Many undergraduate business schools have majors, concentrations, and extensive programs aimed at developing the next generation of entrepreneurs. Some in higher education argue this trend is based on shifts in the job market that provide greater opportunities for new business development and limit prospects for advancement in traditional large scale organizations. Others suggest generational differences are a key driver. Undergraduates, they contend, seek more flexibility, engagement, and impact within their chosen workplaces. And since there are always a few cynics in the bunch, some believe universities capitalizing on the financial benefits of student entrepreneurship, as their ideas lead to profitable business ventures. The Global Entrepreneurship Monitor (GEM) reports two-thirds of adults worldwide think entrepreneurship is a good career choice.
The irony is while there is a great deal of interest and enthusiasm in developing new entrepreneurs based on a view that opportunities abound, the failure rate of new start-ups is estimated at 90 percent, and premature scaling is the number one factor. It is also true that interest in becoming an entrepreneur, while on the rise, reflects a small portion of the undergraduate population, even among schools widely acknowledged as leaders in entrepreneurship development. For example, an annual survey of alumni conducted by MIT showed undergraduates selecting employment in start-ups upon graduation was 15 percent in 2014. While this number is growing, it raises the question of whether we are missing a tremendous opportunity by assuming our undergraduate students are seeking business ownership rather than wanting to have a career within an entrepreneurial work environment. Not all students will found companies, but all should possess the business skills to succeed in an entrepreneurial environment.
That same study by MIT noted a significant percentage of applicants for undergraduate admissions indicate a desire to have a global impact across all stages of the innovation process, from the initial idea to commercialization. How this contribution takes shape is becoming more diverse in terms of employment opportunities for undergraduate students. Yes, some will want to be the owners of start-ups, but a significant and growing number of students will use their talents and education to help drive positive outcomes at these new ventures -- but not from the owner's chair. Some will be investors (especially given the rise in crowdfunding for new ventures), some will serve on an advisory or governance board, and a growing number will want to be employed by these entrepreneurship firms. As firm growth within start-ups increases, so do job opportunities for new graduates. In fact, even during the recent recession, job growth at entrepreneurial companies increased slightly. Entrepreneurial firms grow faster, offer employees more opportunities sooner, and are more agile than large bureaucratic firms. These firms offer more risk but also provide new graduates with a broader array of challenges to test and develop new skills, which may take longer to nurture in traditional hierarchical organizations.
While all of this sounds very promising, most undergraduate business programs are still focused on developing entrepreneurship from a business owner's perspective. Little attention is paid to students who want to be part of an entrepreneurial business culture. Programs need to be enhanced to focus on how students may utilize their functional or technical knowledge, skills, and abilities. For undergraduate business majors, how do we increase their capability to manage finance, marketing, accounting, information systems, human resource management, etc., but from within the context of a start-up organization where many of our tools, theories, and management practices may not apply? How can we build the next generation of business and technical professionals who can improve the success rate of start-ups? The answer is we must equip them with knowledge specific to this unique type of business model.
Pitt Business offers a pathway for students interested in entrepreneurship through its Certificate Program in Innovation and Entrepreneurship (CPIE). The CPIE is suited for the risk-hungry students who wish to start their own companies and the students who are attracted to the entrepreneurial culture of startup firms. We recognize that not all students want to work in a traditional company. Helping young people find their fit as entrepreneurs gives them that much-needed sense of fulfillment while providing the rest of us with the world's next great start-up.