As the start-up craze takes off, so too do tertiary courses in entrepreneurship. But are they delivering?
Nick Kissajukian expected to join a corporate or consulting firm after finishing his master’s degree, not launch a business that wants to disrupt the vending-machine industry by offering gourmet salads to shift workers and university students.
The former chef co-founded a start-up venture, HIPFOOD, last year with fellow student Lillian McHugh, after taking an entrepreneurship elective in a Master of Commerce at UNSW Australia.
“It was a life-changing subject,” Kissajukian says. “Everything was based around testing our business hypothesis on real customers and suppliers and achieving milestones.
“The entrepreneurship subject was much more dynamic and real world than other business subjects.”
Kissajukian, 24, is one of a growing number of students benefiting from a boom in entrepreneurship education. Postgraduate entrepreneurship or small-business subjects are offered in 90 per cent of Australian universities, estimates 2014 research by Tim Mazzarol, an entrepreneurship specialist and Winthrop professor at the University of Western Australia.
Mazzarol found a third of universities offer postgraduate courses in entrepreneurship or innovation through master’s degrees, graduate diplomas or certificates. About one in five universities have dedicated entrepreneurship or small-business research centres.
That is a remarkable change from a decade ago, when entrepreneurship was considered a niche field and was taught at only a handful of universities. Although not yet mainstream, the number of entrepreneurship courses is rapidly growing and they are more likely to be chosen by students who would have taken general management degrees.
“Every university in the world is thinking about how they expose more students, across more disciplines, to entrepreneurship,” says Colin Jones of the University of Tasmania’s Innovation Research Centre. “They recognise that it is too important to be seen only as a business subject.”
The response is extending beyond courses. More universities are launching incubator or accelerator programs to help students commercialise ideas, providing better access to seed funding, bolstering technology-transfer offices, and expanding business planning competitions. The goal is a stronger entrepreneurship ecosystem, greater capacity for commercialisation and to turn student and staff ideas into fast-growth ventures.
Organisations no longer safe havens
Melbourne University received $10-million last year from tourism entrepreneur Peter Wade to create the Wade Institute for Entrepreneurship at Ormond College. In 2012, the University of Sydney Union developed its Incubate program to accelerate campus start-up ventures.
Swinburne University of Technology plans an innovation precinct that will house start-up ventures on campus. And UNSW will launch the Michael Crouch Innovation Centre in mid-2015 to nurture entrepreneurship and build links with business.
Other universities are also boosting their capacity for multi-disciplinary innovation and entrepreneurship, or launching specialist postgraduate degrees, such as Macquarie University’s Master of Social Entrepreneurship.
“The entrepreneurship education boom is still in its infancy in Australia,” says Per Davidsson, a noted researcher at QUT Business School. “Students recognise that large organisations are no longer a safe haven for employment, and that they need skills to work across businesses and industries, for themselves or others.”
Other factors are driving the trend. The biggest is a changing economy as the resources investment boom fades and traditional industries struggle. A more vibrant, innovative economy needs a larger base of skilled entrepreneurs who can commercialise ideas and develop new markets and ventures.
Universities have recognised that students must be capable of creating their jobs, not only applying for them, as the graduate recruitment market weakens and large companies shed management layers and outsource more white-collar jobs; and that the sector must be a stronger source of new-venture creation.
Rising student demand is another driver. As technology makes it faster and cheaper to start a venture, postgraduates want entrepreneurial education that helps them test low-cost ideas in the market.
The final factor is the media’s greater attention. Cynics contend some universities are cashing in on the hype by launching specialist undergraduate or postgraduate subjects, or reconfiguring their MBA programs to add or deepen an entrepreneurship specialisation.
“Among universities, there are the purists that have developed their entrepreneurship programs over many years and others going along for the ride,” Jones says. “A great deal of entrepreneurship education is still being done from a textbook and taught in a traditional way that does not work. Students need to think carefully about entrepreneurship courses; their quality and commitment can vary.”
Can entrepreneurship be taught?
Swinburne’s Alex Maritz says entrepreneurship specialisation within an MBA can be a poor choice. “Too much entrepreneurship education is being taught in the wrong places by the wrong people. MBA programs typically do not have the depth of teaching and research expertise in start-up entrepreneurship.” Maritz leads a national project to develop entrepreneurship learning standards and outcomes.
Jack Delosa, a 27-year-old entrepreneur with an estimated $25-million fortune, according to the 2014 BRW Young Rich List, argues universities are the worst places to teach entrepreneurship. He dropped out of university after three months, because it was “too slow and outdated”.
Delosa says: “Entrepreneurship skills can be learnt, provided the individual has the right traits needed to launch and grow a start-up: a capacity for hard work, hunger to succeed, high-risk appetite and ability to operate under stress, to name a few.
“But universities, by virtue of their size and bureaucracy, are unable to change at the same rate as the global start-up community. How entrepreneurs raise capital today is different to five years ago, for example. Yet universities often teach models or theories that are several years old.”
Another problem, Delosa says, is a lack of entrepreneurial spirit within universities. “Entrepreneurship education is uncharted territory for most universities, which are risk averse by nature.”
The lack of practical courses encouraged Delosa to start The Entourage, an entrepreneurship network and education venture, in 2010. The business has 73,000 members and describes itself as Australia’s largest education institute for entrepreneurs.
Delosa, of course, has a commercial imperative to question academic entrepreneurship education, but the success of The Entourage and other education-based businesses, including BSchool, indicates demand for vocational-style business training outside universities.
Patrick Grove, co-founder of Catcha Group, iProperty Group and iCar Asia, says key skills needed in fast-growth ventures cannot be learnt at university. BRW estimates the 39-year-old has a $344-million fortune.
“Anyone can be taught the basics of setting a vision, building a team, producing a budget and getting on their way to achieving it,” Grove says. “But I don’t believe the discipline, perseverance and mental strength to become a world-class entrepreneur can be taught.
“Surviving and thriving when you have no money left in the bank and the end looks near, is a skill few possess. Taking a small idea and having the courage and guts to build a world-class billion-dollar business is not something you can read in a textbook and copy.”
Innovation experts also question whether universities are equipped to help students develop high-level commercialisation skills. “I would never employ someone simply because they had a master’s in entrepreneurship or innovation, or an MBA for that matter,” says Terry Cutler, the principal of Cutler & Company and president of CSIRO Chile.
“Innovation and entrepreneurship are quintessentially about experimentation, trial and error, and learning in the real world. You can’t develop those skills in a classroom.”
Entrepreneurship is a young, emerging field. It does not have have a body of academic research or empirical evidence underpinning its teaching, compared with management, economics or other disciplines. Also, it is still not clear whether entrepreneurship is a discipline in its own right, or a subset of management education.
That is an important distinction. Some universities see entrepreneurship as a philosophy or way of thinking that can be applied across disciplines. Others see entrepreneurship education as providing a set of tools within general management training.
There is also debate over how achievement in entrepreneurship programs should be measured. A frequent criticism is that university courses produce few students who launch ventures that succeed, relative to the number of students in the courses.
On the other hand, it can be argued that good courses discourage students from launching bad ideas and provide general skills that boost student careers.
Also, viewing entrepreneurship education as a mechanism for new ventures may be too narrow. The big potential is, arguably, corporate “intrapreneurship”, not new-venture start-ups. As large companies grapple with the pace of change, they need managers who embrace uncertainty, will disrupt markets and can create value with scarce resources. At its core, entrepreneurship is about managing in conditions of extreme uncertainty.
Allan O’Connor, of the University of Adelaide, who leads its entrepreneurship and innovation programs, says managers from large organisations are showing greater interest in entrepreneurship education.
“Historically there have been three types of students: those doing a master’s after their undergraduate degree; those who started ventures, struggled, and decided to upgrade their skills at uni; and accomplished entrepreneurs who want to validate their learning, O’Connor says.
“Now we are seeing more corporates recognise they need to do things differently, and have managers who think differently.
“An MBA helps you configure resources in an established organisation. An entrepreneurship degree helps you configure resources that you might not yet control, for an organisation that might not yet be established. This type of thinking can be very powerful for large companies that have to create new markets.”
Those who are critical of university entrepreneurship education may be overlooking emerging trends. UNSW’s Martin Bliemel, who is at the forefront of new teaching methods in entrepreneurship, says: “Universities are really changing how they approach entrepreneurship education.
“Everything in my course is about validating ideas in the market with real customers, suppliers and distributors – hands-on immersion in entrepreneurship, learning by doing and getting students out of the classroom to test ideas.”
Kissajukian was a Bliemel student and validated his idea in the market while at university before launching HIPFOOD. “We saw a problem where people who work or study late could not get fresh, nutritious food,” Kissajukian says. “So we built a business model around stocking vending machines with salads, replacing them every 24 hours and giving leftovers to food banks. We want to redefine how people see vending machines.”
HIPFOOD is finalising negotiations for its first vending machine to be installed at a large Sydney hospital and plans a national rollout in the next few years.
Kissajukian has come a long way from the 14-year-old who started washing dishes. “I always wanted to run my own business, having run kitchens,” he says. “But I didn’t know where to start. The entrepreneurship course gave me structure and a path to progress the idea … And even if you don’t start a business, you get a great perspective on how new business works.”
Tony Featherstone has lectured in entrepreneurship at Swinburne University of Technology and is a graduate of its Master of Entrepreneurship and Innovation program.