An Entrepreneurial Development Framework for Institutions of Higher Education

IntroductionWith increased globalization people have seen the need to increase wealth creation especially within the underdeveloped Third World. It has also become evident that neither 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 per capita 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 & Steynberg, 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 empowering of students to establish themselves 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 statementThe 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?PurposeThis 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 fundamentals and institutional arrangements.Policy interventionPolicy initiatives within higher education institutions are essential to establish guidance for entrepreneurs, funding agencies, industry, labour 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 policiesIf 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’ labour regulations, and encouraging the spending on new technology shares (Da Rin, Nicodano & Sembenelli, 2005:8).·The higher education institution policiesThe higher education institution must provide a working atmosphere in which entrepreneurship can thrive. Venkataraman (2003:154) proposes that it is not merely the injection of capital that enhances the development of entrepreneurship. Rather, it is the tangible infrastructural 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 between investors, partners, the university and the entrepreneur. Such rewards will generate future interest for both the investors and the entrepreneurs. Policies, procedures and network contacts to capture venture 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 Doctorate programmes 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 Doctorate programmes, accredited research outputs must be produced in entrepreneurship and innovation (Grundling & Steynberg, 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 establishedThe 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 might include industrial partners, specialists from industry, relevant government agencies, foreign investors, community forums, labour unions, academic specialists, research foundations, funding agencies, students and potential entrepreneurs. Such a node would provide the necessary contact between entrepreneurs, funding agencies, industry and labour. 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 lesser 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 proximity 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 favourably with Israel, Singapore and Silicone Valley. Perhaps such parks could be established in conjunction 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 proximity to the enterprises donating the capital might be an advantage (Gregorio & Shane, 2003:211).Strategy to develop an entrepreneurial innovative culture·Re-curriculation of syllabi within Entrepreneurship programmesWhen 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 predominately of intuition, feelings, perceptions and beliefs, often difficult to express and therefore difficult 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). Perhaps 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 might 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 designing, 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, suitable 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 proposed 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, labour 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 emphasis 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) regard self-efficacy as an important success factor in developing entrepreneurs. Self-efficacy is defined as “the extent 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-efficacy and tend to believe that their actions will lead to a successful venture. It is also suggested 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 thus contain training on self esteem, reliability, perseverance, overcoming 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 thus recommended that networks and external business agents present relevant market research to the trainees. These findings should be brainstormed and shared in the larger group.ConclusionIn 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 entrepreneurs, encouraging investment in research and development, incentives for industry for active venture capital and alterations to the labour 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 government officials are participating in the knowledge node it might 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, labour unions, funding agencies, students and potential entrepreneurs. 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, academics and industrialists should be chosen within the entrepreneurship cluster. Incubators and TLOs should be founded to “ripen’ developing technologies and to form small innovative industries. Research within this area could be done by the niche areas business development and management of innovation.A funding agency for the entrepreneurship innovation (previously termed the institutional foundation) could be 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 extensively used. Smaller classrooms need to be utilized allowing for group work. Curricula should include topics like self efficacy, 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.ReferencesALI, Y. 2001. The intranet and the management of making and using skills. Journal of Knowledge Management, 5(4):338-348.BANDURA, A. 1997. Self-efficacy: The exercise of control. New York: W.H. Freeman & Co.BOUSSOUARA, M. & DEAKINS, D. 1999. Market-based learning, entrepreneurship and the high technology small firm. International Journal of Entrepreneurial Behaviour & Research. 5(4):204-223.BROWN, J.S. & DUGUID, P. 1991. Organisational learning and community-of-practice; towards a unified view of working, learning and innovation. Organization Science, 2(1):40-57.DANA, L-P., KOROT, L. & TOVSTIGA, G. 2005. A cross-national comparison of knowledge management practices. International Journal of Manpower, 26(1):10-22.DA RIN, M., NICODANO, G. & SEMBENELLI A. 2005. Public policy and the creation of active venture capital markets. Journal of Public Economics. Article in press.DUSHNITSKY, G. & LENOX, M.J. 2005. When do incumbents learn from entrepreneurial ventures? Corporate venture capital and investing firm innovation rates. Research Policy, 34:615-639.GREGORIO, D.D. & SHANE, S. 2003. Why do some universities generate more start-ups than others? Research Policy, 32:209-227.GRUNDLING, J.P. & STEYNBERG, L. 2006. MTech Entrepreneurship, Entrepreneurial Techniques VA. Pretoria: Centre for Entrepreneurship, Tshwane University of Technology.HARRIS, S., FORBES, T & FLETCHER, M. 2000. Taught and enacted strategic approaches in young enterprises. International Journal of Entrepreneurial Behaviour & Research, 6(3):125-145.IRELAND, R.D., KURATKO, D.F. & AND MORRIS, M.H. 2006. A health audit for corporate entrepreneurship: Innovation at all levels. Part 1. Journal of Business Strategy, 27(1):10-17.JOHNSON, J.M.G. 1987. Entrepreneurial intentions and outcomes: A comparative causal mapping study. Journal of Management Studies, 34(6):895-920.LIN, B-W., LI, P-C. & CHEN, J.S. 2004. Social capital. Capabilities, and entrepreneurial strategies: A study of Taiwanese high-tech new ventures. Technological Forecasting and social change. Article in press.MARKMAN, G.D. & BARON, R.A. 2003. Person-entrepreneurship fit: Why some people are more successful as entrepreneurs than others. Human Resource Management Review, 13:281-301.SINGAPORE STATISTICS. 2006. www// economic%20indicators Accessed on 28/01/06.VENKATARAMAN, S. 2003. Regional transformation through technological entrepreneurship. Journal of Business Venturing. 19:153-167.

The Importance of Education in Today’s Society

So, do you believe that EDUCATION is absolutely necessary in today’s society? Does being educated make a significant difference in someone’s life?Education is the process of learning and acquiring knowledge at school from a teacher, receiving knowledge at home from a parent, a family member, and even an acquaintance. Education is a key that allows people to move up in the world, seek better jobs, and succeed in life. Education is one factor that affects job positions people hold, advance in their further career, the income they make, and the title they hold. The more educated a person is, the more prestige and power that person holds.However, unfortunately we have places in the world, where not everyone has an opportunity or chance to receive formal education. India is amongst the countries, where there is a high population of people who are illiterate. Almost, 55% of the population in India is illiterate. Partly, because most of the country resides in villages and not in cities, where education is more prevalent. Most of the people living in villages spend majority of their time in cultivating crops and harvesting their fields and don’t find it necessary to be educated in order to harvest their fields or to do household chores. The girls living in villages marry at a young age and later get busy with family and doing household chores. According to Indian belief, girls commonly get married at an early age and are advised to stay home and take care of the household instead of studying or working. That’s the reason why lot of parents in India are worried about getting their daughter married rather than her education. I can give you an example in my own life. When I was in India I wanted to get further education and fulfill my dream. On contrary to what society thinks, I wanted to pursue my career in the health care field to serve my own community. The support from my family, especially my grandfather, gave me the strength to keep my dream alive. I was 18 years old when we moved to the United States, and the transition to a country that is different culturally, academically, and politically was not easy. I did not know what I could do with my life when I came to the States. The transition was difficult for my parents as well. The need for finding a business, concern about my sibling’s education and me and adjusting in a new environment was definitely challenging. After doing most of college in India, it was hard for me to start over my college education. My dad’s brother, who is a physician, inspired me to keep my dream alive to pursue a career in medicine. I started my education at the community college, where I struggled with most of my classes in the first year as the educational system was different than the one I was used to. I joined clubs and other organizations at the college to know more about the medical careers. I got the knowledge that I required for pursuing a career in medicine but still, I had never experienced how things are in the real world of medicine. I have done everything that I could to help me fulfill my dream. I am currently an Emergency Medical Technician and I enjoy working in the allied health field.I think being educated is the most important thing not only for success in one’s life, but the better educated population plays an important role in making a nation more successful and well rounded. Receiving formal education is vital, but to achieve success in life, informal education is essential. One can learn English, History, Math, Science in school, and be “book-smart”. Furthermore, one can learn how to live life by knowing what to say when, acting a certain way in specific situation, and be “street-smart”. You can have all the “book” knowledge in the world about a certain profession, but if you don’t know how to behave with your colleagues and your superiors than having “book” knowledge won’t take you too far. For example, if you are a Physician by profession, you have all the knowledge about the world of medicine and know much about health care, but if you do not have bed side manners and don’t interact well with your patients, co-workers, and the team, than what’s the point of having all “book” knowledge. To achieve success in life and reaching a point in life where people respect you for what you are is what makes a difference, because at that point you excel in both formal and informal education. Education is very important and no one should be deprived of it.”No nation can leave its security only to the Police and the Army, to a large extent national security depends upon the education of citizens, their knowledge of affairs, their characters and sense of discipline and their ability to participate effectively in security measure.” – Kothari commissionA well educated population represents a well secured, well developed, strong Nation.

Advantages to Converting to Education IRA

Converting to Education IRA may be one of the best things you can do when you are aiming to have some money saved up for your child. Converting to education IRA is not at all that difficult, so you might find these advantages motivating enough for you.It is deducted from your IRA for as much as $2000 a year for your child’s higher education expenses and needs. Before 2002, the deduction’s maximum is at $500 annually only. Under the category of higher education expenses and needs are tuition fees, books and other things that will be needed for tertiary education.Tax-Free Deductions from your IRAThe best thing about converting to Education IRA is that when you choose to withdraw the money at any time your child will need it, there will be no 10% deduction on your IRA. This is very convenient since this can be considered a very liquid asset.Some financial instruments with great returns have humongous tax deductions. With converting to Education IRA, you will be less inclined to lose money or time because of tax and you will find your money used purely for the educational needs in the future.Complementary to IRA of your spouseThe factors that affect the Education IRA that will be required from you will be complementary to the rates of your spouse and sometimes even the grandparents of your child, the beneficiary. This way, when you are converting to it, you will find that there will be more opportunity for synergy.Ensured to be exclusive for school expensesThe good thing you can experience when you are converting is that you will find that the money will be used solely for educational purposes only. Some other financial savings receptacles are less strict when it comes to withdrawing the money. No matter what happens, you will find the education of your child secure since it will not be used for other things.Ample window of time for your child beneficiaryYou can start filling up as early as the child is born when you are converting to Education IRA. Your child can avail of the money in the Education IRA when he or she reaches the age of 18. This benefits from it for your child will terminate when the beneficiary reaches the age of 30. Twelve years is considerable an ample window of time with which the beneficiary can finish his or her education.Flexibility and Openness to Converting to Other Educational PlansIf you think you have made a mistake converting to Education IRA and find that other financial instruments will work best for you, you can convert it at any time without really having to suffer. Sure, there may be some paper work involved but not so much to the point that you will be completely deprived of the right to handle your money effectively.Converting to Education IRA is a major decision. It will really affect the way your college education savings for your child will be administered, so make sure that you weigh properly the pros and cons of converting to Education IRA. Reduce the need to convert needlessly by really nailing down which of the available methods are going to work for you best.