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Can Entrepreneurship be taught?

May 9, 2010

Photo: IIPC.

[a preview of an upcoming post through my work with the Young Foundation]

I work at the Learning Launchpad at the Young Foundation, and we support entrepreneurial ideals to drive change and innovation across the UK education landscape—all centered on building the (hard and soft) skills necessary for young people in their transition to adulthood.  Many projects we support focus on driving entrepreneurialism among youth themselves, through enterprise education or projects that get kids to learn by doing.

So I’ve always been curious about this idea—can we teach entrepreneurship?  Many seem to think so, as shown by the fever to support entrepreneurship by young people, as well as the poor and marginalized across the world.  It started with Muhammad Yunus and microfinance, and now translates into a wide range if initiatives supporting entrepreneurship in the developing and developed world.  In the global South, initiatives to promote youth entrepreneurship particularly hits at the heart of building resilience, promoting inclusivity among the unemployed, while also promoting more robust economic growth.

But the same question keeps plaguing me amongst the growing enthusiasm for this idea. Can anyone really be an entrepreneur? Can entrepreneurship be taught? Can young people’s aspirations for employment or better livelihoods be met via entrepreneurship? Amongst the growing enthusiasm for supporting entrepreneurship is a paralleled skepticism, arguing that not all of the poor, marginalized, or excluded can in fact be entrepreneurs.

Recent studies have shown that the social-cultural-political context within a country must foster the environment and the capacity for entrepreneurship. Indeed, there are skills and motivations necessary for success.  Theories of motivation and entrepreneurship argue that in the early stages of child development, people learn curiosity, creativity and independence that increase the likelihood of engaging in innovative activity (Nafziger 2004). Society may consciously nurture imagination and self-resilience through child rearing and schooling, particularly among those with a high need to achieve.  The skills and motivation needed for creative destruction, where a new, more efficient idea outcompetes an old one must be built.  A study of 21 nations found that training and a strong education base is needed to convert a market opportunity into a commercial enterprise (Reynolds 2000).  Not only is a talent pool necessary, but also functional skill in marketing, finance, product development, managing risk, and building a team is hugely important (Lal 2005).

So clearly a good educational landscape, strong competition, and skills foster entrepreneurship. Yet this begs the question, particularly in resource poor areas—can entrepreneurs be made?

Arguably, there are a huge number of factors that inhibit the growth of entrepreneurship, particularly among the poor and marginalized across the world.  Max Weber even accounted for the growth of entrepreneurialism in the West to the “Protestant work ethic,” where particular values serve as a precondition for the development of entrepreneurialism.  But Schumpeter had another theory—he argued that marginal individuals are more likely to be entrepreneurs; particularly those that are deviant, that break tradition, or that oppose their social communities.  Lower status groups are entrepreneurial because they have the will to overcome social grievances through economic creativity and venturing.  Entrepreneurship is often born out of hardship, after overwhelming events of war, political and religious prosecution, or loss of employment.  Entrepreneurship is often driven by negative events, by those that are displaced in some way.

As such, resilience, particularly amongst those that face hardship, is as valuable as tangible skills.   Entrepreneurship can be not only a place to build a livelihood, but a space for empowerment. Yet resilience too, must be fostered among young people or marginalized individuals.  It is not a substitute for a lack of access to credit, let alone a better education, better governance and health, and so on.  The potential for entrepreneurial activity may indeed increase once you break into a certain realm of opportunity—and strategies for bottom-up development of entrepreneurs may  be another excuse to reshuffle the deck chairs on the Titanic, ignoring the root causes for why people stay poor, or why they engage predominantly with informal sectors.  The need for resilience and to take risks implies a real cost to being an entrepreneur, that cannot be wished away. These costs weigh heavily on those without the savings or the capabilities to mitigate them. Many poor entrepreneurs struggle to pay back loans, have diverse needs to meet, and have very few resources to fall back on.

But I can easily see why there is so much excitement to export strategies for enterprise education across the global South, or to poorer regions of the developed world.  It’s exciting, its innovative, its hands-on, it involves problem solving.  And there are a lot of success stories. Yet it might be good to remember again the context for success and the costs of failure.

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One Comment leave one →
  1. Dan Kyba permalink
    May 13, 2010 10:53 pm

    Yes, entrepreneurship can be taught, but more by ‘learning by doing’ than in the classroom. If one comes from an entrepreneurial family or society, then the chances of success by a young would-be entrepreneur are higher than for the one who does not have access to the financial, human and social capital that entrepreneurial family and social networks can provide. Furthermore, the chances of success increase as the would-be entrepreneur gets older and has had time to assimilate the required basket of financial, managerial and marketing skills and networks.
    I observed in the South Pacific numerous NGOs with their entrepreneurship programmes that sometimes amounted to little more than a one or two day training session. For the young school leavers especially who accessed such programmes, what happened at times was the creation of false hopes later dashed by bitter reality.
    Entrepreneurship is bloody hard work, so if one does not have access to the cushier ways of earning a living, then it becomes the only realistic life option – if the aforementioned networks are there to support you. So Schumpeter has his point.
    I do not recall the reference, but I recall reading that the extreme risk-takers have a greater chance of being successful innovative entrepreneurs than those who diligently did their market research. The latter were generally regarded as being better off as replicative entrepreneurs.

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