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Don’t Expect Entrepreneur Programs to Spur Local Growth

College_GraduatesEntrepreneurship programs at colleges and universities may be a good way to prepare young adults for someday starting a business. But they’re a lousy way to stimulate the local economy — as some schools clearly hope.

That’s what Case Western Reserve University entrepreneurship professor Scott Shane says. He writes on SmallBizTrends.com that schools are misguided to think that adding an entrepreneurship program or major will lead to more business formation in their communities. He lays out several reasons.

1. Venture-capital activity is heavily concentrated in places like California, New York, Massachusetts, Texas and Washington — not spread evenly across the U.S. like entrepreneurship programs are.

2. Few recent college grads start businesses straight out of college. He cites Census data from 2002 showing two-thirds of all businesses were started by people between ages 35 and 54, while a tiny fraction (.05%) were started by someone under age 25.

3. Most grads leave their college town and start businesses wherever they happen to be working.

4. Most entrepreneurial skills, Mr. Shane says, are learned “by doing” and working at other jobs. So entrepreneurs need other businesses in a community to groom their skills before launching their own. “Most students have little of the relevant work experience necessary to help entrepreneurs to start successful companies,” he says. Readers, what do you think of his argument? Do you think entrepreneurship programs can help bolster entrepreneurial activity in a college town?

Photo: Getty Images

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    • While Professor Shane’s arguments may hold merit for some schools and college towns, they should not be taken as a hard rule. Schools can do more to encourage young entrepreneurs to stay in the community; take, for instance, the Innovation & Entrepreneurship program at Clark University in Worcester, Massachusetts (http://www.clarku.edu/departments/ie/). As part of the I&E capstone class, students are required to execute a business idea- many students use that class to actually launch a business while still in school ; the result is that after graduation they remain in Worcester to run their new businesses. Two examples of this are Vicky Mariano, who started the Spiritual Haze café (www.SpiritualHaze.com), and Allison MacHaffie, who opened a solar energy consulting business, Grenergy (www.GrenergySolarStore.com). Allison and Vicky graduated this past semester from Clark, and though both are not originally from Worcester, they plan to remain involved in the community as small business owners.

      If more entrepreneurial programs were to look beyond the conventional, many would find opportunities to encourage local community growth, as Clark’s I&E has done.

    • Prof. Shane is right as far as he goes in his argument, but his approach belies the nature of changing the world (to borrow a phrase from Guy Kawasaki’s excellent blog “How to Change the World”). It takes time. Further, as the Kauffman Foundation convincingly argues in its recent report,Entrepreneurship in American Higher Education, entrepreneurship is “a dominant force in contemporary America”, and, thus, ought to be included in contemporary college curricula. http://www.kauffman.org/item.cfm?item=1132Besides, why not? And remember, many local colleges cater to non-traditional students who fall right into the demographic sweet spot Dr. Shane mentions.

    • I agree it’s not easy for students or those just out of college to start a business, especially one that’s going to employ other people. However, I am seeing the Entrepreneurial Center at Washington University in St Louis expand its program to help start-ups in the community also. So even though I went to Wash U 15 years ago and then took a job as an investment analyst, I am now at the point where I can start a company, and their current program is helping my start-up, http://www.claroconnect.com which matches individuals to unique financial advisors.

    • I was a student of Peter Burns’ at ASU, who commented above. I started my first business at age 20, as an eBay retailer selling DVDs, being recognized as one of the world’s largest eBay retailers just 18 months after starting. After participating in Peter’s class, I realized how much potential I had as an entrepreneur and went on to start 4 more companies in the next two and a half years. I started my own publishing company to publish my first book, “eBay Millionaire or Bust” while simultaneously launching a software company to support eBay sellers. After that, I actually partnered with my Professor and started Club E Network and The eFactory, two major initiatives that are enhancing the lives of entrepreneurs around the country. So, while I’m sure every student will not experience the same results I have, I am living proof that entrepreneurship education has enhanced my life and has very clearly led to the formation and growth of multiple businesses in a short period of time.

    • I started my first business at age 19, as a direct result of an entrepreneurship class at college (UVa.)…32 years ago. That jump-started an entrepreneurial career that has resulted in over 100 business start-ups. Three years ago, I taught my own brand of entrepreneurship as a pro bono Adjunct at Barrett Honors College (ASU), where my youngest daughter attended. That first class of 19 students resulted in 5 actual business start-ups, one of which, Club Entrepreneur, has turned into a thriving nationwide organization (www.clubenetwork.com). Another start-up, in the engineering field, promises to become a successful niche market leader in its field. http://www.thecpaandlegalnetwork.com. Still a third start-up from the class, recently morphed into yet another very promising enterprise (www.clubefactory.com) and the list goes on. That first teaching effort resulted in four classes the following semester with 94 students and numerous business plans transforming into business start-ups. I approached ASU’s School of Business to help me embrace this burgeoning entrepreneurial movement and when their petty academic minds dismissed me as a “non-academic,” I took my plans for my own College of Entrepreneurship to the private Phoenix-based Grand Canyon University, where in January 2007, we opened the first fully-accredited, stand alone College of Entrepreneurship in the U.S. Not six months later, Fortune Small Business Magazine picked our new College of Entrepreneurship’s online program as #2 out of the top 5 such programs in the country. Since then, I have started another such College of Entrepreneurship at Southern States University in San Diego and plan to open up over 100 such schools across the country in my effort to combine education with entrepreneurship in a way that truly works. Check out http://www.instituteforentrepreneurship.com to learn more about my work in this field.

      So, my friends, I can honestly say that my experience shows very definitively that a college program in entrepreneurship that is taught by Adjuncts who have actually practiced the craft, can and will produce significant benefits for both the regional and national economies.

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