David Miller is author of Campus Entrepreneurship, one of my favorite blogs ((and it is, of course, on the blogroll here); he’s also finishing up a Ph.D. in business with a thesis focusing on entrepreneurship. I read his blog every day. So when he asks “Does Entrepreneurship Education Lead to More Startups?”, he has my attention.
He cites a Wall Street Journal piece exploring new research by Paul Kedrosky and Dane Stangler for the Kauffman Foundation, looking for links between gross numbers of startups and a number of factors, including a boom in entrepreneurship education. Here’s the active quote:
The late 1970s to early 2000s “experienced a veritable explosion in efforts to promote and increase new-firm formation,” the authors write, pointing out that more than 2,000 universities offered entrepreneurship courses in 2005 compared with 200 in the late 1970s. At the same time, the amount of capital raised by venture firms rose to $100 billion in 2000 from $424 million in 1978, all while the levels of startup formation remained flat.
It’s quite a question: Why is the number of startups constant since the 1970s, despite all this attention? Even the dot-com boom and what seemed like a big social fashion trend for entrepreneurship, in the late 1990s, apparently failed to change the gross numbers of startups.
I like research that asks important questions and fails to answer them. No, that’s not me trying to be ironic; seriously, I do. I think a lot of the most important questions we have can’t be answered with numbers because it’s too hard to find the right target population and get the right questions answered truthfully. That doesn’t mean, however, that we don’t try.
The study recognizes some built-in problems, which David summarizes:
More questions: Are new firms the correct variable to measure? Are all startups equal? What about job creation? Is that really what we are after here? Or living standards and incomes? Lots more questions to be investigated surround entrepreneurship education and new-venture creation.
Yeah, agreed. Startups are so many different things to so many different people. Size, scale, seriousness, and motivations for startups go all over the map.
My follow-up question is: Does it matter? Was the boom in entrepreneurship education conceived by some powerful hand as a means to increase startups in the economy? I don’t think so. I think there’s so much more teaching of entrepreneurship because there are that many more people interested in taking those classes. And I think teaching entrepreneurship is about improving the lives of the students who want to learn about it.
Tim Berry is the founder and chairman of Palo Alto Software and Bplans.com. Follow him on Twitter @Timberry.
