Dr Jeff Cornwall

Bruce Schierstedt called my attention to a post at Small Business Trends written by Scott Shane.  Scott, who is a professor of entrepreneurship at Case Western Reserve in Cleveland, suggests that support for entrepreneurship education is being made for the wrong reasons:

To me, the right reason to support entrepreneurship programs at universities is because educating students about this topic is valuable to them in the same way that teaching them physics or art history benefits them. The wrong reason to support university entrepreneurship programs is the belief that these programs will enhance economic growth in a region.

There is little evidence to suggest that either the quality or quantity of university entrepreneurship programs in an area does much to affect high growth start-up activity.

His post goes on to offer data about venture capital backed firms vis-a-vis universities and university students.

He clearly is looking at this issue too narrowly. 

First, university programs at many schools have taken a hard shift away from only focusing on venture capital backed firms.  While academics like the complexity of these deals, there has been an awakening — too late in my mind — to the fact that VC backed firms are only a very small part of entrepreneurial activity.  VC backed firms are only s small fraction of a percent of start-ups in the US.

Second, economic growth does not only come from VC backed firms.  This is a mistaken assumption not only made by universities, but by chambers of commerce and local governments across the country.  Data from the SBA show that about 78% of all new jobs created in the US over the past two decades come from small businesses.

Third, the worst thing we can do as professors of entrepreneurship is to only look at entrepreneurs as interesting subjects to study and ponder about.  We need to create runways in our universities to help students launch and accelerate their businesses while in school. These runways are made up of experiential education both inside and outside of the classroom. 

Finally, we need to focus on batting for average and stop swinging only for homeruns.  I love to see my students and alumni create businesses that add two, five, or twenty good new jobs.  With hundreds going through our program over a few years this kind of activity will create real economic growth.  And every once in a while we will connect with a homerun business that creates hundreds of jobs.  But our focus should be on the breadth of our economic impact.