By Andrew Maxwell
In the past few months, several people have asked me about the purpose of educating entrepreneurs. They identify research that suggests entrepreneurs are born and not made, and question the purpose of education if this is the case. They point out that entrepreneurs have inherent traits that cannot be taught, and question both the approach to entrepreneurial training and its benefits.
Immersed in this issue because of my long involvement in teaching entrepreneurship, I was initially surprised by the question. However, as I thought more about it, I realized that answering it thoughtfully would both help explain how entrepreneurship should be taught, and the benefits that can be derived from training entrepreneurs.
First, lets start by identifying that there are certain traits that seem to be common to all entrepreneurs, such as the need for achievement and willingness to take risks. While these traits are both a function of DNA and family/social environment, it is evident that they affect entrepreneurial orientation and intention from an early age.
Before discussing these traits, lets discuss two other entrepreneurial characteristics that seem to be linked to an entrepreneur’s likelihood of success: relevant experience and capability. It is often said that entrepreneurship is a “contact sport”. Certainly there is significant evidence that entrepreneur’s are more likely to be successful if they have been involved in previous entrepreneurial ventures, or started ventures themselves. Entrepreneurs are also more likely to be successful if they have existing knowledge of the technology or the market in which their proposed venture will operate. Entrepreneurs, who have had the chance to learn from their own experience and the insights of others, find such experience to be very useful when faced with the many challenges of running their own venture. One way of training entrepreneurs is to give them the chance both to gain relevant experience and reflect on it in a learning environment (a good example is the co-operative placement programme at the University of Waterloo).
While inherent capability is also something an individual is born with, many basic entrepreneurial skills can be taught. At the business development level, these skills include the development of business plans and cash flow statements, while at the personal level this can include training in time management, project planning, and making presentations.
In addition, there are some basic knowledge components, which can help increase an entrepreneur’s likelihood of success, such as how to file a patent or complete a market survey. Most of these skills are the ones we focus on when we teach entrepreneurship courses. While they cannot make an entrepreneur out of someone who does not have the basic traits required, they can certainly help an entrepreneur who has the required traits to increase their likelihood of success.
Finally, acknowledging there are certain inherent entrepreneurial traits suggests that education cannot modify entrepreneurial behaviors. However, there are important aspects to entrepreneurial traits where awareness can help the entrepreneur increase their likelihood of success.
Some of the most common entrepreneurial traits include: high levels of confidence, enthusiasm, and passion for the venture. There is no doubt that these are all prerequisites for entrepreneurial success. However, there is evidence that excess amounts of these same traits (such as over confidence) can reduce the objectivity of the entrepreneur’s decision-making, which can in turn reduce the likelihood of venture success.
It would seem that the same traits that are important in moderation for an entrepreneur could actually become his or her Achilles Heel. Helping an individual entrepreneur understand these potential issues is another important role for entrepreneurial training. Entrepreneur’s aware of these issue can either find individuals with complementary traits to join their venture team (as co-founders, senior managers or board members) who are able to moderate the entrepreneur’s pre-dispositions. Alternatively, the entrepreneur can try to build in some self-control (such as wait 24 hours before sending an important email), which can enable him or her to have second thoughts about important issues.
Providing some ideas into how entrepreneurship education can help entrepreneurs also answers another strategic question I was recently asked: if most entrepreneurial activities fail, what is the point of encouraging entrepreneurship through increased levels of entrepreneurial education.
I think that there are two important answers.
The first is that the impact of entrepreneurial activity on regional wealth creation is often understated. Entrepreneurs are the engine of wealth creation and are able to react quickly to new opportunities, based on market or technology changes. Entrepreneur’s who react fastest to these opportunities, often have the greatest chance of long-term success, suggesting that showing them how to identify opportunities and assemble the required resources is critical.
Second, there is no doubt that many entrepreneurial activities fail, this is not a reason to reduce the number of entrepreneurs, but a driver for increased education that teaches entrepreneurs, not about entrepreneurship, but about how to increase their likelihood of entrepreneurial success, by reducing their likelihood of failure. Enhancing entrepreneurship education, by helping entrepreneurs understand potential causes of failure, based on their own personalities as well as market and technology issues will increase the percentage who achieve success. In turn, this will stimulate more individuals with entrepreneurial traits to consider starting and growing their own ventures, and reaping the rewards.
Andy is currently working at the Canadian Innovation Centre and pursuing a Ph.D. in the area of new venture creation at the University of Waterloo. In his spare time, he enjoys teaching technology entrepreneurship at UTM and the University of Waterloo.
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