Rise of the Entrepreneurial Class
Five years ago, Jim Poss, a 28-year-old environmental studies grad from Duke University, was determined to make a living in renewable energy -- he had the science and the passion, and a vague idea about selling geothermal energy. What he didn't have was the slightest clue about starting a business. So, he enrolled in Boston's Babson College, taking a 12-month intensive program that puts students through the rigors of launching a new venture.
This year, Seahorse Power Co., a business Poss started at Babson which manufactures and sells solar-powered trash compactors, is poised to break $1 million in sales with customers from New York to Sydney, Australia.
"My business plan today really hasn’t changed from when I wrote it at Babson," Poss said. "I totally owe it to that program for getting my feet solidly on the ground."
That kind of success -- on top of a surge in the number and size of endowments from wealthy entrepreneurs -- is sparking a boom in entrepreneurial education at business schools from coast to coast. In the early 1980s, only 300 universities in the U.S. offered courses in small business and entrepreneurships, according to a survey released in June by the Indiana University's Johnson Center for Entrepreneurship and Innovation. Today, there are over 2,200 courses available at over 1,600 schools nationwide, complete with 277 endowed faculty positions, 44 academic journals, and nearly 150 research centers, the survey found.
The average age of the entrepreneurial programs in the survey was 8.3 years and every single one reported employing full-time faculty with real-world experience starting or running a small business. Several programs also reported having more than $10 million in endowments, the study found.
In all, there are now 18 university departments devoted full-time to teaching entrepreneurship, twice as many as there were just seven years ago, according to the Ewing Marion Kauffman Foundation, with tuition for multi-year programs ranging from $10,000 to more than $35,000 a semester.
One of the first was Wharton Entrepreneurial Programs at the University of Pennsylvania, which was launched in 1973 and today consistently ranks among the nation's top rated schools. The school's star-power alumni include Robert B. Goergen, J.D. Powers, and Donald Trump, to name a few.
Like many emerging programs, the school's broad curriculum encompasses such areas as global wealth creation, technology entrepreneurship, venture capital and private equity, enterprising families, regional and national entrepreneurship, and corporate venturing.
Mark Rice, a dean at Babson College, said part of the rise in popularity of these programs reflects a broader increase in new economic activity globally, but also a growing sensibility that entrepreneurship is driving job growth and the U.S. economy like never before. It doesn't hurt that successful entrepreneurs are more willing to set up wealthy endowments for programs they feel teach real-world, start-up experience, he said.
"By and large, business schools have long had the mentality that they're training managers for big established firms," Rice said. "But if you ignore new product and market development you're missing the boat."
Despite the proliferation of courses and programs, Rice said, there's still no standard curriculum among top business schools for entrepreneurship studies.
Seventy-five percent of the program directors in the Indiana University survey said their programs have a strong academic focus, rather than a how-to approach geared towards existing business owners.
On top of basic management skills and other traditional business school topics, most entrepreneurship programs often include courses in recognizing business opportunities and market conditions, raising venture capital, marketing new products, and building an organization from the ground up.
At Babson, which began offering entrepreneurship classes 25 years ago, course work is coupled with hands-on projects where faculty and local business owners help students develop effective strategies to launch their own businesses.
"Basically, they're learning how to take an idea and turn it into a product people will buy," Rice said.
For Jerome Engel, the executive director of the Lester Center for Entrepreneurship and Innovation at the University of California Berkeley's Haas School of Business, an entrepreneurship education is a very direct way for students to "learn how to turn their insight into action."
To do that, entrepreneurship programs offer a supportive environment to test-drive and refine innovative business ideas, he said.
"You can do research into course work that directly applies to your business idea. Most schools have a business incubator or an office space to start it and provide network relationships. These things are very, very helpful," Engel said.
The Lester Center currently has 20 adjunct faculty offering 15 entrepreneurship courses, including studies and workshops in venture capital, technology enterprises, and social entrepreneurship.
Also on the west coast, Stanford University's Center for Entrepreneurial Studies, which recently marked its 10th anniversary, now boasts 16 entrepreneurship courses within the school's MBA program, including three key courses on evaluating entrepreneurial opportunities, building and managing professional sales organizations, and managing growing enterprises.
But are graduates of these programs really any better off than non-degree holders?
According to Rice, about half of the projects that get started in Babson's Entrepreneurship Intensity Track turn into viable businesses after graduation.
At the University of Arizona, a 2003 study found its entrepreneurship graduates were three times more likely to be self-employed than general business graduates, based on a survey of more than 500 graduates.
Overall, researchers concluded, an entrepreneurship education increased the chances of graduates owning their own businesses by 11%, relative to those in non-entrepreneurial programs. What's more, the study also offered strong evidence that entrepreneurship education in general fueled risk-taking, innovation and the formation of new ventures, while contributing to the growth of smaller firms and technology transfers.
It also tends to boost graduates' income and job satisfaction -- just ask Jim Poss.
"I love what I'm doing now, and I wouldn't be where I am without that program," Poss said.