1. 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

2. S. Venkataraman2 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” 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”

3. S. Venkataraman3 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.

4. S. Venkataraman4 The Reality of Entrepreneurship Education MethodsContent “Experts” Ignores Local Ideology and Paradigms: Broader social status of entrepreneurship Ignores Local Ideology and Paradigms: Broader social status of entrepreneurship Ignores Local Context: Underdeveloped tangible and intangible infrastructure for entrepreneurship Ignores Local Context: Underdeveloped tangible and intangible infrastructure for entrepreneurship Entrepreneurship Education: Imitates the U.S. and Europe Entrepreneurship Education: Imitates the U.S. and Europe Ignores Local Entrepreneur’s Reality: Limited financial capital - must have ability to create value from what you already have Ignores Local Entrepreneur’s Reality: Limited financial capital - must have ability to create value from what you already have

5. S. Venkataraman5 Entrepreneur’s Reality Human Capital –Education –Knowledge –Experience Intellectual Capital –Ideas –Inspiration –Ingenuity Social Capital Modest Financial Capital Human Capital –Education –Knowledge –Experience Intellectual Capital –Ideas –Inspiration –Ingenuity Social Capital Modest Financial Capital How can the entrepreneur create value from who he is, what he knows, whom he knows, and what he has?

6. S. Venkataraman6 Course TopicLearning 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. Curriculum Content Focus: Creating Value From Current Resources

7. S. Venkataraman7 Course TopicLearning 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” Incrementalism vs. Splash Modes What are the different ways of pursuing an opportunity? How do they differ? Modes of enterprise Curriculum Content Focus: Creating Value From Current Resources (cont.)

8. S. Venkataraman8 Course TopicLearning 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 Curriculum Content Focus: Creating Value From Current Resources (cont.)

9. S. Venkataraman9 Context of Entrepreneurship poor deal flow no risk capital entrepreneur is risky fear of failure push rather than pull low quality firms low status for entrepreneur non-entrepreneurship oriented culture

10. S. Venkataraman10 Enabling Entrepreneurship: Intangible Prerequisites great organization at focal point: ideas, deals role models informal forums of entrepreneurs idiosyncratic value safety nets access to exit markets, products and dollars executive leadership informal risk capital COLLABORATIVE LEADERS

11. S. Venkataraman11 The Ideology Paradigm Education must enable the transformation from dominant to humanistic. Dominant Ideology Humanistic Ideology Profit = result of “good” businessProfit is bad Business = positive sum gameBusiness = zero sum game “If that fool can do it then I can do it too!”Tallest poppy must be cut down Rising tide lifts all boats“My greatest joy is when my neighbor’s cow dies.” (schadenfreude) Entrepreneurship enables change Entrepreneurship is “evil” Entrepreneurship is one of the few sources of new wealth Entrepreneurship means starting or managing a subject matter expert Entrepreneurship is part and parcel of business literacy Entrepreneurs are born, not made; entrepreneurship cannot be taught

12. S. Venkataraman12 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 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

13. S. Venkataraman13 Education Methodology: Dominant Model Dominant Model: TEACHER-CENTRIC Dominant Model: TEACHER-CENTRIC book learning teaching by “experts” rote learning about phenomenon hypothetical business plans individual learning a-contextual and imported content focus on grades “failure is not an option” mindset learning = discovering “truth”

14. S. Venkataraman14 Education Methodology: Shift from Passive to Active Learning Dominant Model TEACHER-CENTRIC Dominant Model TEACHER-CENTRIC Desired Model ENABLING ENTREPRENEURSHIP Desired Model ENABLING ENTREPRENEURSHIP book learning learning by doing teaching by “experts” student centered learning rote learning about phenomenon hypothetical business plans practice the phenomenon individual learning interactive learning

15. S. Venkataraman15 Education Methodology: Shift from Passive to Active Learning (cont.) Desired Model ENABLING ENTREPRENEURSHIP Desired Model ENABLING ENTREPRENEURSHIP a-contextual and imported content focus on grades “failure is not an option” mindset learning = discovering “truth” contextual, locally- generated content focus on creating social and economic value learning = creating possibilities “failure is a learning opportunity” mindset Dominant Model TEACHER-CENTRIC Dominant Model TEACHER-CENTRIC