How Colleges Transform Students into Entrepreneurs
To our readers: Earlier today, GoodCall.com published an article on which colleges groom the most founders of unicorns – those private companies with valuations of $1 billion or more. Following is an article outlining how colleges help turn students into entrepreneurs.
The 2016 Kauffman Index of Startup Activity says, “Two years ago the Startup Activity Index was at its lowest point in the last 20 years. It has gone up two years in a row, reaching close to the peak before the Great Recession drop.”
This is in part due to the entrepreneurial initiative of college-aged students. Remember, such familiar companies as Facebook, Google, DropBox and Dell were started by college students. But that’s history. As the Kauffman index shows, such efforts haven’t been as prominent as recently as three years ago.
Since that time, however, the percentage of new entrepreneurs between the ages of 20 and 34 has been steadily increasing. The changes in the composition of new entrepreneurs for that age bracket has dropped from 34.3 percent in 1996 to 25 percent in 2015.
The cause of this decrease? The data seems to indicate that the Great Recession hit this demographic particularly hard, and members are recovering more slowly than the other age groups. Slow growth may be the new normal.
Still, few would debate that the college environment seems to spur creation of new businesses. Here are some reasons why:
Entrepreneurs and the impact of a new environment
For many young people, moving to a new environment can stimulate ideation and become the impetus for new business. Eric Liguori, University of Tampa entrepreneurship professor and author of a book called The Startup Student, believes this can be built upon within the university itself.
“The physical environment sets the stage for productivity and motivation. Google and Facebook have incredible spaces and incredible employees. Everything about their physical space and organizational policies is designed to maximize employee engagement and productivity,” Liguori says. He went on to add, “University entrepreneurship programs have taken to mimicking these types of environments. The University of Tampa recently opened their Innovation and Collaboration building with over 25,000 square feet of dedicated entrepreneurship center space for student venturing.”
The University of Tampa is not the only school to make a dedicated effort to ensure students have the space for creativity. The Massachusetts Institute of Technology brings high school students to its campus for a program specifically for this purpose. Florida State University created the Jim Moran Institute to bring together resources to help aspiring entrepreneurs flourish.
Clubs and contests and entrepreneurs
In contrast to the adage that people can go to college or become entrepreneurs, New York University research has shown that attending college can build entrepreneur expertise. In addition to the many dedicated programs and work spaces found in colleges across the country, students are also exposed to numerous clubs and organizations that help them develop entrepreneurial skills.
Most business schools have some sort of entrepreneurship club, such as the one found at Harvard. Those who don’t have access to a club on campus have the opportunity to join national organizations such as the Collegiate Entrepreneurs’ Organization that are designed specifically to help facilitate the growth of student businesses.
To further encourage students who have a startup plan, there are a multitude of entrepreneur-focused competitions backed by universities across the country. Some of the most popular include:
- Rice Business Plan Competition
- Harvard Business School New Venture Competition
- Massachusetts Institute of Technology Entrepreneurship Competition
- Purdue University’s Burton D. Morgan Business Plan Competition
These types of competitions offer the winners prizes that range from tens to hundreds of thousands of dollars. They offer real world experience in pitching ideas to investors as well as the capital to implement the business plans they have proposed.
Don’t overlook military academies
Private and public universities are not the only institutions of higher learning having a positive impact on the development of entrepreneurial skills. Susan Cho, graduate of the United States Military Academy at West Point says, “The primary lessons at any of the military academies are leadership, integrity, and accountability – all hallmarks and necessary traits of a great entrepreneur.”
The Small Business Administration has estimated that veterans are 45 percent more likely to have their own business than those who have not served in the military. The top five industries veterans create businesses in are:
- Professional, scientific, and technical
- Real estate
- Retail trade
- Transportation and warehousing
Cho believes, “A combination of our education, our drive, our experience, and our generational mindsets have created a marked trend in entrepreneurship, and I only foresee this trend growing.”
It is clear colleges are making a concentrated effort to be on the leading edge of entrepreneurial development and growth. New integrative programs are being developed, student organizations, targeted competitions, and the physical environment of many programs are designed to facilitate the success of student entrepreneurs.