In the United States, small entrepreneurs generated between 60% to 80% of all new jobs since the 1990s, and there is a pop-culture that celebrates the celebrity entrepreneur profile with shows like Shark Tank and The Profit. While this entrepreneurial environment feels exciting and innovative, there is a real – and imminent – economic danger when we consider the slowing growth of new venture creation. In 2016, CNN reported that the number of start-ups in the US continues to decrease, dropping to the lowest level since the mid-1970s.
The danger of our new economic reality has also been shaped by a convergence of several different circumstances, including a challenging economy especially since the 2008 financial crisis, where the current tenure with most employers is just 3 to 5 years. Facing these clear and present economic dangers, there is an urgent need for new entrepreneurs. However, how are we preparing people – especially students – to participate in building this new economic reality?
Born entrepreneurs? Renewing an old debate?
There is an interesting debate that has re-emerged in the field of entrepreneurship about the concept of the born entrepreneur. Three decades ago, that conversation centred on the concept of entrepreneurial traits, which did not seem to hold much water. Today, there has been a shift to investigating genetic factors that might play a role in determining whether someone has an inclination toward entrepreneurship. Regardless of the debate, we do see early signs of entrepreneurship in children, even as young as 4 or 5 years old.
On a warm summer day in the United States, you would be hard-pressed to find a neighbourhood without young children standing at the roadside selling glasses of lemonade to passers-by. While these small businesses are certainly not innovative – and generally they’re supported by good-natured adults – they do demand the creation of a modest infrastructure, including a physical point of sale, marketing campaign, supply-chain management, accounting and partnerships. In fact, American children and adolescents often start a variety of small businesses – from shovelling snowy driveways and cutting lawns to babysitting and selling baseball cards – as a simple means to gain a measure of financial independence. Still, there is a clear interest in business creation – in fact, a recent survey we conducted of career interest in 13- to 19-year-olds in the United States identified entrepreneurship as their preferred career choice. Yet despite the need to create a workforce that possesses an entrepreneurial mind-set, primary and secondary schools do little, if any work, to prepare students for, or engage them in, such a future.
Is our current model of entrepreneurship education effective?
A growing number of US secondary schools are engaging in teaching entrepreneurship, like the Network for Teaching Entrepreneurship, but most students do not receive any exposure to entrepreneurship courses until they reach the university level, where the number of programs has been growing during the last two decades. The typical curriculum, however, is generic and focuses on teaching skills – like how to write a business plan – rather than providing opportunities for a holistic approach toward driving a real desire and intention to start a business, and the results are inconclusive at best.
Most programs in higher education are targeting young adults or executives who are already interested in the field of entrepreneurship and focus on entrepreneurial skills and roadmaps rather than on the motivational factors, like self-efficacy, that would help students develop entrepreneurial intention.
Creating intention from the earliest age
Entrepreneurial self-efficacy (the way a person feels about his or her ability to perform a specific task related to entrepreneurship) is a crucial antecedent to entrepreneurial intention. During a child’s development, how they organise their interests is driven in part by the formation of competencies – as they begin to feel more (or less) competent in certain areas, they will, understandably, form higher (or lower) levels of interest in those activities. From the onset of middle childhood, children are able to realistically differentiate their competencies as part of their cognitive and social development.
Moreover, in a society where nearly half of all entrepreneurs come from a family of entrepreneurs, it is not hard to imagine how their background may have helped them develop both competencies and confidence in entrepreneurship from an early age.
It’s not just about skills
While the development of skills is an important factor in creating a positive sense of self-efficacy, research shows that there are background variables that also shape an individual’s perceptions. Gender has been shown to play a significant role in how adolescents perceive their abilities in areas like math and science, and we see that impact leading to a smaller number of females who consider entrepreneurship as a career choice. A recent study we conducted investigated the background factors of gender and dyslexia, a learning disability, in a population of adolescents to uncover whether there were any differences in those populations in relation to their perceptions about their ability to engage in the tasks necessary to be a successful entrepreneur – and whether that impacted their interest in starting their own business.
Not surprisingly, both females and male and female students with dyslexia showed lower entrepreneurial self-efficacy perceptions, and females indicated lower intentions to start a business. For example, both students with dyslexia and females showed a significantly lower level of self-efficacy perceptions in the areas of problem solving and managing money. While both gender and having dyslexia were important factors, the surprising finding was in regard to gender – dyslexia played a role only in the male population; being female showed a greater negative impact in self-efficacy perceptions and intentions, indicating that while both of those (and likely many other) personal-level variables are important to consider, gender is a significantly strong factor in the self-efficacy and intention equation.
What should schools do?
Primary and secondary schools should be harnessing the early interest adolescents have in entrepreneurship at the opportune developmental time – which is well before they reach university. Fusing what we know from the fields of developmental and social psychology and entrepreneurship, schools can implement effective instructional models, incorporating a curriculum that considers the student audience, including their personal-level variables. By developing entrepreneurial skills and confidence, schools can help young students step out from behind the lemonade stand and into their next venture.