Enabling Entrepreneurship
in Local Societies and Markets:
SHIFTING THE EDUCATION PARADIGM
S. Venkataraman
The Darden Graduate School of Business Administration
Samuel L. Slover Research Professor of Business Administration
Research Director, The Batten Institute
Entrepreneurship Education:
Essence of the Problem
ASPIRATION:
Create economic and social value through entrepreneurship
POPULAR MEANS:
Provide entrepreneurship education to youth
POPULAR EDUCATION APPROACH:
• imitate best U.S. and European educational practices
• import content
• import experts from developed countries (especially U.S.)
PROBLEMS WITH THE POPULAR APPROACH:
• inappropriate content
• inappropriate methods
• inappropriate “experts”
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Entrepreneurship Education:
Essence of the Problem (cont.)
THE RESULT:
Local entrepreneurs are set up for limited success because the popular
education approach ignores their reality, context, and cultural beliefs
and frameworks.
THE SOLUTION:
Entrepreneurship education must be customized to incorporate an
emerging market’s environment.
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The Reality of Entrepreneurship Education
Ignores Local
Ideology and Paradigms:
Broader social status of
entrepreneurship
Ignores Local Context:
“Experts”
Underdeveloped tangible and
intangible infrastructure
for entrepreneurship
Entrepreneurship
Education:
Methods
Imitates the U.S.
and Europe
Content
Ignores Local
Entrepreneur’s Reality:
Limited financial capital must have ability to create value from
what you already have
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Entrepreneur’s Reality
How can the entrepreneur create value from who he is,
what he knows, whom he knows, and what he has?
• Human Capital
–Education
–Knowledge
–Experience
• Intellectual Capital
–Ideas
–Inspiration
–Ingenuity
• Social Capital
• Modest Financial Capital
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Curriculum Content Focus:
Creating Value From Current Resources
Course Topic
Learning Opportunities
Entrepreneurial Opportunity
• What is an entrepreneurial opportunity?
• Where does it come from?
• What is a “good” opportunity?
• Opportunities are rarely “found” -- they
have to be created from an interaction
of macro forces along with human,
social, and intellectual capital.
Limited Financial Capital
• What problems arise in pursuing an
entrepreneurial opportunity with limited
financial capital?
• Breaking through the “vicious cycle” at
start-up, including overcoming:
(1) Bias for action vs. bias for analysis
(2) Fear of losing the upside vs. fear of
realizing the downside
Creating Value
• How do I overcome the problem of
“vicious cycle”?
• The effectuation principle -- providing a
practical means for accomplishing
something
• Entrepreneurs must leveraging human
capital, emotional capital, and social
capital to create something new.
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Curriculum Content Focus:
Creating Value From Current Resources (cont.)
Course Topic
Learning Opportunities
Risks
• What are the risks in pursuing an
entrepreneurial opportunity with limited
resources?
• How do I overcome these risks?
• The principles of
– “insuring and sharing/shifting risk”
(over time, place, and people)
– Managing residual risk:
“bootstrapping”
Scale
• How do limited resources affect scale
of entry?
• How do I solve the problem of scale?
• The principle of entry as a “process” vs.
entry as an “event”
Modes
• What are the different ways of pursuing
an opportunity?
• How do they differ?
• Modes of enterprise
S. Venkataraman
• Incrementalism vs. Splash
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Curriculum Content Focus:
Creating Value From Current Resources (cont.)
Course Topic
Learning Opportunities
Nature of Entrepreneurs
• What makes entrepreneurs
entrepreneurial?
• Trustee mindset vs. Promoter mindset
Baby Steps
• Can I conceptualize an entrepreneurial
opportunity?
• Concept definition: Crystallizing and
communicating a new business idea
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Context of Entrepreneurship
non-entrepreneurship
oriented culture
low status for
entrepreneur
poor deal flow
low quality
firms
no risk capital
entrepreneur
is risky
push rather
than pull
fear of failure
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Enabling Entrepreneurship:
Intangible Prerequisites
access to exit
markets,
products and
dollars
great
organization at
focal point:
ideas, deals
executive
leadership
COLLABORATIVE
LEADERS
safety
nets
role
models
idiosyncratic
value
S. Venkataraman
informal risk
capital
informal forums of
entrepreneurs
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The Ideology Paradigm
Education must enable the transformation from dominant to humanistic.
Dominant Ideology
Humanistic Ideology
Profit is bad
Profit = result of “good” business
Business = zero sum game
Business = positive sum game
Tallest poppy must be cut down
“If that fool can do it then I can do it too!”
“My greatest joy is when my
neighbor’s cow dies.” (schadenfreude)
Rising tide lifts all boats
Entrepreneurship is “evil”
Entrepreneurship enables change
Entrepreneurship means starting or
managing a subject matter expert
Entrepreneurship is one of the few
sources of new wealth
Entrepreneurs are born, not made;
entrepreneurship cannot be taught
Entrepreneurship is part and parcel of
business literacy
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Human Capital Development Approaches:
Global Examples
Croatia and Hungary: Import Capabilities
• Import faculty to teach both local faculty and students
• Send promising young faculty abroad for training
Singapore: Develop Capabilities - Train and “Bond”
• Create system to train best people abroad and require them return to internal
institutions to develop faculty from within
India: Invest & Watch / Train and Drain
• Send promising young faculty abroad for training; expect some will return but
realize some won’t
• As a result, expect some brain drain, but “it’s better to have brain drain than a
brain in the drain”
Mexico: Collaborate
• Educate collaboratively with visiting experts
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Education Methodology:
Dominant Model
Dominant Model:
TEACHER-CENTRIC
book learning
a-contextual and
imported content
teaching by
“experts”
focus on grades
“failure is not an
option” mindset
rote learning about
phenomenon
learning =
discovering “truth”
hypothetical
business plans
individual learning
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Education Methodology:
Shift from Passive to Active Learning
Dominant Model
TEACHER-CENTRIC
Desired Model
ENABLING ENTREPRENEURSHIP
book learning
learning by doing
teaching by
“experts”
student centered
learning
rote learning about
phenomenon
practice
the phenomenon
hypothetical
business plans
individual learning
S. Venkataraman
interactive learning
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Education Methodology:
Shift from Passive to Active Learning (cont.)
Dominant Model
TEACHER-CENTRIC
Desired Model
ENABLING ENTREPRENEURSHIP
a-contextual and
imported content
contextual, locallygenerated content
focus on grades
focus on creating
social and economic
value
“failure is not an
option” mindset
“failure is a learning
opportunity” mindset
learning =
discovering “truth”
learning =
creating possibilities
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