An Entrepreneurial Development Framework for Institutions of Higher Education

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Introduction

With increased globalization people have seen the need to increase wealth creation especially within the underdeveloped Third World. It has also become evident that either the government nor the formal sector can supply the necessary job creation without a sustained effort and partnerships between all sectors of the economy. One means of creating work opportunities will be the development of entrepreneurial and innovative skills within the country. The creation of such job opportunities by encouraging entrepreneurial innovation has been well illustrated by Dana, Korot and Tovstiga (2005: 12) in Silicon Valley, Israel, Singapore and the Netherlands. These authors report that in the narrow 35 mile by 10 mile corridor within Silicon Valley 6,500 technology enterprises are located. Singapore is home to almost 100,000 entrepreneurs and had a GDP GDP of US $ 42,948.00 during 2004 and an annual growth rate of 8.8% (Singapore Statistics, 2006).

In addition higher education has become a prime export commodity of total world services trade, amounting to a staggering 3% (Grundling & Steyngberg, 2006: 5). With the increased interest in entrepreneurial innovation as an economic driver there is a need to develop expertise within this area. Thus there is a need to develop entrepreneurial innovation knowledge within higher education institutions to ensure the maintenance of a competitive edge in an under developed market. Dana, et al. (2005: 10) define knowledge as "the integration of information, ideas, experience, intuition, skills and lessons learned that creates added value for a firm". In addition Dana et el. (2005) define innovation as "the process by which knowledge is transformed into new or significantly modified products and / or services that establish the firm's competitive edge". It can thus be seen that it is imperative that higher education in South Africa actively pursue a policy to encourage entrepreneurial innovation to ensure the creation of expertise, the development of new industries and the empowerment of students to establish them within an entrepreneurial innovative culture. Higher education will be required to become a key player in domesticating knowledge and diffusing it into the economy in order to serve as engines for community development and social renewal (Grundling & Steynberg, 2006: 6).

Problem statement

The research question under discussion is formulated as What minimum requirements should be set in an entrepreneurial and innovation framework in order to support entrepreneurial and innovation knowledge creation at institutions of higher education?

Purpose

This article attempts to develop a framework to encourage entrepreneurial thinking within a higher education environment, taking into account consideration policy and infrastructural requirements, knowledge creation foundations and institutional arrangements.

Policy intervention

Policy initiatives within higher education institutions are essential to establish guidance for entrepreneurs, funding agencies, industry, labor in general and for students and institutions of higher education in particular. From a higher education perspective government as well as institutional policy requirements will be discussed in brief.

· Government policies

If this is to be accomplished it will require government intervention to construct policies which should include the reduction of taxation in the form of capital gains tax rate, providing incentives for increased spending on research and development, encouraging active venture capital markets, an alteration of the 'hiring and firing' labor regulations, and encouraging the spending on new technology shares (Da Rin, Nicodano & Sembenelli, 2005: 8).

· The higher education institution policies

The higher education institution must provide a working atmosphere in which entrepreneurship can thrive. Venkataraman (2003: 154) suggests that it is not merely the injection of capital that gains the development of entrepreneurship. Rather, it is the tangible infrastructure essentials such as capital markets, advanced telecommunications, sound legal and transportation systems. In addition, intangible components must be in place. These intangibles are access to novel ideas, informal forums, role models, region specific opportunities, access to large markets, safety nets and executive leadership. As policy within the institution is developed it must consider and include a planning process to accommodate these essentials.

Policy must also augment the entrepreneurial culture within the higher education institution as a new mindset of students must be established from one of expecting to be employed, to one of providing work opportunities for others. Technology licensing offices (TLOs) must be established at the higher education institutions. Stanford University sponsored research expenditures of US $ 391 million generated 25 TLO start ups in 1997 (Gregorio & Shane, 2003: 209). An investment in patent rights by the higher education institutions will ensure future capital investments into the institution. Intellectual property (IP) policies should be framed so as to capture the wealth generated and to distribute it equitably among investors, partners, the university and the entrepreneur. Such rewards will generate future interest for both the investors and the entrepreners. Policies, procedures and network contacts to capture capital capital must be established.

Research and Development policies in entrepreneurship must be refined and focused. Currently, the focus of entrepreneurial research at Tshwane University of Technology in South Africa falls within the three niche areas of business clustering, business development and management of innovation. In each of these niche areas it will be necessary to develop Masters and Doctoral programs in entrepreneurship and innovation. This in turn will mean a need for the improvement of the staff qualification profile within these areas. Along with the Masters and Doctoral programs, accredited research outputs must be produced in entrepreneurship and innovation (Grundling & Steyngberg, 2006: 6). In addition to the Masters degrees in Entrepreneurship and the Masters degree in Comparative Local Development, a Masters degree in Cognitive Reasoning should be considered for the future. Such a course should include a thorough foundation in finance reasoning along with creative thinking and business planning.

Institutional structures to be established

The higher education institution will have to establish itself as a seamless knowledge node into which a variety of parties can contribute. Parties contributing to such a knowledge node may include industrial partners, specialists from industry, relevant government agencies, foreign investors, community forums, labor unions, academic specialists, research foundations, funding agencies, students and potential entrepreners. Such a node would provide the necessary contact between entrepreneurs, funding agencies, industry and labor. This will ensure exposure of research and innovative ideas to the relevant parties. It would also provide a relevant export / import platform for entrepreneurship within the country. In addition to this, regular colloquia should be held to allow potential entrepreneurs to expose their innovative ideas to the funding agencies. An information network connecting entrepreneurs to venture capitalists should be established within this knowledge node.

Such forums would allow industrial partners to present commercially-oriented research proposals to the higher education institution which funding agencies in turn would be willing to fund. Gregorio and Shane (2003: 212) also emphasize the need for the higher education institution to demonstrate intellectual eminence. It is suggested that better quality researchers are more likely to exploit inventions than less qualified researchers. The intellectual eminence also makes it easier for researchers involved to start enterprises and to exploit their inventions (Gregorio & Shane, 2003: 212). In addition, more eminent researchers provide a better knowledge base and this in turn will attract better qualified researchers and students. To ensure an intellectual eminence of their outputs, higher education institutions should select students carefully.

The higher education institution should also encourage the development of incubators, either close to the institution or close to the involved industry. This will certainly influence the start up capital expenditure. Gregorio and Shane (2003: 213) suggest that such incubators would allow entrepreneurs to "ripen" technologies in close proxies to inventors and specialists.

The establishment of technology parks could be instituted at the institution. Dana, et al. (2005: 12) report that the first technology parks were established in the Netherlands. It is hardly surprising that the Netherlands is one of the leading nations in promoting entrepreneurship, comparing faviously with Israel, Singapore and Silicone Valley. Perhaps such parks could have been established in conjuction with the government and serve to expose students to the entrepreneurial culture.

Information networks connecting entrepreneurs to venture capitalists should be established within the higher education institution. Dushnitsky and Lenox (2004: 618) reinforce this view. Gregorio and Shane (2003: 214) also recommend that in exchange for taking an equity stake in TLO start-ups the institution should pay patenting, marketing or other up-front costs. These measures would encourage the formation of start-up enterprises. Furthermore, locating a higher education institutional foundation presence in physical procurement to the enterprises donating the capital might be an advantage (Gregorio & Shane, 2003: 211).

Strategy to develop an entrepreneurial innovative culture

· Re-regulation of syllabi within Entrepreneurship programs

When training entrepreneurs two realms of knowledge should be recognized, "tacit" and "explicit". "Explicit knowledge is easily identifiable, easy to articulate, capture and share. By contrast, tacit knowledge consists usually of intuition, feelings, perceptions and beliefs, often difficult to express and there is difficulty to capture and transfer." Of the two, tacit knowledge carries the greater value in that it is the essence of innovation "(Dana et al., 2005: 10). Sometimes an illustration given by Ali (2001: 339) serves to illustrate the difference between the skills involved in producing an artifact. The engineer is a man of action developing mental skills but seldom having the opportunity to develop manual skills. The craftsman uses his hands more than his head, tools more than instruments and rarely uses science or mathematics. Both are geared towards inventing. The engineer is concerned with ideas and artifacts, while the craftsman is concerned with the making of artefacts. The craftsman has no ready made methods and the technique is devised during the process. The engineer draws mainly on explicit scientific skills while the craftsman draws on intuitive, tacit knowledge. This person is involved in the creation of something new, an innovative skill. The engineer's plans and blueprints may well involve tactic knowledge.

In curriculum design one must recognize the difference between infrastructure supporting recursive skills which are typically routine in nature and infrastructure supporting the nurturing of innovation and making skills. These involve design, innovating, communicating in groups, problem solving, face-to-face communication, idea generation and group-work (Ali, 2001: 41). Brown and Duguid (1991) quoted by Ali (2001: 342) make use of the expression "communities of practice" to describe the social context for developing work, learning and innovation. Lin, Li and Chen (2004: 4) and Markman and Baron (2003: 291) make use of the term "social capital" to describe the ability to establish networks of supporting relationships. This ability is seen as a means of mobilizing environmental resources to overcome obstacles and threats within the entrepreneurial process. Others have noted how important social capital is in the creation of new business ventures. Lin, et al. (2004: 4) recognize the need for formal and informal funding relationships within the business environment. Such entrepreneurs are termed "business angels" for they gain access to required resources, such as capital investors, qualified distributors and talented employees from the external environment. Lin, et al. (2004: 6) thus regard social capital as "entrepreneurial social infrastructure". Harris, Forbes and Fletcher (2000: 125-126) suggest that planning "dampens" the entrepreneurial spirit and that emergent problems tended to be better training triggers than planned approaches. It is suggested that the learning style for entrepreneurs should be one using facilitators, learning by doing, interactive classroom approaches, peer group work, problem solving, grasping opportunities and holistic approaches. It is recommended that inputs should be made by outside speakers and entrepreneurs (Harris, et al., 2000: 126). Johnson (1987: 31, in Harris et al., 2000) states that an entrepreneur's planned approach to any problem should be problem awareness, problem diagnosis, the development of solutions and the selection of a solution. Once again the need for "an emergent" approach rather than a "planned approach" is emphasized. In addition, Harris, et al. (2000: 133) emphasize the need for long standing close relationships in the development of the entrepreneur. Such partners can share vision, and serve as sounding boards for ideas and concerns. These relationships are vital for the development of innovative thinking. The findings suggest that entrepreneurs must be trained in a less structured way, which involve group work, class discussions, specialist input, a concentration of social skills, communicating and conflict management. The methodology must involve face to face contact and the developing of lasting relationships.

Another factor that should be written into the curriculum is the ability to deal with problems that arise and then to reschedule goals so as to accommodate the new situation. This is clearly illustrated by Ireland, Kuratko and Morris (2006: 12) showing the presence of internal and external triggers of corporate entrepreneurship. External triggers that encourage entrepreneurship arise from developments in the external environment. These include diminishing opportunities, rapid changes in technology, labor shortages, aggressive moves by competitors, change in the market structure or regulatory threats. Internal triggers include employee rewards, directives from managers, tension between staff, problems with cost control, etc. Ireland, et al. (2006: 12). Triggers for entrepreneurship may be summed up in the statement "necessity is the mother of invention". This once again emphasizes the need for trainers to concentrate on the entrepreneurial process rather than the content, with particular emphasis on change, the unexpected and resolving problems that emerge within any particular process.

Markman and Baron (2003: 288) regarding self-efficiency as an important success factor in developing entrepreneurs. Self-efficiency is defined as "the amount to which persons believe that they can organize effectively, execute actions to produce given attainments" (Bandura, 1997 quoted by Markman and Baron 2003: 288). Successful entrepreneurs will have high self-efficiency and tend to believe that their actions will lead to a successful venture. It is also proposed that entrepreneurs need to recognize opportunities from possible businesses. In addition it is suggested that entrepreneurs need perseverance and need to be able to overcome adversity and uncertainty. The curriculum should contain training on self esteem, reliability, perseverance, over setbacks, having a vision, setting goals and rescheduling if things go wrong.

Boussouara and Deakins (1999: 204) suggest that a gradual approach into a high technology business can be an advantage in that it allows time to develop contacts, strategy, and networks as well as gives time to acquire funding and income. The latter authors emphasize the need to acquire market-based knowledge for a successful business (Boussouara & Deakins, 1999: 205). It is recommended that networks and external business agents present relevant market research to the trainees. These finds should be brainstormed and shared in the larger group.

Conclusion

In this article an attempt has been made to develop a framework for the development of entrepreneurial thinking within a higher education environment. This framework needs to be supported by government policy initiatives and include taxation incentives for entrepreners, encouraging investment in research and development, incentives for industry for active venture capital and alterations to the labor law to accommodate small entrepreneurial industries. In addition techno-parks should be developed in conjunction with government to expose students to the entrepreneurial culture.

Research should be done within the business development niche area to investigate these policies and communicate the needs to government. If the government officials are participating in the knowledge node it may provide the necessary exposure to government.

Policy initiatives from within the higher education institution should establish the knowledge node which should include academic specialists, research foundations, relevant government officials, industrial partners, specialists from industry, foreign investors, community forums, labor unions, funding agencies, students and potential entrepreners. Information networks connecting entrepreneurs to venture capitalists should be established within this knowledge node. Intellectual Property policies should be developed by the business development niche area to ensure that possible TLO start-ups within the higher education institution are protected and that patenting, marketing or other up-front costs are paid by the higher education institution or associated enterprises. The higher education institution could liaise with the Innovation Hub established in conjunction with the CSIR. A cooperation agreement could benefit both parties. Research should be carried out by the business clustering niche area to select the most appropriate combinations and networking within the knowledge node.

To ensure intellectual eminence the correct researchers, academies and industrialists should be chosen within the entrepreneurship cluster. Incubators and TLOs should have been founded to "ripen 'developing technologies and to form small innovative industries. Research within this area could have been done by the niche areas business development and management of innovation.

A funding agency for the entrepreneurship innovation (previously termed the institutional foundation) could have been located close to the industry partners for fundraising. All three niche areas should be actively networked with industries on an ongoing basis, communicating needs and proposals.

A teaching strategy should be developed to foster tacit knowledge development. Group work, problem solving, idea generation, innovating, designing and face to face communication should be extensely used. Smaller classrooms need to be utilized allowing for group work. Curriculum should include topics like self efficiency, perseverance and the need to overcome adversity. In addition market-based knowledge should be presented by specialists from the industry on an ongoing basis. Networking should be a normal part of the curriculum and will allow venture capitalists to be connected to the innovations developed within the knowledge node.

If South Africa and institutions of higher education do not see the need to develop entrepreneurship within all communities, people may be delegated to a life of poverty, with no opportunity to work or to develop South Africa's rich natural resources for future generations.

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