Entrepreneurship classes and programs in colleges around the world have proliferated over the last quarter of a century, yet the literature examining the impacts and effectiveness of such initiatives is still relatively sparse and limited. Do these initiatives make a difference in the long-term entrepreneurial activity and success of their students and alumni?
Yong Suk Lee, SK Center Fellow and APARC’s Korea Program deputy director, and Charles Eesley, an associate professor and W.M. Keck Foundation Faculty Scholar at Stanford’s Department of Management Science and Engineering, have been collaborating on research that aims to fill in some of the information gaps in assessing the efficacy of entrepreneurship education programs.
In a new article published in Strategic Management Journal, Lee and Eesley examine the entrepreneurship consequences of Stanford University’s two major entrepreneurship education programs that were founded in the mid-1990s. Their findings are sobering but offer lessons for improving such efforts.
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Using a unique entrepreneurship-focused survey of Stanford alumni, Lee and Eesley investigated how the Stanford Center for Entrepreneurial Studies (CES) at the Business School and the Stanford Technology Ventures Program (STVP) at the Engineering School affect entrepreneurial activity. They administered the survey to a well-defined population of comparable individuals from multiple industries, in total generating 27,783 responses. Respondents reported information on their entrepreneurial status, participation in angel investing and venture capital, and on the founding, duration, and success of start-up ventures. Respondents also indicated to what degree, if any, they had participated in the CES or STVP programs.
The survey results reveal that overall participation in the Stanford Business School CES had a negative to zero impact on entrepreneurship rates and participation in the Engineering School STVP had no impact on entrepreneurship rates. However, the data suggests that participation in the Business School initiative decreased startup failure and increased firm revenue in the long-term. “University entrepreneurship programs may not increase entrepreneurship rates,” Lee and Eesley conclude, “but help students better identify their potential as entrepreneurs and improve the quality of entrepreneurship.”
These findings provide important context to broader questions about entrepreneurship development and incubation, such as whether entrepreneurship is an intrinsic or acquired trait, and as such, whether firms should seek to develop entrepreneurial capabilities internally or acquire them from external sources. This question equally concerns universities and the strategies institutions of higher education employ to foster entrepreneurial talent.
Lee and Eesley note that it is important to take into account variation in entrepreneurship training programs in course content, emphasis, and other dimensions. Their research suggests that general entrepreneurship education that targets a broader spectrum of startups, rather than one that solely focuses on technology startups, may be more effective in reducing the uncertainty in entrepreneurial ability or improving startup performance.
These findings may generalize to other samples of selective-admission college-educated alumni, although there is certainly need for future work that explores the effects of entrepreneurship education in different institutional environments.
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