Low Number of Entrepreneurs from Business Schools? Increase Perceived Capability & Address Fear of Failure

Over the past five years, the MBA curriculum in Business Schools has been customized to include Entrepreneurship as a specialization and in some cases an integral part of the learning process. But if you have read the latest MBA Employment trends, in top Entrepreneurial Business Schools like Stanford (13%) and MIT (8.2%), only a small section of the class actively pursued Entrepreneurship after MBA.

Business Schools cannot be entirely blamed. International students represent 35% of US MBA Class and over 65% of European Business School MBA programs. According to The Global Entrepreneurship Monitor (GEM) 2012 Global Report, the cultural influence of student’s home country had a greater impact on their pursuit of Entrepreneurial opportunities.

GEM evaluated several factors that were predictors of Entrepreneurship in an Economy, out of which four were primary influencers: Perceived Opportunities, Perceived Capabilities, Fear of Failure, and Entrepreneurship as a good career choice

MBA Program and Entrepreneurship

F1GMAT had published the two opposing points of view with articles: Entrepreneurship - 5 Reasons Why MBA is not necessary & Why MBA would be helpful to become an entrepreneur. However, the GEM Global report, and data collected from around the world shows one thing. There is a high correlation between perceived opportunities and perceived capabilities.
 

 

Participants from Economies that showed high-perceived opportunities also had high perception about their capabilities in Entrepreneurship. Entrepreneurial courses in MBA program should focus on hands-on learning experiences that include opportunity recognition, value creation, finding funds and creating a feasible implementation plan. Business Schools can instill confidence in students about their abilities to pursue opportunity with the right curriculum. The best schools now provide infrastructure, intellectual capital, and seed funding to launch Businesses in Campus.


 
As you can see above, the correlation between Entrepreneurship as a good career choice and perceived capability to start own Business is high. In spite of excellent support and seed funding, the number of MBA students pursuing Entrepreneurship is low. The only reason for this is: Fear of Failure



What is interesting about the above result is that participants from Latin America, Middle East, Africa, and China did not cite fear as a deterrent for pursuing Entrepreneurship but most participants from developed economies cited it as a major factor. Italy (58%) and Japan (53%) demonstrated the highest fear of failure rates. Among developed countries, a large section of participants from Netherlands (79%) affirmed Entrepreneurship as a good career choice.

Solutions

1) Business Schools that encourage Entrepreneurship cannot adopt a uniform training program for all MBA participants. They have to address the need of the students based on their background and personal aspirations.

2) Developing leadership modules that address fear of failure should be a required course in MBA programs. This would not only be helpful for Entrepreneurial students but would also encourage other students to pursue innovation and change.

Reference

GEM 2012 Global Report