U.S. educators have been addressing the problem of economic illiteracy full bore since the early 1980s, spurred by demands from employers and parents appalled by the level of their children's ignorance. Today most states require at least one course in business or economics before graduation from high school, while courses in entrepreneurship, now accepted for credit in nearly all 50 states, are springing up like mushrooms. More than 700 have been launched since 1983, according to John Bebris, an entrepreneurship project director at the Center on Education Training for Employment.
But most of the programs and courses fall short, Bebris says. "They don't teach anything more than the language of business. I don't think you can do an effective program without an experiential element." What does a student gain, after all, from memorizing such terms as division of labor or opportunity cost? At best, they'll learn skills -- to value inventory, say -- but they'll have no way to see how that can matter in the real world, and no reason to care. Teaching students to conduct a market survey or write a business plan is not the same as showing them firsthand the manic exhilaration of a start-up's personal challenge; they no more taste the joys of entrepreneurship than a student in sex education experiences the joy of sex.
"To be effective, you have to let the kids take real risks -- and fail if necessary," Calvin A. Kent, director of the Center for Private Enterprise at the Hankamer School of Business at Baylor University, argues. "The usual incarceration approach to education, with a fixed curriculum, covering certain topics on certain days, with success measured on whether a predetermined outlook is achieved, just doesn't work." Entrepreneurship has "a completely different gestalt," he says, "but there is no one more resistant to entrepreneurship than an academician. When they try to teach it, it's like having a math illiterate teach calculus."
Even Junior Achievement, the oldest and best-known business-education program, fails to connect students with today's economy. True, toward the end of a semester studying Applied Economics, JA classes start their own small company -- selling stock, designing and marketing a product, then liquidating and dividing the proceeds. But all the decisions are made by the class, as a group, under the watchful direction of a teacher, with no individual risk, responsibility, or reward. JA students learn to be part of a product-development task force at a large public corporation, perhaps, but that hardly prepares them for the turbulence they'll discover in the real business world.
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A handful of educational mavericks go further, actually throwing their students into the maelstrom, but the most successful teachers operate far from the middle-class mainstream, supported as much for their social agenda as their educational intent. In North Carolina, South Carolina, and Georgia, the REAL programs -- an acronym for Rural Entrepreneurship through Action Learning -- turn classrooms into small-business incubators for the community. They help students with actual business start-ups of their own and in the process create new employment opportunities in towns hurt by the double decline of farming and textiles. A dozen businesses have been launched so far -- construction companies, printing operations, day-care centers, a tourist railroad, a hog farm, and the celebrated Way Off Broadway Deli, a favorite stop of people driving to Florida on Interstate 95. Another half dozen are scheduled to start next year. Eventually owned and operated wholly by students, each REAL business is the fruit of classwork and fieldwork that can take three years to complete. Students conduct the needs assessment, write the business plan, and raise the capital themselves -- and share, they hope, in the profits.
The 85 businesses started by Steve Mariotti's students in and around New York City have all been much smaller. Mostly sole proprietorships, with combined sales of more than $100,000, they include video-copying services and a hot-dog stand, lingerie sales, housecleaning, and a tiny rap recording studio. But Mariotti, a former Ford Motor Co. financial analyst who has spent the past two and a half years taking his message of entrepreneurship to inner-city minority students in the South Bronx and Newark, N.J., measures his success more in attitudes changed than in dollars earned.
Mariotti's targets are the students whom educators euphemistically describe as "at risk" -- the children of the projects, drug dealers, dropouts, casualties of the crack epidemic. "These children are a potential gold mine, but they've been programmed for welfare," he argues. "Business gives them back what the system has destroyed: independence and a strong self-image."
Mariotti's program is a simple one, fueled by his own ebullient commitment, mixing entrepreneurial exhortation, drills in business reading and math, and classroom explanations of profit, loss, markup, and margin. He shows them the promise of self-employment, more attractive than minimum wage at McDonald's and more satisfying than life in the drug trade. He helps each student start a company, searching for something enjoyable that can be turned to even the most modest profit. For $10.98, the price of a set of business cards, he gives students a new identity: CEO. Then he takes them downtown to the wholesale markets and turns them into merchants, giving each of them $50 from the foundation.
"You see the kids change as they begin their business," marvels Barbara Wright-Bell, CEO of the Boys and Girls Clubs of Newark. "Kids don't want to do things that are illegal -- they want to feel good about themselves. Business awakens them; it gives them a sense of purpose."
