3 Ways Universities Are Fostering Entrepreneurship

Higher-level institutions are playing an increasingly important role in creating the next generation of entrepreneurs.
3 Ways Universities Are Fostering Entrepreneurship
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This article was translated from our Spanish edition using AI technologies. Errors may exist due to this process.
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Currently, there is a growing number of programs worldwide oriented to entrepreneurship. There is even a ranking from The Princeton Review that evaluates the main universities to study entrepreneurship at the undergraduate and graduate levels. Curiously, these lists of 50 universities at each level are made up of only North American universities with the exception of Tecnológico de Monterrey, which ranks fifth in the undergraduate category in its 2021 edition.

Multiple scientific studies on entrepreneurship ecosystems have verified the interdependence of actors in them, where universities, the government and entrepreneurs, among others, are the most relevant to promote entrepreneurship activities. In this article, I will focus on the specific actions of universities as triggers and drivers of entrepreneurial activity. It is worth mentioning that there is also a lot of research in progress on the development of entrepreneurship in university students and the largest is the Global University Entrepreneurial Spirit Students' Survey or GUESSS for its acronym. The OECD also conducted a study in Germany on how universities lead the way to entrepreneurship and the World Economic Forum published an article on how to build entrepreneurial universities, both taken into account.

According to the GUESSS 2018 global report , the university context plays a key role where entrepreneurship education and entrepreneurial culture are determinants of the entrepreneurial intentions and activities of students. If you analyze the list of universities to study entrepreneurship from The Princeton Review and cross it with the ranking of global ecosystems published by Startup Genome, you will find that they coincide in most cities. It is no coincidence that the presence of highly educated universities coincides with the development of the entrepreneurial ecosystem. As is the notorious case of Silicon Valley, where there are more than 10 universities, the most important are Stanford and UC Berkeley.

The government on its own also has a key role, since it can create programs and public policies that regulate activities, either by encouraging productive sectors and / or improving the conditions to open companies, as well as having conditions of intellectual property rights to exploit opportunities.  However, I am convinced that universities have a much less politicized mission that favors the ecosystem and are already knowledge centers that are barely being recognized as catalysts for entrepreneurship.

An example is a country very far from the United States that has realized this potential, Qatar in the Middle East, the headquarters of the 2022 FIFA World Cup, which, since 1997, as part of the Qatar 2030 National Vision, initiated the development Education City, a 12-square-kilometer compendium of infrastructure that is home to eight international universities, research institutes, business incubators, technology and cultural parks and more.

This year, I am coordinating the deployment and implementation of the GUESSS project in Qatar for the first time from my trench at HEC Paris University in Qatar, as a postdoctoral researcher of the entrepreneurship ecosystem. I have witnessed the joint effort of key players to promote a long-term strategic plan (Qatar National Vision 2030) that includes innovation, science and entrepreneurship as axes for the transformation of the economy and to move from being based on oil and gas to be based on knowledge. I have written a book about this ecosystem of entrepreneurship and, when comparing what is done in other parts of the world with my experience in studying ecosystems of emerging economies, I came to the conclusion that there are three ways in which universities are contributing to the development of the ecosystem where they are established.

1. As a hotbed of talent

According to the Global Entrepreneurship Monitor, there are approximately 582 million entrepreneurs in the world. That's 7.7% of the world's population. This means that more than half of the world works or will work for some company or organization. However, most aspire to be an entrepreneur and therefore not all manage to do so. There may be various reasons, such as fear of failure, lack of education, lack of capital, ignorance, etc.

Universities, for their part, are already a filter of people who have reached a higher educational level and aspire to have better working conditions one day. Universities are increasingly competitive among others and seek international accreditations such as QS Ranking, Financial Times, EQUIS, AACSB, EMBA , etc. It depends on the field of study, but something that is common in the rankings is that they are asked to monitor the labor insertion of former students — that is, to know what they work in after graduating, if there were salary increases, if it took them a long time find work, and now also, if they are partners in a business.

This reflects that the university has a critical role not only to prepare the workforce of existing organizations, but also to prepare the next generation of entrepreneurs. Entrepreneurship is known to be recognized as the main engine of economic development due to its contribution to internal production and job creation. Consequently, today there is an update and expansion of study programs in universities to incorporate the development of skills and acquisition of knowledge aimed at entrepreneurship. Many are taking interdisciplinary approaches and new teaching methods in such a way that, before graduation, students have already experienced in a controlled environment how they can start a business idea. In more developed entrepreneurship ecosystems, students are having this type of internship with local companies, so the relationship with the industry is increasingly important for universities.

2. As an incubator for business ideas

Regardless of whether students are pursuing specific programs such as a bachelor's degree in business creation or an MBA in entrepreneurship and innovation, universities make available to all schools (medicine, humanities, architecture, engineering, etc.) and interested collaborators, programs incubation of companies. Some even accelerators and technology transfer offices, but I will discuss the latter in the next section. On the part of the university business incubators, they are working more as headhunters or hunters of internal projects that the students are developing in different programs and courses, to help them not to get lost and to be followed up. To achieve this, they organize entrepreneurship competitions with attractive prizes for the winning projects.

University business incubators are empowered to provide specialized mentoring, training, and normally function as an autonomous institute from the university. Many provide physical space and support with obtaining capital at an early stage for the development of the business model. In most cases, the faculty has an important link with the incubator or entrepreneurship center of their university since they can participate as mentors, but, more importantly, they are those who know closely about projects that originate in the classrooms and they can channel them.

3. As a mentor in knowledge transfer

Universities that also do applied research as part of their accreditation activities are growing in number of patents, articles and registered intellectual property rights. Faculty members and students are collaborating increasingly closely on research projects where experience and creativity converge. Likewise, universities have the possibility of attracting funds for research by having recognized researchers.

The problem is when investigations remain in publications and are not exploited as a business opportunity. Therefore, another way in which universities are contributing to the development of the local entrepreneurship ecosystem is by establishing links with the industry and advising on the transfer of knowledge. Knowledge transfer can take place through licenses, consulting, spin-offs, among others. Thus, recognizing this potential, universities sometimes open technology transfer and / or research offices so that they do not miss out on opportunities that they own.

MIT has been one of the most recognized examples in the creation of a university micro ecosystem that favors the transfer of research and development for innovation. This university has four centers for research support and five more for direct support to students, plus student associations focused on scaling technology-based entrepreneurship and innovation projects.

Somehow the proximity between universities, research centers and universities is giving results in already more mature entrepreneurship ecosystems. The difficult thing is to recreate the conditions in other countries with different economies, different cultures, laws, etc. That is why what I suggest is not to replicate a Silicon Valley, but to understand what works for them and adapt to local conditions while evaluating the development you are having. The evaluation of entrepreneurship ecosystems is normally done by total risk capital raised by companies, number of outlets in public offering or IPOs, and number of startups created. For universities, it is recommended to carry out a very similar follow-up and update evaluation among alumni, for which the GUESSS can serve very well.
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