What is the role and importance of education in entrepreneurship? And what type of education is needed to become an entrepreneur?
These are just a couple of the questions you will be exploring in this step. You may already be questioning why education is important, given that Bill Gates, Mark Zuckerberg and Michael Dell dropped out of university to start their entrepreneurial ventures, and Richard Branson left school at the age of 16.
One viewpoint is that traditional education, which emphasises conformity, compliance and a linear path, stifles entrepreneurial thinking. Another viewpoint argues that education makes you more likely to question the status quo, be aware of opportunities (Sanchez 2013) and builds your social capital (Burns 2016). Successful and innovative entrepreneurs including Google’s founders Larry Page and Sergey Brin, Amazon’s Jeff Bezos, Michael Bloomberg and James Dyson are university educated.
So, which of these successful entrepreneurs are the outliers? Research has shown that education is becoming more important for entrepreneurship. Founders typically have a degree, and a few have an MBA (Burns 2016). However, there are many ways in which an entrepreneur can get an education. Conventional, formal education may not be the best option for everyone and it may be more important to learn to be innovative and entrepreneurial through experiential learning and by exploring, questioning assumptions, using imagination and synthesising information (Rogan and Schloderer 2015).
Sarasvathy’s (2001) work on effectual reasoning provides a path for re-imagining the role of education in entrepreneurship. Effectual reasoning presents a different way of applying creative thinking processes. Individuals can follow their curiosity, be inquisitive and essentially shape the future through their actions, rather than being fixed with pre-determined choices that stifle individual ideas and dreams.
Arguments about education can be linked to other contextual issues, such as social class and gender, depending on the overarching cultural context. You should consider not just the role of education but the opportunities for education available to individuals in a given context.
For example, in sub-Saharan Africa, women and girls face many social and economic barriers that result in them either not being permitted or not encouraged to take up formal education. United Nations’ figures indicate girls are more than twice as likely to lose out on education in conflict zones (BBC 2017). This has an impact on the type of entrepreneurship that is started in these contexts (eg necessity vs opportunity) as well as the potential to be entrepreneurial.
Discuss whether education fosters or hinders the practice of entrepreneurship in different cultures. You should compare at least two cultural contexts and you can use the GEM database again to do so.
Coughlan, S. (2017) ‘10 Toughest Places for Girls to go to School’. [online] available from https://www.bbc.co.uk/news/business-41558486 [11 June 2019]
Rogan, M. and Schloderer, F. (2015) How Important is Education to Entrepreneurial Development? [online] available from https://knowledge.insead.edu/blog/insead-blog/how-important-is-education-to-entrepreneurial-development-4164 [10 June 2019]
Sanchez, J (2013) ‘The Impact of an Entrepreneurship Education Program on Entrepreneurial Competencies and Intention’. Journal of Small Business Management 2013 51 (3), 447–465
Sarasvathy, S. (2001) ‘Causation and Effectuation: Toward a Theoretical Shift from Economic Inevitability to Entrepreneurial Contingency’. The Academy of Management Review 26 (2), 243-263
Williams, C. (2017) ‘The Disconnect Between Education and Entrepreneurship’. Forbes [online]. available from https://www.forbes.com/sites/courtneywilliams/2017/08/15/the-disconnect-between-education-and-entrepreneurship/#2b52d4773c5c [11 June 2019]
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