Book Chapter: Published in ‘International New Enterprise Development’, by Konstantin Theile & Cíarán Ó hÓgartaigh (eds.), Aachen: Shaker Verlag, 2002.
Finbarr Bradley
Introduction
Breaking the link between economic growth and its many negative social and environmental consequences is generally meeting with little success internationally. Educators have a key role to play in helping redress this state-of-affairs since the work ethic and entrepreneurial spirit developed in schools and universities is a fundamental building block of the modern enterprise culture. Therefore, an understanding of entrepreneurship, how this should be stimulated, as well as the structure, mission and operations of educational institutions requires a radical rethink if educators are to respond appropriately to the needs of students in this new environment.
The nature of relationships and values such as attitudes, risk-taking behaviour and self-confidence play a major role in successful enterprise. Path-breaking educational initiatives, however, to reflect this new enterprise culture are not common as is obvious from the structure of enterprise programmes at leading US and European universities. These generally follow a traditional model by offering programmes of study that focus on technical aspects such as how to write a business plan, raise finance or design products, an inadequate response to the complexity, dynamism and values-driven ethos of the modern marketplace. In particular, these place little emphasis on the motivational factors that drive or retard the entrepreneurial spirit or the societal impact of private enterprise initiatives.
The time has come for universities to consider designing programmes which are imbued with sophisticated and modern whole-systems thinking which many do not possess at present. This chapter reflects on how a richer educational framework might be developed in order to stimulate an appropriate and consistent entrepreneurial ethos for the modern era. This will require a radical rethink of educational procedures, especially in assessing student performance. We assert, in particular, that degree programmes rather than focusing on individual courses, should concentrate on helping students add value by assisting them to balance or integrate economic, environmental and social impacts of business decisions. Students should be helped to optimise all three simultaneously, so-called trade-ons, rather than assume that compromise or trade-offs between these three are inevitable or the norm. A true enterprise education, for instance, should help students understand how to maximize eco-friendly resource productivity, by doing more and better with less, or redesigning products and services on industrial ecology models that mimic biological behaviour in order to produce zero waste.
Quality, Capital and Value
One of the primary reasons why universities are not truly innovative in the area of entrepreneurial education is that the design of courses is often based on the assumption that exposing students to the technical or functional aspects of business is sufficient to stimulate entrepreneurial activity. Since shareholder value is measured in monetary terms, this leads to an undue emphasis on quantitative rather than qualitative approaches also in education. This way of thinking replicates that at macro level in the economy. Since it is relatively easy to assess commercial rather than social and natural value, the yardstick of growth, Gross National Product (GNP), reflects “hard” measures of quantity over “softer” measures of quality. However, assigning no value to social and natural resources, or underestimating their value, as is largely the case at present, is deeply flawed. GNP includes the depletion of the natural resource base as an income item, excludes non-monetary exchanges but includes social and environmental calamities such as pollution cleanup, costs of dysfunctional families and communities.
In assessing environmental impact, using quantitative measures like GNP may reflect what is lost by a community as much as what is gained. The quality of the natural landscape, for instance, as Power (1996) points out is an essential part of a community’s permanent economic base and yet is often sacrificed to satisfy short-term industrial policies. These often destroy the unique qualities that make a particular locale attractive. Qualitative concerns about the preservation of natural areas or wildlife, about the quality of the air or water, or about the character of communities are not just aesthetic, moral or political concerns. A clean environment, good schools, and a host of other non-market provided qualities add to, or subtract from, both individual and group welfare and are of real economic value.
The importance of social capital, for instance, first noted by Coleman (1990), has been embraced by Putnam (1995) in his studies of the decline of community in contemporary America. Social capital is a measure of a society’s stock of shared values such as trust, honesty, empathy and keeping of commitments. It is the feature of social organisation such as networks, norms, and social trust that facilitates co-ordination and co-operation for mutual benefit. It is the basic glue that holds a society together and is critical for a healthy democracy, a vibrant and sustainable economy, and a vigorous and equitable civil society. It is an asset, engendering not only a significantly enhanced quality of life for the inhabitants of a community, but also conferring real advantages to public and private organisations.
Hawken, Lovins and Lovins (1999) illustrate by presenting comprehensive examples from the energy industry, automobiles, water and waste treatment, construction, food and real estate, that the world is on the verge of a new industrial revolution which promises to transform our notions about the way we do business. This will lead to a fundamental change in the relationship between producers and consumers as the economy shifts from an emphasis on the purchase of goods to the delivery of services and flows. It will entail a new perception of value reducing the importance of the acquisition of goods as a measure of affluence and stressing the continuous receipt of quality, utility and performance in order to promote well-being or quality-of-life.
A key challenge, therefore, for those engaged in enterprise education is to help students appreciate that a trade-off between economic, social and environmental development is not always inevitable and that the fundamental goal of building strong enterprises is to enhance all three simultaneously. Sustainable innovations and the companies that nurture them will increasingly reflect not balance but integration so the design of products and services can achieve all three together. As Nattrass and Altomare (1999) illustrate through the operations of a company like IKEA, successful, dynamic and leading edge companies will incorporate a new type of whole systems perspective to improve the triple bottom line, their so-called profits, people and planet. In the 21st century, the sustainable or evolutionary corporation will engage in the design of products, services, processes, and systems to create a future that includes prosperity and the healthy co-evolution of human and natural systems.
A new integrative paradigm is needed for enterprise educators to respond to this fundamentally different way of envisioning and creating successful enterprises. It will mean a shift from focusing on economic efficiency and financial returns that can be measured quantitatively to performance that is also assessed in terms of social equity and environmental sustainability. This shift from quantity to quality cannot be achieved by merely tweeking individual courses or by tinkering at the margins of a programme. It will require a far deeper and radical transformation of the educational institutions themselves, their structures, the way the education process is envisaged and especially the manner in which students’ roles and performance are assessed.
A Whole-Systems Perspective
The design and content of programme offered by universities are generally inconsistent with conventional thinking on the creation of sustainable and successful businesses. Individual courses such as accounting, economics, management, human resources and production are combined to form a programme but it is sometimes difficult to identify an overall theme or objective. Students, upon completion of their degree requirements, lack a coherent body of knowledge or a sense of how one discipline like marketing relates to another like finance. Often the content of each course stands on its own, and is designed so knowledge, techniques, formulae, rules of behaviour and so forth are easily transferred from the lecturer to the student. Even though access to and the availability of information itself is now widespread by means of the internet, acquisition of facts, methods or theories in the classroom by the student still remains the fundamental building block of enterprise education. Whether information, knowledge or wisdom is acquired by students depends on the calibre and commitment of the individual lecturer.
Yet in the present-day economy, value is increasingly created more by intangible assets such as ideas, ways of working, emotions and the culture of organisations than either through information or knowledge acquisition. Education programmes suitable in the past now fall short in supporting such an environment. Take accounting, marketing or management, for example. While making an important contribution in themselves, these subjects are increasingly inadequate, in isolation, to capture the manner in which value is created by knowledge-based companies. Accounting, for instance, records past transactions whereas value is created or destroyed when new legislation, technological breakthroughs or co-operative arrangements occur. Courses on professional ethics offer prescriptive rules of behaviour to ensure compliance with statutory legislative and regulatory requirements. In reality, moral considerations should be one of a host of factors such as risk, return, profitability and so forth which must be balanced within an integrated decision-making framework of the modern enterprise. The appropriate education for such an environment should be based more on the development of the capacity to balance competing objectives than the acquisition of knowledge about specific areas of business. This change of emphasis has not occurred in the majority of third level institutions. Traditional lecturing, often to large classes of hundreds of students, note-taking and periodic examinations by individual lecturers operating in isolation from their colleagues is still the norm in most of these. Inquiry-based learning or performing in order to strive to reach one’s own values and goals, not the approval of an outsider such as a lecturer, is the exception rather than the rule. This must change if a true enterprise culture is to be generated.
As Stirling (2001) points out, the traditional education approach is based on a managerial or mechanistic paradigm, overlaid by a utilitarian market philosophy. Students fail to see connections and patterns whereas in an ecological or whole-systems view of the world, the emphasis is on relationships. The thinking should be systematic rather than linear, integrative rather than fragmentary, concerned with process, emphasising dynamics rather than cause-effect and pattern rather than detail. It should be fundamentally concerned with recognising and realising wholeness. A change of educational culture towards the realisation of human potential and the interdependence of social, economic, and ecological well-being would lead to transformative or constructive and participative learning. This would engage the student in learning rather than the present transmissive methodology which is associated with the transfer of information and is merely instructive and imposed.
It is argued by some that situation-specific knowledge is not transferable. Yet as Seely Brown (1989) illustrates, it is becoming increasingly clear that abstract knowledge is not only very difficult to learn, it is also not particularly transferable. What is learned in lectures often cannot be carried beyond the lecture-room. Therefore, even students with a highly-developed classroom knowledge of a subject are unable to put that knowledge to use accept in classroom tests. Less-abstract situation-specific knowledge appears to be much more easily acquired and possesses a certain transferability.
The pressure on students to perform based on narrow analytical intelligence criteria must be reduced if a true enterprise spirit in education is to be nurtured. As Gardner (1993) points out, such measures of intelligence constitute only one of seven forms (others are linguistic, logical/mathematical, spatial, musical, bodily/kinesthetic, intra-personal and inter-personal). While technical knowledge about say engineering or biology is vitally important to stimulate enterprise, in an education culture this should be placed within a learning context within which the student learns to understand and balance competing interests. Each situation requires a different solution rather than the one ‘right answer’ as is the normal method of assessing student performance. Under the present assessment system students are urged to perform for somebody’s else’s approval which in itself creates the conditions for mediocre performance. Generative learning requires seeing the systems that control events and to grasp the systematic source of problems. Senge (1990) suggests that such learning is what is needed in order to stimulate true creativity rather than relying on adaptive learning which focuses on coping with present events.
Universities possess unparalleled wealth in intellectual power and resources. However, realisation of their true potential would mean a complete transformation in the nature of the education they offer so that most students can share in this wealth. The institutions find it especially difficult to design and deliver appropriate programmes for this new environment since they are driven by a value-system founded on research far removed from the world of undergraduate teaching. The institutional structures are largely based on preserving the autonomy of academic disciplines so that cross-disciplinary innovations are especially difficult to develop. The very nature of universities means that research and undergraduate teaching exist in two different planes as it were, the first a source of pleasure and recognition, and the latter viewed as a burden. The Boyer Commission (1998) in a major study on the education undergraduates receive in US research universities claimed that students are being short-changed and fail to receive a coherent body of knowledge by the time they graduate. They graduate without knowing how to think logically, write clearly or speak coherently. They should be active participants and not passive receivers so that the skills of analysis, evaluation and synthesis become the hallmarks of a good education, just as absorption of knowledge once was. To be fair, most universities recognise the problem but have opted for cosmetic surgery, taking a nip here and a tuck there, when radical reconstruction is called for. The Commission called for a new model of undergraduate education or the creation of a culture of inquirers rather than a culture of receivers so that the university can become a true intellectual eco-system.
The essence of the problem of stimulating enterprise within major research universities is that they rarely have a moral mission and find it especially difficult therefore to build a shared vision. As O’Brien (1998) points out while they do have mission statements these offer nothing specific enough to help form policy directions. The institution needs a mission that drives appointments, tenure, departmental programmes and all the associated extracurricular paraphernalia but this is rarely the case. Moreover, universities must make a sense of stewardship critical to this mission, since only then will the natural impulse of students to learn be unleashed since they will feel themselves engaged in a process worthy of their fullest commitment.
Attempts at enterprise education which emphasize technical or quantitative skills rather than the formation of quality relationships and the long-term creation and sharing of value are seriously flawed. Such programmes underestimate, in particular, the real potential of a society’s rich human and natural capital resources. Refocusing enterprise development to take account of all possible sources of capital, natural, financial, social and technological should be a fundamental goal of the modern university.
To nurture such an enterprise ethic, education programmes should possess characteristics organised around a sense of purpose, excitement and exploration. As Whalley (1993) points out, enterprise education should develop in students:
…..the understanding that the creative engagement with change is helped by having a strong sense of mission or vocation which motivates and gives a sense of excitement; helps to transform the feeling of anxiety which change brings. People who create change and innovation expect to succeed; people who expect the worst tend to be less willing to engage in innovation, do not believe their vision can affect the world.
He argues that the more practice and experience students have of contacting and exploring their inner emotional world the more confidently they can creatively deal with change and be open to new possibilities. Similarly, international scholar Cooley (1993) talks about the need for students to be capable of thinking holistically, working in multidisciplinary groups, coping with change and developing systems and products which are sustainable and caring of nature and humanity. Calling for more social entrepreneurs, he advocates a form of enterprising capacities which far transcend their traditional concerns with narrow, short-term profit maximization. Entrepreneurs required in the 21st century will stretch into community work and care, urban renewal programmes, heritage activities and social and cultural activities in the widest sense. The National Center for Social Entrepreneurs in the US and the School for Social Entrepreneurs in the UK are exciting examples in this regard.
Implementation
We will illustrate how the kind of enterprise education programme described above in conceptual terms could be implemented in practice. If designed properly, the programme would form a seamless framework in order to stimulate an innovative culture. Early on in their studies, students would receive a good grounding in the three forms of capital, namely money, social and natural by undertaking courses such as finance, social studies and environmental issues, respectively. While these would be separate and follow the traditional model at the outset, as they progress through the programme students would learn how to integrate these components in order to appreciate the nature of value and how this is created or destroyed.
In practice, students would concentrate over time on a relatively narrow range of interest areas and work with academic advisors to develop a customized or specialized programme of study, harnessing the knowledge of the academic advisors and their own particular skills and interests. Advisors would propose appropriate projects and assign readings or give short specialised courses on particular techniques that might prove fruitful. Before graduation, students should then be able to demonstrate their ability in their areas of specialisation in order to add value by means of either an entrepreneurial or intrapreneurial venture. In practice, unlike most degree programmes where a large project or thesis is presented upon completion, students might be required as a capstone experience to present a technical, financial and commercial analysis including a comprehensive business plan for a venture defined in the broadest sense. For instance, a student could receive credit for an commercial enterprise involving a community development project in which he/she was engaged. Assessment would be based not just on narrow criteria such as the financial or economic return from this venture but also on its social contribution and environmental sustainability. A demonstrated ability to apply imaginative solutions in order to add value would be the foundation stone of this way of stimulating an enterprise culture.
Clearly, a sea change in perspective within universities would be necessary to assess student performance in this kind of environment. Traditional testing by means of examinations would be the exception rather than the rule in evaluating the standard of learning by students. Evaluation would get away from the present emphasis on testing students’ knowledge of facts and jargon. Instead, wherever possible, putting knowledge to practical use would be the key criterion used for assessment purposes. Moreover, in order to prevent excessive and unhealthy competition among students, promote cooperation and reward endeavor and intellectual ability, a very limited number of award categories would be permitted. Perhaps the categories, with and without a distinction would suffice.
Instead of requiring students to remember facts and information given them by lecturers, programmes would helping them create and share value largely defined by themselves. In other words, the students’ own values and interests, along with those of their fellow-students, lecturing staff, the university itself and even society in general would form the basic dynamic of situations in which different stakeholders must compete, co-operate and trade. It is by being placed in these situations and being required to make decisions rather than passively ‘taking’ courses that would constitute the heart of the learning experience in such a programme.
Understanding how to respond to uncertainty would be helped enormously if the dynamics of the real world were replicated in a classroom setting so students could learn to identify and use management techniques and strategies in an applied setting. Visualisation and interactive multimedia educational technologies would form an important element in this regard. Learning, rather than being an individual experience, would be a team effort, differing substantially from the existing approach in that students acquire knowledge in order to work as a team and achieve group objectives. The traditional roles of instructors as presenters of facts would be altered to that of facilitators and coaches while emphasising that access to information be obtained through the latest in database and internet technology.
A sense of partnership between staff and students would be consolidated by means of a formal ‘contract’ entered into by students and their advisors prior to each term of study. Regular meetings between an individual student or team of students would be held with the academic advisors and relevant mentors to assess progress and provide a support framework. Specialists with relevant experience in a key area of expertise might be invited to attend these meetings so that the structure could provide a continuous knowledge transfer, monitoring, advisory and support framework to help stimulate the venture development process.
This programme should be as responsive as possible to students’ needs without an intervening unwieldy organizational or physical structure. Recent developments in telecommunications and educational technology mean that alternative approaches to the traditional delivery of education are more feasible than ever. Programmes now can easily take place both through a mixture of residency and on-line methods of interaction. This offers enormous potential educational benefits to individuals, educational institutions and communities, irrespective of location.
Conclusion
There is an emotional and spiritual poverty to much of contemporary education and opportunities for either students or teachers to express inner thoughts and feelings, to be truly engaged, are limited. Fostering values like integrity and trust is systematically neglected in the vast majority of third level institutions. Programmes propagate linear or non-holistic thinking, living and working. Service to others, character, a sense of purpose or meaning of life which are increasingly issues of concern to mainstream business are avoided and taboo in mainstream academia. In particular, the three ‘bottom-lines’ described in this chapter must be considered in order to have a rich, dynamic and inclusive enterprise education.
Increasingly, the market-place is intruding into areas once founded on public services or civic virtues. As international financier George Soros (1998) argues, the substitution of transactional markets based on money, as distinct from non-quantifiable relationships based on trust or integrity, will result in the need for individuals equipped with a new range of competencies. It is clear that the most successful companies in years to come will those whose staff balance financial goals of the organisation with those of societal obligations and it is time the education appropriate for them reflect this new reality.
References
Boyer Commission, 1998, Reinventing Undergraduate Education: A Blueprint for America’s Research Universities, State University of New York, Stony Brook.
Coleman, James S., 1990, Foundations of Social Theory, Harvard University Press.
Cooley, Michael, 1993, ‘Skill and Competence for the 21st Century’, IITD 24th National Conference, Galway.
Gardner, Howard, 1993, Frames of Mind: The Theory of Multiple Intelligences, 10th Anniversary Edition, Basic Books.
Hawken, Paul, Amory B. Lovins and L Hunter Lovins, 1999, Natural Capitalism: The Next Industrial Revolution, Earthscan Publications.
Nattrass, Brian and Mary Altomare, 1999, The Natural Step for Business: Wealth, Ecology and the Evolutionary Corporation, New Society Publishers.
O’Brien, George Dennis, 1998, All the Essential Half-Truths about Higher Education, The University of Chicago Press.
Power, Thomas, Michael, 1996, Environmental Protection and Economic Well-Being: The Economic Pursuit of Quality, M.E. Sharpe.
Putnam, Robert D., 1995, ‘Bowling Alone: America’s Declining Social Capital’, Journal of Democracy, pp. 65-78, January.
Seely Brown, John, 1989, ‘Toward a New Epistemology for Learning’, in C. Frasson and J. Gauthiar (eds.), Intelligent Tutoring Systems at the Crossroads of AI and Education, Ablax.
Senge, Peter, 1990, ‘The Leader’s New Work: Building Learning Organizations’, Sloan Management Review, Fall.
Soros, George, 1998, The Crisis of Global Capitalism, Little, Brown and Company.
Stirling, Stephen, 2001, Sustainable Education: Re-visioning Learning and Change, Green Books on behalf of the Schumacher Society.
Walley, Paddy, 1993, Learning the Future — A Brief Guide to the Knowledge Society, Meitheal Mhaigheo, City of Galway VEC.