Should Universities Become Entrepreneurial Campuses?
Suddenly, entrepreneurship is “in” on campuses with activities such as MOOCs, business plan competitions and incubators. This trend seems to be not only in business schools but across the university. Is this good or are universities biting off more than they can chew?
There are many reasons for this sudden surge in activity and interest in entrepreneurship. One hope is to develop an entrepreneurial spirit so that people take initiative and “just do it” (to borrow the Nike slogan). The goal is to make not just the students entrepreneurial, but also faculty, staff, and administrators.
Another hope is to make money to replace a decline in government funding. But is this possible? The entrepreneurial market is a treacherous one. Entrepreneurs need training but usually cannot afford to pay for it. Low-cost workshops are not likely to offset cuts in external funding.
Still another reason is to create jobs and develop the area economy. The shining example in all of this is Stanford University. Whether or not Stanford actually did anything to create the magic of Silicon Valley or just happened to be in the right place at the right time is a difficult question to answer. We do not ask why someone became rich. We admire, envy, know how, and emulate.
Perhaps the most obvious reason why campuses have discovered entrepreneurship is that they have suddenly realized that most of their campus buildings are named after entrepreneurs. Entrepreneurs in America have been very generous to their alma maters. Entrepreneurs acknowledge their roots, they appreciate the kindnesses shown to them when they were students, and they attribute a portion of their success to their education. So they generously give and get their names emblazoned on the walls of ivy.
But do we really want an entrepreneurial campus? And what does that mean?
Entrepreneurs are leaders. Not everyone is, or can be, a leader. And even fewer are good leaders. We should teach entrepreneurship, just as we teach leadership. But not all students become successful entrepreneurs or leaders just because they have taken a few classes. And not all students mature at the same rate or are motivated at the same age.
If the definition of an entrepreneurial campus is to actually start businesses, the odds are that a huge proportion will fail. Best estimates are that VCs fail to reach their goals on about 80 percent of their investments. Corporations adjust to failure by firing the ones who caused it and shareholders pay the price. Can universities do the same and who will pay the price?
Entrepreneurship usually needs more than a full-time commitment. This means that students may have to quit their studies (like Jobs, Gates, Zuckerberg, Dell DELL +0.22%, Page and Brin), staff will have to leave their jobs, and faculty will need to leave tenured positions. Are they ready to do that? It may be easier to do this in Palo Alto where a great infrastructure for venture development already exists. Elsewhere it could be hazardous except in the case of exceptional entrepreneurs like Gates and Dell.
Universities will need to design and nourish an environment where risk-taking entrepreneurship flourishes. But that can be difficult in an institution where the main roads for institutional leaders lead to the shelter of tenure, and where tenure is given to those who have theoretical accomplishments rather than practical achievements. Faculty members who seek the security of tenure may not willingly accept the risk of entrepreneurship. In their perfect world, they would like the upside without the downside.
MY TAKE: There is a difference between teaching and doing. Teaching entrepreneurship throughout the university can be helpful. It may give some students the confidence to start their own businesses, and help others who are underemployed to pursue their dreams.
Some may even strike gold. But when universities do, i.e. when they become the entrepreneurial champions, they take on the risk. Universities, as they are structured today, may not have the ideal structure to become entrepreneurial champions. Additionally, universities, like other large organizations, want employees to “think outside the box.”
But with too much freedom to pursue their passion, universities may find that costs flow to the organization while benefits flow to the employees, especially when there are no patents. This may require universities to define the limits to entrepreneurship, i.e. the second box outside the first. But, paradoxically, the second box could defeat the whole purpose of the new program with more rules and regulations.