies. Taking aim at these issues using the principles of social entrepreneurship helps to create new solutions, not least because social entrepreneurship reframes the issues in a broader context. Social entrepreneurship education helps to refocus the lens and produce individuals who have the type of skills that can drive change in business objectives and solve social problems. Consequently many institutions of higher learning have recognised the importance of social entrepreneurship by creating formal courses, often as sub-courses in degrees like MBA's.

Social entrepreneurs as young leaders

Young social entrepreneurs can play a leadership role by infusing traditional business objectives with a social mission. The educational institutions charged with producing these young leaders need to make provision for them to learn the skills they need to reframe issues and create sustainable solutions out in the corporate world. It's as much an existential issue as it is a practical one. Social entrepreneurship helps to answer some of the bigger questions that students and potential leaders encounter at tertiary institutions: "What is the broader purpose of my studies?", "Why am I'm studying?" and "What am I going to do with what I have learnt?". Institutions can help with this, not only by offering formal courses in social entrepreneurship, but by creating a conducive environment. Teaching social entrepreneurship is thus a key part of solving broader social issues. Entrepreneurial leadership is characterised by drive and determination, the willingness to fail and persevere, and the ability to apply knowledge productively. These are also the characteristics of good leaders. So one can see how creating good leadership as well as social entrepreneurship are mutually reinforcing endeavours.

Social entrepreneurship in developing countries

The developing world is often a rich source of social entrepreneurship, for the simple reason that, in countries where poverty and a lack of infrastructure pose enormous challenges, the focus becomes using innovation, flair and determination to solve very basic social problems. This is an environment in which social entrepreneurship thrives. Most of this social entrepreneurship is focused internally on the countries' own markets, and on addressing daily social problems. The knock-on effect is that companies and other organisations from the developed world are able to take up these social entrepreneurship ideas themselves, and use them in other contexts where they will prove to be of value in addressing similar issues. Education often follows on, with tertiary institutions taking the lead from these companies and organisations and starting to include new social entrepreneurship ideas in their curricula in one way or another. And it is through this social entrepreneurship education that a new generation of students is given the skills and tools to make an impact once they have graduated.

The Role of Apprenticeships

Apprenticeship is a powerful way of training someone into a particular career, job or skill set. It is especially useful in a developing economy where access to formal education may be limited and unemployment at a relatively high level. It represents an excellent way of bridging the gap between secondary education and tertiary education, playing the role of feeding skilled people into the workforce. Apprenticeship has the dual effect of filling a skills gap for an industry and training a person to have the necessary skills to forge a successful career.

Apprenticeship is the term commonly applied to blue collar trades and occupations, as distinct from the term learnership, which applies more to white collar vocations. 

A three-way partnership

Apprenticeships work best for the economy when there is a partnership between business, tertiary education organisations like technical colleges, and government. This partnership encourages education, economic development and workforce development. Implemented properly it financially benefits not only the individual but also the employer and the country.

The ideal combination is to supplement on the job training with some form of classroom instruction. This gives the apprentice the best of both worlds – theoretical instruction and practical application in a real-world environment. 

Apprenticeships are a cost-effective way for employers to train employees. Businesses are investing in training the next generation of the workforce, typically at a lower cost than putting an employee through a tertiary education qualification, and they also get the benefit of having an active employee while the training is occurring. The cost to the employer is less, because they typically pay the apprentice a lower wage than the average worker. This amount increases as the apprentice advances in the apprenticeship. As the apprentices earn more they also pay more tax, bringing a further benefit to the economy.

It also costs the government less to run apprenticeships than traditional education programmes because the employer assists in covering the cost of the education. This is a good example of a win-win partnership between government and private enterprise.

Community and individual benefits

Apprentices earn money while they learn on the job. This allows them to make a contribution to the economy while they are still learning and growing in their occupations. They spend their money in the local communities and thus help to stimulate the local economy. This is completely the reverse situation from the tertiary education scenario where students do not contribute as much to the economy due to lack of funds; instead they typically borrow from the economy in one form or another – for example, by taking out student loans.

Apprenticeships also help to grow the local and surrounding economies through entrepreneurship and job creation. Someone who completes an apprenticeship as a plumber may go on to start a plumbing company and employ others.

  

Apprentices may also receive other benefits from their employers, such as medical aid assistance, which further relieves the pressure on the public health system.

It is generally the case that once the apprenticeship programme has been completed, those who have participated as apprentices have higher annual earnings than those who have not been apprentices. They get an education that is supplemented by on the job training and end up with a sustainable career path.

There is also a psychological benefit in that they feel more productive and more part of meaningful economic activity while they are training.

Barriers to Educational Technology Adoptions in Developing Economies

Technology can play a hugely positive role in education – from connected devices in classrooms to distance learning over vast geographical distances. It can improve student levels of achievement, increase motivation and provide supporting resources that otherwise might not be available. However, in developing economies there are often several hurdles that need to be overcome in order to implement and use these technologies.

 

Electrical power

It goes without saying that electrical power is required to run technology, and this can provide quite a challenge in a developing economy that does not have the necessary electrical infrastructure. In South Africa there is also the issue of loadshedding, which renders electrical power supply erratic and intermittent. Until power is widely available, reliable and affordable for many in Africa and elsewhere, educational technology uptake will be slow. At the same time there are a number of ways to address this problem. The best way is to expand the electricity grid to include as many areas and people as possible. This should be a priority. There are also solar power solutions where panels are installed to power the technology and devices. A third option is that of a generator or inverter, which will supply electrical power to the necessary devices in order to make technology in education a reality.

 

Internet connectivity

The next common technological requirement that can assist in education – and that makes distance education possible – is Internet connectivity. A reliable and fast enough connection is required to access the resources that are available, and this needs to be implemented in a cost-effective way. Broadband costs need to be kept as low as possible to allow people in developing countries to access the Internet. Increased Internet accessibility and increased bandwidth are unlikely to occur without commitment by governments and the involvement of private enterprise, such as the mobile phone service providers and operators. Fortunately in many countries these entities are coming onboard and rolling out connectivity as fast as possible. Easily accessible and affordable broadband would allow both teachers and students to access educational resources easily and cost-effectively. It would also allow resources and teaching aids to be used, for example video tutorials, podcasts and interactive study aids. These could be used in or outside the classroom. Students would be able to access these resources at home, to further bolster their studies and allow them to effectively receive extra lessons outside of the classroom.

 

Training and professional development

Teachers who have been brought up in a world with limited technology can find it difficult to use technology and support learners. This needs to be addressed by implementing technology training programmes for teachers. The training does not have to be intensive as most of the technology is user-friendly and intuitive once the basic knowledge is there.

 

The value placed on teachers

Teachers are the cornerstones of society, as upon them rests the responsibility of educating future generations. They therefore need to be properly valued. Here technology can play a role as well. It can help them to elevate their skills and aid their professional development, leading to them being more knowledgeable and adept, which in turn would lead to them being more highly valued in society as highly skilled resources. Remuneration needs to be sufficient to allow them to focus solely on their teaching careers – people cannot focus on teaching if they must hold several part-time jobs in order to support themselves and their families. In countries like South Africa there is also a shortage of skilled, qualified teachers, which needs to be addressed at the tertiary education level. More people need to be encouraged to take up teaching as a profession, and be given access to the right kind of teacher education.

Entrepreneurial Role Models & Entrepreneurial Intention

There’s no doubt that role models play an important role in the lives of many people, especially young people. So it stands to reason that those who are exposed to entrepreneurial role models at a young age – and even later on in their lives – might be more encouraged to start businesses. Let’s have a look at this idea in a bit more detail.

 

The influence of role models

A role model can be broadly defined as an individual who sets an example that can be copied by others and who stimulates or inspires others to make certain decisions. The decisions that people make to engage in certain behaviours or to adopt certain ideas are often influenced by the behaviour and opinions of others and the examples that they present themselves. For this reason, role models in the media have a significant influence on the thinking and ideas of people. They are also increasingly being recognised as influencing young people’s career decisions.

Many successful entrepreneurs the world over say that their decision to start their businesses was due to the influence of role models. These role models have often been entrepreneurs themselves, ranging from the likes of famous entrepreneurs like Steve Jobs to role models that are closer to home, like friends, colleagues and family.

The first role models we encounter in life are our parents – and indeed, we see that there is a definite link between a parent having been an entrepreneur and their children taking the same course in life. Afterwards, networks and peer groups provide role models, in addition to the media – for example, documentaries on famous entrepreneurs.

 

Role models influencing entrepreneurial intention

In a previous article we looked at the role that entrepreneurial education plays in encouraging entrepreneurial intent among students. What we now find is that, while this does make a difference, what is an even more important factor in determining whether a person will go out and start a business is his or her exposure to entrepreneurial role models[1]. Studies have found that the role models that budding entrepreneurs mentioned as having the most influence on their decision to start businesses were parents and peers, followed by famous people and teachers. The main function of these role models is that they provide the ability to learn by example. It is also interesting to note that female students were more influenced by role models, but male students were generally more likely to start businesses and reported higher entrepreneurial intention.

Several conclusions have come through from these studies[2].

These include:
1) Role models make a difference when it comes to choosing an entrepreneurial career.
2) Role models are seen by start-up entrepreneurs as being influential people.
3) Role models can compensate for a lack of entrepreneurial experience.
4) Role models that “match” the student’s characteristics (e.g. gender, nationality) have a higher level of influence.
5) Closer role models (family, colleagues, acquaintances) have a higher impact than famous personalities.

So it seems that the influence of a role model is a very important factor in a person’s decision to become an entrepreneur. For this reason it is necessary for educational institutions to include appearances or talks by role models as part of their curricula. We often see this use of “icons” in other areas, like healthy lifestyle achievement, sports and the arts. What is necessary is that students be exposed to entrepreneurial role models in the same way. This can have a strong effect on the entrepreneurial intentions of the students.

Notes: 1. Hongyi Sun, Impact of role models on the entrepreneurial intentions of engineering students, City Univ. of Hong Kong 2. Niels Bosma, Jolanda Hessels, Veronique Schutjens, Mirjam van Praag, Ingrid Verheul, Entrepreneurship and Role Models, 2011

Entrepreneurship Education and Entrepreneurship Intention

Entrepreneurship plays a very important role in a developing economy such as South Africa’s. It helps to create wealth, create jobs, increase economic efficiency and encourage technological innovation. Therefore it is highly desirable that education fosters an entrepreneurial intention among students. We can simplify this intention as the desire to start a business.

The importance of entrepreneurship education

If we look at the main traits of entrepreneurial intention we find that these are the appetite for risk taking, the person’s self sufficiency, their effectiveness, having been exposed to entrepreneurial activity and their gender^[1]. Entrepreneurship education is an important precursor to entrepreneurial activity and there is a clear link between the two.

The Global Entrepreneurship Monitor (GEM) identifies entrepreneurial education as one of the key entrepreneurship factors that enhance new business creation. The latest GEM Global Report of 2014 finds that education is a key factor in building an entrepreneurial culture, particularly the education of young people at primary and secondary levels. It stresses that entrepreneurial education at an early age is a key element in fostering an entrepreneurial attitude in later life. This is so because it enhances entrepreneurial qualities like proactiveness, innovativeness and taking responsibility for one’s own choices.

The importance of entrepreneurship in South Africa

Because South Africa is a developing economy with a high rate of unemployment, entrepreneurship is one of the main ways that people are able to earn an income and – importantly – create income earning opportunities for others. In short, entrepreneurship creates jobs. In a country with an unemployment rate that varies between 25% and 40% depending on the source of the statistics, this is vitally important.

For this reason entrepreneurship education and a higher level of entrepreneurship intention can play a major role in addressing the country’s economic challenges. Higher levels of entrepreneurship intention will see more people starting businesses, which hopefully succeed and provide increasingly more people with jobs. The ripple effect of higher levels of entrepreneurship intention is that there will be an increased number of new business ventures, leading to more job creation, which in turn leads to higher levels of economic activity, especially amongst the youth. The result is a more robust economy and a more productive society, which can ultimately reduce crime levels as well.

Entrepreneurship and education in South Africa

There are some specific skills that running a business requires, such as managerial, financial and operational skills. These are the type of skills that education needs to provide young people with, so that they are equipped to go out and start successful businesses once they have completed their educations.

While we’ve identified that entrepreneurial education has to start at a primary level, there is a need for it at a tertiary level as well. In fact the mere transition from secondary to tertiary education brings with it a whole cluster of personal characteristics that need to be developed, which are also important for entrepreneurship. Students need to be transitioned from the hand-holding and spoon-feeding that so many schools provide, to a more independent way of learning that is required at a university. With all its freedoms, students to take more responsibility for their own educational success.

Tertiary entrepreneurial education also plays a major role in entrepreneurship in the sense that a more highly educated person is more likely to start a sustainable business. This has placed further emphasis on the need for South Africa to develop entrepreneurship training programmes among the youth. The way that entrepreneurship is often expressed in South African is through people starting informal businesses. This highlights the need for entrepreneurial education, given the importance of informal businesses in the South African economy, which are estimated to contribute 20% to national GDP.

Notes:
1. Zhang, Duysters & Cloodt, The role of entrepreneurship education as a predictor of university students’ entrepreneurial intention Springer Science Business Media 2013