New Ways to Encourage Entrepreneurship and Education to Augment Prospects for the Young
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- Noel Matthews
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1 New Ways to Encourage Entrepreneurship and Education to Augment Prospects for the Young Our generation of young is experiencing a period of transition. Pessimists call it a crisis. Optimists prefer the term revolution. The only certain thing is that the world is changing. The rules become different, and the young who wished to follow their parents ideal are stuck in the motion of a transitional business environment. The business world went through an identical crisis during the Industrial Revolution. Inventions such as steam engines or electricity destroyed a number of tedious jobs. Similar to our current young generation, whole generations of workers were unemployed during the Industrial Revolution. However, later on standards of living were improved, and the subsequent generations found jobs, which were much more meaningful. Likewise, the Internet, big data, or robotic destroy repetitive jobs. Many tasks in the public sector can henceforth be automated. Computers also take the position of humans in the services sector. In a nutshell, our generation is going through a striking illustration of Schumpeter s creative destruction, which has taught us that innovations constantly arise from destruction of a prior economic order (SCHUMPETER, 1942). The more pessimistic are scared and observe the destruction of thousands of jobs, while the more optimistic and courageous dream of opportunities. Indeed, at the end of this painful transitional process, more interesting jobs are likely to be created. What should our reaction be? Should we bury our head in the ground like ostriches until the end of this transitional period? Should we be adventurous enough to seize the opportunities of those changes so as to build a better world? How to face the current situation? We should not forget the bloody events that happened during the Industrial Revolution. Of course, standard of living was roughly improved but it cost lives and years of poverty. Therefore, it is our duty to prevent these kinds of events from recurring. Fortunately, signs of solutions are arising from all around the world. Let us compile them into two main approaches: Entrepreneurship and Education. While entrepreneurship creates jobs and produces disruptive innovations, which bring about new opportunities, education helps young to be prepared to find a job more easily. Both can help young generations to have a better prospect of success. Connect on 1
2 Foster entrepreneurship: Breakthroughs and meaningful jobs For sure, start-ups have a positive effect on the economy. Start-ups not only provide innovative products and services, but also create meaningful jobs. They have the best position to change the world. However, start-ups need support. Young entrepreneurs are unlikely to succeed on their own. Indeed, Shikhar Ghosh, a lecturer at Harvard Business School found that the failure rate for start-ups is more than 75% (BLANK, 2013). How can we help youth become entrepreneurs? Successful start-ups from Apple to Dropbox have relied on a supporting environment. Silicon Valley is probably the most compelling example, which has created a mix of factors facilitating start-up success. First of all, young entrepreneurs should be aware of the benefits of entrepreneurship. Silicon Valley is well known for celebrating entrepreneurs as heroes. While many countries prefer to celebrate big businesses, Silicon Valley highlights the success of its young entrepreneurs because they are those who are foolish (JOBS, 2005) enough to provide vision of disruptive innovation, to take the risk, and to share their vision. Our young generations need to be inspired by successful models (SEMMELMANN, 2013). Steve Jobs or Mark Zuckerberg have had such a positive influence on the development of entrepreneurship. Their success has helped develop finance, to inspire young entrepreneurs; they have also created opportunities and so many jobs. These examples point out to what extent leaders of today can bolster the success of the leaders of tomorrow. Furthermore, publicity of local successful stories would be an even better way to inspire young entrepreneurs. Who can be more inspiring than an entrepreneur we can meet? Local entrepreneurs are a good support for young entrepreneurs, and they can be considered as good models for families, who want to be reassured Parents opinion is decisive regarding the path their children are going to embrace. Illustrations of success make parents realize that being an entrepreneur is a real job. They are therefore more willing to support their children s choice to set up a venture. Second, universities have a major role not only in supporting student entrepreneurship, but also in encouraging innovation. Universities are made up of a bunch of disciplines. They are able to foster disruptive visions by mixing disciplines and Connect on 2
3 breaking down departmental barriers. For instance, Stanford University s Bio-X Campus has been an excellent means to facilitate interdisciplinary research connected to biology (biox.stanford.edu). Intermixing disciplines enable better communication among experts and result in disruptive innovations. Yet, too many universities are focused on specialisation. What can be more productive than mixed teams of searchers, and entrepreneurs? Intermixed disciplines interaction is a key to innovation. Moreover, schools and universities should encourage students to become entrepreneurs early with the help of societies. Student life does not impose many obligations. It makes it easier for a student to start a company. Much research, case studies or essays could be considered as interesting start-up ideas. Students need to be taught to challenge the rules. As a result, professors have a significant role of organizing inter-disciplinary classes and to encourage students to go beyond theories. Opportunities to be the one to challenge existing rules have a positive influence prospect of success. Third, young entrepreneurs need a better access to finance. Breakthroughs cannot happen without capital. Meaningful projects need angel investors and venture capital firms. As seed funding is not easily supported, two ways to finance start-ups must be fostered: Accelerators and crowdfunding. On the one hand, accelerators are perfect local tools to assist young start-ups. Accelerators, such as YCombinator or TechStars, are organizations that help ventures to build their first products, to identify customers segments, and to secure resources such as capital and employees (COHEN & HOCHBERG, 2013). Most accelerators provide seed capital and assist start-ups until a demo-day, where entrepreneurs pitch to an audience of qualified investors. Those initiatives are a boost for disruptive start-ups because they are able to provide right advice. Dropbox is an example of a start-up that was not able to find seed funding. YCombinator helped Dropbox, which is now valuated at $10 billion. Accelerators are already installed in some big cities. As they decrease the failure rate of start-ups, their development in smaller cities would be beneficial. On the other hand, crowdfunding is international method that enables funding from everywhere. Crowdfunding is a recent method, which allows founders to fund their ventures by drawing on relatively small contributions from a relatively large number of individuals using the Internet without standard financial intermediaries (MOLLICK, 2014). It is an easy way for entrepreneurs to fund their projects. Although Connect on 3
4 crowdfunding is based on one-time campaigns, it helps entrepreneurs by providing the proof of concept: a successful crowdfunding campaign means that the venture is able to find passionate customers. Accelerators and crowdfunding platforms diminish the failure rate of start-ups. They should be encouraged all over the world to help start-ups by both private and public initiatives. Indeed, funded and well-advised start-ups have better chances of success. Fourth, company law should not impede the process of setting up a venture. In many countries, law is mostly designed for big companies. A process of modernization has started. States such as New Zealand, Australia, Canada and Singapore have made it particularly easy to set up a company. Thus, in these countries it takes from one to three days to start a business, and the procedures are almost costless (Doing Business, 2013). However, the average time to start a business is still 30 days. In some countries, such as Brazil, it takes more than 100 days. Time and difficulty to set up a company is a major obstacle to entrepreneurship, which certainly hinder good opportunities and innovation. Online registration and simple procedures are both efficient means to make starting a business more appealing to young. With the right vision and team, they should be ready to start their venture. Start-ups founded by young entrepreneurs are a powerful means to embracing innovative opportunities and to creating meaningful jobs. Start-ups do have the ability to accelerate the transition we are experiencing in order to establish a more sustainable world. Many leaders of today can inspire our young generation of leaders. Universities have ways to bolster tremendous breakthroughs. Finance can be made more accessible, and countries have shown how law can encourage the creation of start-ups. Lots of initiatives regarding entrepreneurship can be extended in order to improve chances of success. Widened access to an education focused on providing needed skills Entrepreneurship is not the only way to succeed in our transitional world. Not all of us are fond of taking risks. Education also has a major role in resolving our current crisis. By widening access to an education focused on the needs of companies, schools and universities can skyrocket the prospect of success for students. Major Internet companies lack skilled students to hire. Of course, they are still hiring successful Connect on 4
5 managers and brilliant engineers, but they also need specialised web employees, such as web-designers and community managers. Companies struggle to find these kinds of employees because our schools and universities do not have enough programs that are oriented toward teaching skills for web employees. Most of the web employees have learnt by themselves. Unemployment rates are high, especially regarding the young. Yet, companies have problems hiring qualified employees. As a consequence, schools should teach topics and skills that matter. Programs should be oriented toward fields of the future. For instance, facing this problem, Xavier Niel, a French entrepreneur and founder of a major French Internet service provider, decided to set up a free Internet oriented school. Its goal has been to help students to learn jobs, which will be particularly needed in the future (SZYKULLA, 2013). The Internet is not the only sector that needs talents. Schools and universities should widen access to programs focused on fields such as clean energy storage technologies, recycling, or marine resources (LAUVERGEON, 2013). Students, who have a degree related to a growing sector, are more likely to be hired. Indeed, companies are constantly looking for these skills. Moreover, modern technologies have made it easier to widen access to knowledge. Reforms must shape new means to teach skills. Online classes through video, audio, or readings have made it possible to learn a tremendous amount of knowledge easily. These new platforms make it easier for schools to provide cheaper degrees. Although theory should be learnt online, practice should not be neglected. Students should be gathered to learn from others through practical exercises and interaction. In that way, both money and time spent in class can be reduced. Kahn Academy is a successful example of this kind of teaching. The non-profit organization provides an extensive library of contents (BEARD, 2014). Traditional universities, such as Harvard or Stanford, have also offered classes for free. (LEWIN, 2013). Such a system has made knowledge more accessible. However, students, who attend these programs, are not more likely to be hired. Information should be provided to help recruiters recognize those online degrees and certificates to be as valuable as traditional degrees are. Finally, reforms in educational systems are able to help unemployed young obtain a job. Despite the crisis, companies are still looking for talented students. Highly Connect on 5
6 valuable skills can be learnt online for less expensive cost. With the support of parents, it must be possible to reduce the risks of social instability by providing better access to valuable degrees, which have to be focused on growing sectors. Entrepreneurship and education: Two related means to developing sustainable stability To conclude, our world is experiencing big changes. We must be courageous and seize all the opportunities this transition has created. The way we will face these next years is decisive. Leaders of today and leaders of tomorrow have to work together in order to support entrepreneurship and to widen access of high quality education. As Warren Benni said, [L]eadership is the capacity to translate vision into reality. Let us seize the opportunities to translate a better vision of the world into reality. Connect on 6
7 BEARD, A Salman Khan - Khan Academy. [online] Available at: [Accessed: 31 Jan 2014]. Biox.stanford.edu Bio-X Stanford University. [online] Available at: [Accessed: 31 Jan 2014]. BLANK, S Why the Lean Start-Up Changes Everything. [online] Available at: [Accessed: 31 Jan 2014]. COHEN, G. & HOCHBERG, Yael V Accelerating Startups: The Seed Accelerator Phenomenon, University of Richmond and MIT. THE WORLD BANK Smarter Regulations for Small and Medium-Size Enterprises. Doing Business [report] The World Bank & The International Finance Corporation pp LAUVERGEON, A UN PRINCIPE ET SEPT AMBITIONS POUR L INNOVATION. [report] Paris: Commission Innovation [Accessed: 31 Jan 2014]. JOBS, S Steve Jobs' 2005 Stanford Commencement Address. [video online] Available at: [Accessed: 31 Jan 2014]. MOLLICK, E The dynamics of crowdfunding: An exploratory study. Journal of Business Venturing, 2014, vol. 29, no 1, p LEWIN, T Students Rush to Web Classes, but Profits May Be Much Later. New York Times, 6th January. SEMMELMANN, K STOP BEING THE CURRENT. [essay] 43rd St. Gallen Symposium. 0Semmelmann.ashx [Accessed: 31 Jan 2014]. SEELIG, T What I Wish I Knew When I Was 20, HarperCollin, p SCHUMPETER, J Capitalism, Socialism and Democracy. SZYKULLA, P de Xavier Niel, formation de Thierry Marx : le drame de l'enseignement républicain. [online] Available at: [Accessed: 31 Jan 2014]. Connect on 7
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