How can entrepreneurship best be promoted?

Jobs & Society Sweden May, 18, 2015Benson Honig, Teresa Cascioli

Chair in Entrepreneurial Leadership,

McMaster Universitybhonig@mcmaster.ca

Can Entrepreneurship be Taught?

Consider…..ArtistsMusiciansDancersSingersEntrepreneurs

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Reframing Problems Before 1543 people believed that the sun and all the planets

revolve around the earth. It was obvious! Copernicus is still remembered

Violinist Joshua Bell was ignored in the DC metro. Kodak created the easy-use camera and film. They also

invented digital. They failed to open their frame to this new technology.

Netflix began delivering DVDs of movies by mail. It framed its goals more broadly as the movie-delivery business, not just the DVD-delivery business. When technology allowed online delivery of movies, it was poised to dominate in this new arena, too.

Creativity, Innovation, Ingenuity

Some exercises may be effective to teach ‘out of the box’ thinking– But – if everyone could easily do it, it would not be out of

the box! Competitive pressure may add to solution finding –

particularly when the possibility of an option is known. Simulations, Jagaard, Apollo 13

Research Record on Teaching

Entrepreneurship education and training (EET) growing rapidly, globally

Yet, no conclusive evidence that EET is helping to create more or better entrepreneurs– Despite dozens of studies in past several decades– Literature has shown conflicting results, with

methodological problems and inconsistent theoretical grounding

What Does Entrepreneurship Education Research Say?

• Does EET provide entrepreneurial outcomes?• WHAT are we trying, exactly, to teach?• Literature shows intentions increased, but, self selection bias a huge

problem• Some weak indications EET enhances startups, but only Souitaris is

comprehensive • Of 42 studies, 31 failed to include pre and post measures and control

groups – only 6 had random assigned groups!

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What kind of research is done?

.

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Learning TheoryPiaget, intelligence and learning take place in

evolutionary stages, called structural evolution, resulting in adult cognition

Equilibration is how we create a balance between the environment and existing circumstances.

We respond according to our assimilation (analytical tools), unique experiences necessitate accommodation (minor changes in our cognitive structures)

intellect develops as we attempt to achieve a balance between ourselves and the environment

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What To Teach?Entrepreneurship, virtually by definition, demands practical as well as theoretical instruction

Drawing on Piaget’s theory of equilibration entrepreneurial should prepare an individual for disequilibrium, as well as failure, stumbling, and “chipping away at reality” in order to assemble a usable model that helps explain current circumstances.

This requires a student to experience the discomfort of failure – essentially, to “inoculate” them in preparation for failure (Sitkin, 1996).

Accomplished through simulations, or through practical experience

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Instruction on how to write anEntrepreneurial Business Plan

Entrepreneur completes a business plan

Entrepreneur creates a new organization (firm,etc…)

A conventional view of business planning and business education

Method:Solutions based on convergent thinking

Outcomes:Analytical tools(cognitive factors)

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Cognitive team experiences result in a series of learning opportunities based on failure

Students learn to maximize failure as a learning experience

Students are more prepared for entrepreneurial events after they graduate

Method:Solutions based on convergent thinking

Outcomes:Self confidence (personal

properties)Risk tolerance (motivation)Leadership and

managerial experience (cognitive factors)

An experiential model of education: Simulations

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Contingency planning instruction provided for each module

Yes:Bi-passModule XImmediately pursue opportunity

Yes: Step #1Select one of the modulesEx: Marketing research market A

Modify and adapt?

Continue as before?

Select any module, proceeding thorough flowchart from START

marketing module A

production module B

development module D

financial module E

human resource module F

Method:Solutions based on divergent thinking

STARTShould opportunity be pursued?

Outcomes:Self Confidence (personal properties)Risk Tolerance (motivation)Leadership and Managerial Tools (cognitive factors)Practical solutions to new problems (cognitive factors)Organizational development tools (cognitive factors)Evaluation tools (cognitive factors)

Abandon

Step #2 Select next moduleReturn to START

EvaluationEvaluate Progress

Continue as before?

Modify and adapt?

Abandon

NoAbandon

YES

YES

NO

Critical for promotion is an experiential mode of education

Students consult with actual problems, conduct research, identify alternatives, support their decisions.

Requires networks and linking between practice and theory Providing theory at the start of the class is essential for this model to

work effectively. Students have learned if they learn they are unlikely entrepreneurs –

making accurate research difficult Honig, B.(2004) Entrepreneurship education: Toward a model of

contingency-based business planning. Academy of Management Learning and Education Vol 3(3):258-273

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Model 1

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Model 2This model targets individuals with a certain

level of prior entrepreneurship experience

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Feedback

Feedback

Feedback

*This model targets individuals who are currently running their own businesses

. This model targets senior’s who want to start businesses after retirement

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Assumption underlying Business Planning

Goal setting theory -> business planning Business planning -> performance Formalized business planning ->

performance Change business planning ->

performance

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Institutional sources, institutional pressures, and business planning behavior

Government agencies

Industrial field

Educational system

NormativeMimeticCoercive

Human CapitalSocial CapitalDemographic

Variables

Survival Profitability

Institutional sources

Institutional pressures

Performance outcomes

Control Variables

Writing a business plan

Institutional behavior

H1 H2 H3

H4

H5

What does NOT work? Benson Honig. McMaster University. Hamilton Ontario Canada* Mikael Samuelsson. Stockholm School of Economics. Stockholm. Sweden

Findings: NO relationships between planning and any time of performance – measured from 12 months to 10 years

What does work?

Social capital and network building Tacit human capital (experiential learning) Establishing role models, mentors, and

community support Life-long learning – life-cycle learning