Entrepreneurship Is an Opportunity for Education
With student interest in new business creation on the rise, the future for higher education is likely to be far brighter than it seems.
Research shows that, in the heart of the pandemic, student interest in entrepreneurship education spiked. That trend proves what many of us already suspected: Crisis indeed fuels entrepreneurship.
We saw this happen after the 2002–2004 SARS pandemic, when travel restrictions and limited human contact fueled the growth of e-commerce companies like Alibaba. It happened again after the financial crisis of 2008, which created opportunities for disruptive companies like Uber and Airbnb—then just startups—to shoot up in popularity.
But COVID-19 and the recession it has caused will likely have even greater impact. One of the biggest challenges that humanity has faced in recent years, the pandemic has been a “black swan” phenomenon that has changed our collective trajectory. Its effects are quickly becoming a platform for new growth in nearly every aspect of our lives—especially when it comes to startup creation.
This could be good news for higher education. At a time when undergraduate enrollments for many programs are dropping, demand for entrepreneurial know-how could be what brings students back.
The Context for Growth
In 2020, the U.S. saw what LinkedIn hails as an “entrepreneurial renaissance.” According to LinkedIn News editor Jordyn Dahl, high unemployment has encouraged would-be business owners finally to pursue their great ideas, and more people are making the shift from “employee” to “entrepreneur.” As of mid-November 2020, the number of new business applications had skyrocketed—up 38 percent year-over-year, according to U.S. Census Bureau data.
This same trend was happening in Europe even before the pandemic. A tsunami of more than 42 billion EUR (50.3 billion USD) in venture capital has flooded into Europe over the past five years, according to Atomico’s 2019 State of European Tech report. It’s no surprise that, last year, venture capital firm Sequoia—well-known for its investments in companies like Apple, Google, and YouTube—opened a small office in London to support its plan to invest more heavily in the European startup community.
Stories like these denote an explosion of innovative business and investment opportunities not just in the U.S. and Europe, but worldwide. As startup founders and their teams grow increasingly sophisticated, they will have an enduring impact on their national economies.
Implications for Higher Ed
Higher education has experienced its own transformation over the past year. Universities have been forced to shift quickly to digital learning, so that students could continue their educations online during the pandemic.
But despite schools’ best efforts, 41 percent of students say they are thinking of changing their education plans due to the pandemic, according to data from Studyportals, an online platform where students can explore global study options. While increases in student deferrals and decreases in enrollments are likely temporary, academic leaders worldwide still are uncertain how the crisis will disrupt their programs in the long term.
In March 2020, demand for entrepreneurship education was up 66 percent year-on-year—a strong indication that, during times of great crisis, students perceive new business creation as a catalyst for helping them find opportunities.
As academic leaders look to the future, however, they might take note of current market trends. Studyportals’ internal data show that student interest in face-to-face bachelor’s and master’s programs in entrepreneurship has grown by 7.3 percent, compared to 2019. Interest in online programs in this subject is up 25 percent.
This jump is, in part, a continuation of pre-pandemic trends. However, in March 2020—perhaps the most disruptive time of the pandemic—demand for entrepreneurship education was up 66 percent year-on-year. This is a strong indication that, during times of great crisis, students perceive new business creation as a catalyst for helping them overcome challenges and find opportunities.
Indications of Opportunity
According to AACSB International, business schools worldwide were adding to their entrepreneurship offerings even before the pandemic. For example, the number of undergraduate-level programs in this discipline increased by 23.75 percent between 2017–2018 and 2019–2020. Schools in northern Europe and North America represented the largest share of this growth.
In its Masters in Management Ranking 2020, the Financial Times reports that 11 percent of alumni from the MiM class of 2017 have launched new companies since starting their master’s studies. For 15 percent of these entrepreneurs, their companies are their main source of income.
A new report on the impact of COVID-19 on new ventures was recently released by the Global Entrepreneurship Monitor, a consortium that conducts an annual study of global entrepreneurial ecosystems. “A jobs recovery is not expected until after 2021,” the report’s authors write. “Young people will confront a tougher-than-ever job market and deficiencies in education systems that could compromise their futures.”
In addition, the report predicts that “remote working and online education are likely to become a permanent feature of our lives—again presenting opportunities for entrepreneurs.” This reality, its authors emphasize, means that entrepreneurship education and training will become increasingly important to the world’s economy in the years to come.
A Way to Shape the World
Business school administrators are already seeing these trends in action. Brigitte Chanoine, rector of ICHEC Business School in Brussels, has tracked growth in her school’s entrepreneurship program since 2017. She says that student interest in this program has increased over 52 percent.
Vincenzo Esposito Vinzi, dean and president of ESSEC Business School in France, says that student registration in the entrepreneurship track of ESSEC’s master in management program has increased fourfold from 2019 to 2020. The school expects these numbers to continue to increase in 2021 despite the recession.
The number of startups created within ESSEC’s incubator also has increased 30 percent year-to-year—although Vinzi notes that this growth could stall if the economic crisis worsens. Even so, ESSEC recently announced that it has made entrepreneurship one of the three pillars of its new strategy.
“Students realize that creating their own businesses or joining young and agile companies can provide significant opportunities to shape the world and solve environmental and social problems.”—Vincenzo Esposito Vinzi, ESSEC
Vinzi notes that one reason students are so interested in entrepreneurship is that they want to make a positive difference in society. “Students increasingly consider entrepreneurship an efficient way to impact the world,” he says. “They realize that creating their own businesses or joining young and agile companies can provide significant opportunities to shape the world and solve environmental and social problems.”
Vinzi believes that entrepreneurship education will provide students with the skills necessary to adapt to industry disruptions that they will inevitably face in their careers. Whether graduates end up working in big firms or founding their own startups, he adds, they all will need strong “entrepreneurial backbones” if they want to become changemakers in their organizations.
From Downturn to Upturn
Ironically, we can expect to see more startups take advantage of the surge of interest in new business creation. Consider Peaqs, a Danish edtech startup whose mission is to support entrepreneurs across Europe. Using the company’s online platform, aspiring entrepreneurs can build their business plans, create feasibility studies, and analyze their processes. They then can see this information presented on a stock market simulation platform, where other users act as individual investors who buy, sell, and manage portfolios of the products listed. This provides founders with instant market feedback, which can motivate them to refine their ideas even further.
Peaqs is just one indication that, as with past crises, the current pandemic presents important opportunities to those who are ready for the challenge. Increased student demand for entrepreneurship education is one such area of opportunity for higher education—it could be yet another sign of a bright future ahead.
|Timothy Mescon is executive vice president and chief officer of Europe, the Middle East, and Africa at AACSB International. Follow him on Twitter @timmescon.|
Edwin van Rest is co-founder and CEO of the global study option search platform Studyportals, based in Eindhoven, the Netherlands. He has been involved with the European Association for International Education since 2009, and he currently sits on AACSB's European Advisory Council.