Successful entrepreneurship, higher education and society: from business practice to academia

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Successful entrepreneurship, higher education and society: from business practice to academia

The entrepreneur: concept and role

This subsection summarizes some ideas about the notion of entrepreneur to provide a framing for the rest of the paper.Footnote 7 The explicit discussion of the role of the entrepreneur within the economic literature may be traced back to Cantillon (1755) and his Essai sur la nature du commerce (Hoselitz, 1951).Footnote 8

Cantillon understood the entrepreneur as a central element in the midst of the activity of markets (Brown and Thornton, 2013). Cantillon defined the entrepreneur as someone who operated with goods and services in pursuit of profit in an uncertain environment (Thornton, 2020). This interpretation of the term entrepreneur evolved over time; gradually entrepreneurship became associated to a disruptive innovation whereby a new idea, product, or process replaced an existing one while planting the seed for the next idea, product, or process, paving the way for the Schumpeterian creative destruction (Jonsson, 2017). From this perspective, some authors dynamically reformulated Cantillon’s insights on entrepreneurship and related entrepreneurial undertakings to three business processes: envisioning and valuing opportunities, allocating and assigning resources, and legitimizing novelty (Wadhwani and Lubinski, 2017). Entrepreneurship within economic literature, therefore, became linked to terms such as innovation, idea, product, opportunity, or risk, which were identified as indicators of success by scholars through different times and contexts.

A century later, Alfred Marshall regarded entrepreneurship as the fourth production factor, which organized and coordinated the other three classical factors (labor, capital and land) enhancing their efficiency (Marshall, 1949). According to Marshall, the entrepreneur had to make important decisions concerning the allocation of resources in order to increase productivity, decrease costs, and raise profits; this insight was later on developed by Williams Middleton et al. (2020) within the framework of the transaction cost theory of the firm. Marshall, however, did not emphasized enough the importance of the subjective elements of entrepreneurship, according to Austrian economists; examples of these elements are the idea of what business to pursue and how to pursue it, and the expectations about markets, competitors, and prices (Witt, 1999). Moreover, the relationship between entrepreneurship and firm is not straightforward within the Marshallian paradigm.

Another important contributor to the notion of entrepreneur was Frank Knight. Knight (1921) highlighted the important role of the entrepreneur in connection to uncertainty; he extended the idea proposed by Cantillon and stressed how the entrepreneur innovated, adapted to changes in the environment, and handled uncertainty, acting as an insurer for the rest of stakeholders. Moreover, it is generally considered that Knight (1921) pioneered a new avenue for research exploring the personal traits that made entrepreneurs successful.

Subsequent contributions (some of them within the Austrian tradition) revisited these ideas and discussed how entrepreneurs´ traits might influence entrepreneurship, both inside and outside the firm.Footnote 9 A result of this orientation was the emerging notion of subjective entrepreneurship, which introduced behavioral, psychological, and social considerations and explored the set of characteristics that an entrepreneur should display in order to succeed (Marshall and Ojiako, 2015; Bula, 2012).

This strand of literature took off in the mid-20th century but showed signs of decay in the 1980s. Research on subjective and social entrepreneurship flourished again at the beginning of the 21st century, partly because of the increasing availability of surveys providing abundant empirical data on this issue and also because of the growing interest in start-ups, business culture, and new business models (Cassis and Minoglou, 2005).

Recent contributions within this literature analyze empirical evidence to understand what drives an entrepreneur and what are the personal traits associated with successful company launchings. Examples of these characteristics are the need for achievement, proactivity, innovativeness, tolerance to uncertainty and self-efficacy, openness, conscientiousness, innovativeness (Kerr et al. 2018). Other authors support an interdisciplinary approach to the idea of entrepreneurship, capable of integrating economic, behavioral, and social elements (Ripsas, 1998).Footnote 10

After summarizing the historical evolution of the notion of entrepreneurship, the next subsection explores this idea within the context of higher education.

Higher education, entrepreneurship, and society

Entrepreneurship Education comprises those educational interventions that prepare students for a career in entrepreneurship (Rauch and Hulsink, 2015). These interventions are oriented towards two main directions: first, they foster a positive attitude towards entrepreneurship which stimulates the intention of students to become an entrepreneur (Ripollés and Blesa, 2023); second, they endow students with knowledge and skills that are relevant to successfully launch and manage a business (Nguyen and Nguyen, 2024).

There is abundant empirical evidence suggesting a positive impact of EE on entrepreneurial intentions and behaviors. Goyanes and Serra (2016) suggest that entrepreneurship programs affect the intention to become entrepreneurs in a sample of Spanish students by promoting a positive perception of entrepreneurship. Other contributions provide similar conclusions employing samples from different countries (Sampedro et al. 2014; Amofah et al. 2020; Margaça et al. 2021). According to Guerrero et al. (2018), EE promotes work effort tolerance and reduces risk aversion in students. EE also helps detect business opportunities (Bueckmann-Diegoli et al. 2021). Urbano et al. (2017) find that entrepreneurial education has a larger influence on the students’ decisions to become entrepreneurs than other informal factors (role models, social image, or fear of failure). Obviously, the role of entrepreneurship education in fostering students’ entrepreneurial intention in students is limited, since there may be other factors at play (Camacho-Miñano and del Campo, 2017).

Entrepreneurial training helps develop appropriate skills (Maravé-Vivas et al. 2021), such as creative thinking oriented to the generation of business value (Arruti, Morales and Benitez, 2021). Sound planification and anticipation can also be taught through the preparation of business plans (Ferreras-Garcia et al. 2019; Ferreras-Garcia et al. 2021). As discussed above, the literature suggests that entrepreneurial competencies encompass not only knowledge and skills, but also personality traits that help launch and consolidate a project successfully (Arruti and Paños-Castro, 2020).

The emphasis in sustainability is directing the attention of universities towards the social impact of entrepreneurship (Huertas González-Serrano et al. 2020), whereby not only the economic outcomes of a project but also its non-economic consequences are considered (Yépez-Mora et al. 2019). The implication for EE is straightforward: universities should promote the development of social skills among business students (Pérez-Fernández et al. 2020), stressing the potential of new firms for job creation (Jiménez et al. 2015) and for the dynamization of the local economy (Butkouskaya et al. 2020).

Universities have acquired protagonism not only as educators in entrepreneurship but also as agents promoting entrepreneurship. In the last decades, many universities have gone one step further in the consolidation of a more practical approach to entrepreneurship. Institutions in different countries have promoted business incubators, spin offs and alliances with companies. Others have evolved to become entrepreneurial universities, understood as entities actively engaged with innovation and diffusion of knowledge spillovers that contribute to regional development (Etzkowitz et al. 2000; Guerrero and Urbano, 2012). In this context, universities promote synergies between managers, academics, and students, seeking opportunities with common strategic objectives, and favoring the accumulation of human capital (Klofsten et al. 2019).

These approaches have often been successful, generating a positive impact on students and the local environment. Infrastructures provided by the entrepreneurial university (incubators, spin-offs, and others) enable exposure to risk of students and promote their autonomy, thus preparing them for entrepreneurship (Guerrero et al. 2020). Spin-off organizations or innovative start-ups show in practical ways how to produce knowledge with practical, marketeable applications (Tejero et al. 2019). Entrepreneurship incubators have been shown to generate profitable and sustainable jobs over time (Del Campo Villares et al. 2020) and to generate a positive impact on the environment. Entrepreneurial training has contributed significantly to the creation of companies (García et al. 2017) and to the regional development of nearby areas (Guerrero et al. 2015). Valera-Loza et al. (2021) suggest that the greater the relationship between research, entrepreneurial curriculum and entrepreneurial culture, the greater the impact in the form of business results. The literature documents as well a direct and positive relationship between entrepreneurship training and its application to business projects (Aceituno-Aceituno et al. 2018).

In addition, alliances between universities and other agents in the entrepreneurial ecosystem can help overcome infrastructure shortcomings of higher education institutions (Ten Caten et al. 2019). In any event, entrepreneurial universities must find the right balance between teaching, research, and entrepreneurship (Paños-Castro et al. 2021).

These considerations highlight the importance of universities for entrepreneurship education. Furthermore, they suggest that many higher education institutions have actively and effectively become involved in entrepreneurship through the channel of entrepreneurial universities.

Business practice, academia, and factors for successful entrepreneurship

Education for entrepreneurship must enable potential entrepreneurs pursue their projects as successfully as possible (Bauman and Lucy, 2021). Firm success, however, is a nuanced, complex, and multifaceted concept. Company success has been traditionally measured by aspects and variables like turnover, profit, productivity, value creation, and other related economic or financial indicators (Josefy et al. 2017). In the case of start-ups or projects in the early stages, success has been associated with survival.Footnote 11 It can also be understood in a more holistic and encompassing view which intertwines economic, psychological, and sociological features (Giannantonio and Hurley-Hanson, 2016).

Along these lines, in recent decades success in entrepreneurship has been explored in the context of venture investments, business angels, and seed capital, and hence closely associated with company valuation. Traditional firm valuation tools based upon the discount of future cash flows are difficult to apply in practice to start-ups; these companies have features like novelty, disruptive business models, high risks, and lack of comparable benchmarks which complicate valuation. In many new business models turnover and profits are difficult to forecast; their evolution may be nonlinear while some landmarks may critically determine success or failure. Typical finance sources, such as fintech, crowdfunding, and venture capital, are relatively new as well.

The most appropriate methodologies for valuation may also be different according to the various stages of the company over the life cycle. In the early stages, qualitative methods may seem more informative while, as the new firm consolidates, quantitative tools become more convenient (Escartín et al. 2020).

In this setting, some new tools, complementary to traditional methods, have been developed and progressively adopted. They assess aspects closely related to the expertise of founders and the strategic viability of the project (see Escartín et al. 2020 for a summary). Two of these tools stand out because of their popularity and usefulness: the Berkus model (Berkus, 2016) and the Scorecard Valuation Method (Payne, 2011), now widely used by business angels and funds.Footnote 12 Their approaches incorporate qualitative aspects which are key for the success of young companies and allow a thorough understanding of their specific business models.

Berkus (2016) associated success aspects in entrepreneurship with the capacity to overcome several key risks faced by a project in its inception (product, technological, execution, financial, market). He defined the following success factors: sound idea or business model, prototype, founder team or quality management team, strategic relationships, and product rollout or sales (Berkus, 2016). It has proved to be a useful tool to assess new firms before they generate revenues (Amis et al. 2001). Payne (2011) proposed the Scorecard Valuation Method, which attaches a weight (contingent on the industry) to the following parameters: team, market size, product, and competitive environment.Footnote 13 Gross (2015) stressed another crucial factor, timing, understood as the coincidence over time of demand and supply. Combining the approaches from Berkus (2016), Gross (2015), and Payne (2011) produces a first set of seven success factors: idea, CEO/decision marking procedure, business model, finance, team, marketing, and timing.

The subsequent literature on firm success has added other nine relevant factors: evaluation culture, culture and values, internal satisfaction, adaptation to environment, formation, diversity, advisors, lean management, and founders’ experience (Díaz-Santamaría and Bulchand-Gidumal, 2021; Sevilla-Bernardo et al. 2022).

As discussed above, there is an additional factor acquiring increasing relevance: social impact (Huertas González-Serrano et al. 2020). This variable captures how a firm affects its economic, social, and environmental surroundings when striving to answer to the challenges and demands of society (Yépez-Mora et al. 2019). Social impact is related to successful entrepreneurship because it affects the motivation, commitment, and engagement with the firm of managers, employees, and other stakeholders, influencing turn-key parameters like turnover, productivity, and profits (Pérez López, 1998). For example, prospective customers may be more inclined to consume goods produced by less pollutant technologies and environmentally conscious companies.

We are endowed at this point, therefore, with a set of 17 factors that practitioners, investors, and related literature have identified as important for firm success. These factors constitute the backbone of our analysis. We want to ascertain to what extent these 17 factors are also emphasized and prioritized by entrepreneurial education at universities, both in terms of teaching and research.

As discussed above, the literature has so far explored many issues related to entrepreneurship and entrepreneurship education and has enabled a more thorough understanding of these elements. The links among universities, firms and governments have also been analyzed, showing novel patterns of divisions of labor and interactions among agents. Effective Interactions and spillovers, however, may not be uniform nor occur at the same pace across disciplines (Etzkowitz et al. 2000) and should be explored on a case-by-case approach.

To the better of our knowledge, the degree of absorption by universities of the framework of analysis of success employed by practitioners is still under-researched. To get a better understanding of this issue provides the motivation for this paper, which articulates the investigation through three main questions:

Q1: How does the university teaching-learning process prioritize the success factors identified by business practitioners?

Q2: Which relative importance does research at university attach to the success factors identified by business practitioners?

Q3: Is there a convergence between the relative importance associated to success factors in teaching-learning and research?

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