What do we mean by entrepreneurship?

This is a blog I wrote specifically for the HR Business School (Rotterdam) but some might find the thoughts of interest.

In business and university circles we often hear the phrase “students must become more entrepreneurial.” We read articles arguing that everyone will have to become an entrepreneur in the new economy[1] and one of the key focus areas of the ‘Roadmap to the Next Economy’[2] is startup economies. The EU has a 2020 Entrepreneurship strategy[3] and, in 2014, the World Economic Forum sponsored a workshop entitled ‘Fostering Innovation- driven Entrepreneurship in Europe’, in which they put forward the structure of “stand up, startup, scale up” as a means to supporting the creation of new businesses.[4]

Asked for a definition of an entrepreneur, my graduate students will come up with familiar names; Gates, Jobs, Zuckerberg and Musk. They will describe a vision of a lone wolf working in a small workshop or garage, coming up with a brilliant idea that creates a billion-dollar business.

I recently interviewed 90 final year bachelor business students about becoming an entrepreneur and most replied “I don’t have what it takes”. Only five planned to start a new business after they graduated and a further 75 said – “Maybe in a few years’ time, but not just yet.”

No-one responded “Yes” to the question: “Has university prepared you to be able to start your own business?” Most only replied “Somewhat”.

This after three and half years of study at our business school!

Are we doing a good job at HR Business School helping our students become entrepreneurs? Perhaps we are discouraging ambition by projecting the wrong image of an entrepreneur?

That would not be surprising when there are so many ideas of what an entrepreneur is. For example, ‘Business News Daily’s’ Paula Fernandes interviewed 15 company founders and received different 15 versions of what makes an entrepreneur.[5]

In a recent ‘HBR’ article[6], John Hagel III reminds us that high growth new businesses (often referred to as ‘gazelles’ or ‘unicorns’) are few and far between and argues that we shouldn’t unduly focus on them. With new technologies making production and distribution processes more reachable to smaller businesses, perhaps we should focus our students, not so much on the building of multi-million dollar enterprises but, in Hagel’s words; “making a comfortable living for themselves and perhaps a small team of people” by “designing and commercializing products that are targeted to the specific needs of small groups of customers rather than the mass market.”

One can start to see this in the rise in new small businesses challenging global players – such as specialty gin companies, artesian bakeries, boutique breweries, and bean-to-bar chocolatiers.

Most of our graduates join small businesses rather than large ones and therefore don’t see the need to be entrepreneurial, but even existing small businesses need entrepreneurs to remain competitive.

The EC writes that “Europe’s economic growth and jobs depend on its ability to support the growth of enterprises. Entrepreneurship creates new companies, opens up new markets, and nurtures new skills. The most important sources of employment in the EU are Small and Medium-sized Enterprises (SMEs). The Commission’s objective is to encourage people to become entrepreneurs and also make it easier for them to set up and grow their businesses.” [7]

So, as the HR Business School, what should we be focusing on? I suggest three capabilities:

Creativity and Innovation:
How can we involve other parts of the university more with our business school? How do we encourage closer collaboration between our students and those of, say, the Willem de Koning Academy, CMIT and the RDM Campus?

Problem-solving, teamwork and collaboration:
The recent Rotterdam International Case Competition, in which teams of students tackled complex business cases under time pressure, is an example of what the few participants would say was a wonderful learning experience. But why just for a select few students in the occasional competition? Could we not use this methodology as a regular feature in more of our courses?

Calculated risk taking and learning from failure:
It is often thought that entrepreneurs are risk takers, but a recent study revealed that they take carefully-considered risks and, importantly, they learn from their mistakes.[8] Perhaps we can encourage our own FU nights[9] within the HR Business School – where we invite current students and recent graduates to share their experiences of mistakes made and lessons learned?

[1] “Why everyone will have to become an entrepreneur” Paul B Brown Forbes May 13, 2012
[2] https://mrdh.nl/RNE
[3] https://ec.europa.eu/growth/smes/promoting-entrepreneurship/action-plan_en
[4] http://www3.weforum.org/docs/AM14/WEF_AM14_FosteringInnovationDrivenEntrepreneurshipEurope_SessionSummary.pdf
[5] “Entrepreneurship Defined” Paula Fernandes Business News Daily, March 2, 2016
[6] “We need to expand our definition of entrepreneurship” John Hagel III, HBR, September 2016
[7] https://ec.europa.eu/growth/smes/promoting-entrepreneurship_en
[8] “Effectuation: Elements of Entrepreneurial Expertise” by Saras D. Sarasvathy Edward Elgar 2008
[9] https://fuckupnights.com
This blog is written by Ron Ainsbury, associate applied research professor Business Responsibility & Sustainability, Research Centre Business Innovation, Rotterdam University of Applied Sciences.