Last modified: Wednesday, May 24, 2006
New study finds nation's entrepreneurial centers growing in respectability, stature
FOR IMMEDIATE RELEASE
May 24, 2006
BLOOMINGTON, Ind. -- Entrepreneurship programs at universities and elsewhere have been -- excuse the expression -- entrepreneurial over the last 15-20 years.
During the early 1980s, more than 300 universities reported courses in entrepreneurship and small business. Within a decade, that number had grown to 1,050 schools. Today, entrepreneurial education includes more than 2,200 courses at more than 1,600 schools, 277 endowed faculty positions, 44 refereed academic journals and nearly 150 research centers.
Donald F. Kuratko, executive director of the Johnson Center for Entrepreneurship and Innovation and the Jack M. Gill Chair of Entrepreneurship at Indiana University's Kelley School of Business, saw a need for a benchmark study of the discipline, particularly given its role in supporting states and businesses with economic development.
Kuratko and colleagues Todd Finkle of the University of Akron and Michael Goldsby of Ball State University analyzed in depth 146 entrepreneurship centers in the United States and the differences between top-ranked and unranked centers as measured by U.S. News & World Report. The study is the largest of its kind and appears in the current issue of the Journal of Small Business Management.
"It has been a long time since anybody even decided to look at these centers," said Kuratko, who also co-founded and directs the 150-member National Consortium of Entrepreneurship Centers. "We knew that with the proliferation of centers this was the time to go back and look at this.
"We showed the difference between the top-ranked centers and the non-ranked centers, not that we were putting any school or center down, but we were trying to figure out what some of the differences were," Kuratko added. "We were able to demonstrate in so many different categories what gives a business person an idea about what really makes a center stronger."
The researchers received responses from 94 entrepreneurship program directors, or a response rate of 64 percent. Not included in the study were governmental organizations such as Small Business Development Centers.
Their findings included:
• The average age of all entrepreneurship centers was 8.3 years. There was a significant difference between top-ranked centers, which were 11.9 years old, and unranked centers, which were 7.7 years old. Nearly three-quarters of all centers said their primary focus was academic programs. Sixty-one percent were based at public universities.
"Our study validated the fact that a center is very powerful if it is tied back to an academic program," Kuratko said. "The reason for that, which makes sense, is that the power of a university is its knowledge base, its knowledge core, which is its faculty and the research that's conducted. Entrepreneurship is no different.
"Schools just starting centers need to realize that it can't be a stand-alone center," he said. "That might be nice as a community development tool, but that's not going to be a powerful educational tool, because it's not tied back to any academic structure."
• The average center had 5.4 teaching faculty, many of whom also had experience in starting or operating businesses. The mean number of full-time faculty at ranked centers who had started their own business was 2.4, and 2.2 at unranked centers. Ranked centers were more likely to have adjunct faculty who had been entrepreneurs, 2.9, versus 1.2 at non-ranked centers.
"That has become a very important point. This is a discipline certainly driven by two components. One is the research component. The other is the experiential component," Kuratko said. "What we're seeing more of in this discipline are faculty who have started businesses or who have been involved in smaller or emerging businesses, and they bring that experience back to the classroom. They have a far greater perspective to give students, and I think that's very powerful. It's the needed balance between research and experience."
• While entrepreneurship often is associated with younger people, the average age of center directors was 51.7 years old. The average director tended to be male (82 percent), have a doctoral degree (70 percent) and be a former entrepreneur (76 percent). They had previously started 1.9 businesses and had an average of 9.9 years as entrepreneurs.
"It's not to say that we don't have younger people getting into the entrepreneurship field, but when they actually rise to the level of being director of a center, generally it takes some experience to get to that level," Kuratko explained.
That experience includes career moves through academia to full professorships, which often is required for center directors to gain full respect and support from faculty colleagues at universities, he added.
In the paper, the authors underscored this point: "Despite the enormous growth within the field, entrepreneurship still lacks legitimacy within other disciplines in academia."
• A center's endowment proved to be crucial to its reputation and success. Ranked centers on average had $10,409,500 more endowment money than unranked centers. Nearly 50 percent of the centers in the study sample had an endowment of less than $500,000. Ranked centers had more scholarship money available for students, $38,000 versus $22,708 for unranked centers. No scholarships were available at 17 centers.
"It's not surprising at this stage of the game," Kuratko said. "Entrepreneurship is about 25 years old as a discipline. That's relatively young, and centers are even younger. It's not surprising to find that some schools were able to garner major gifts, in terms of millions of dollars for endowments, and other schools have had to bootstrap it and try to start it on much smaller gifts.
"I have nothing against bootstrapping to get a center going -- I've done that myself -- but once you begin to get credibility and you begin to build that center, your endowment, your funding is absolutely critical, because it links back to your scholarship abilities, your internship ability, monies to help with faculty research. All of that begins to tie into whether you have a really powerful program."
• While nearly all entrepreneurship centers engaged in external efforts that assist business people and communities, the study found that most centers associated with larger universities are being more internally focused. They are looking for opportunities to provide students with experience by assisting researchers elsewhere at their universities and colleges, such as at medical and engineering schools.
The National Consortium of Entrepreneurship Centers, which endorsed the study, has its administrative home in the Kelley School of Business. It will hold its annual conference Oct. 13-14 in Cincinnati. Its home page is at https://www.nationalconsortium.org/.