An academic recently extolled the virtues of his university entrepreneurship course. Students loved the different teaching style and the focus on creativity and innovation.
I asked how many students had launched high-growth ventures because of the course. "Hardly any, but that's not the point," he replied. "You can't measure the success of entrepreneurship degrees by the number of start-ups produced."
He argued that universities, by helping students evaluate and avoid bad opportunities, are doing their job, even though it does not show up in start-up formation rates across campus. Other students who took his course used it to help an established business.
Moreover, viewing entrepreneurship only through a start-up lens is too narrow. Some argue entrepreneurship is a mindset rather than a business skill set. Under this approach, entrepreneurship courses do much more than help students launch ventures; they encourage a type of thinking that assists all careers across industry.
Having taught and studied at university, I also favour the entrepreneurship mindset approach. This column has long argued that entrepreneurship courses should be embedded in every university degree and not only taught through business schools, which are too often treated as cash cows by universities to fund research in other disciplines.
But those arguments do not excuse universities from measuring and ranking start-up formation on campus, comparing it with global universities, and reporting on start-up outcomes and value creation.
Many universities have launched undergraduate entrepreneurship degrees and/or included specialisations in postgraduate degrees in the past decade. Some have launched high-quality master's degrees in entrepreneurship and student numbers are growing quickly.
What is the return on those courses for the university, students and the community in terms of new venture creation and growth?
Equally, what is the return on the hundreds of millions of dollars being spent, much of it taxpayer funded, on shiny new innovation and discovery precincts at universities that are designed to boost collaboration with industry and create spin-off ventures?
Amid the rush to invest in research-translation facilities (places that bring unis and industry together), there appears to be few consistent ways to measure their success, at least in start-up venture formation, understanding the return on investment and reporting the results.
The public should ask: will these new facilities deliver a strong, sustainable return for the stakeholders or will they become innovation white elephants – another patch on a university sector that is not turning enough discoveries into new ventures, partly because it has the wrong incentives and thinking in this area?
Granted, it is too soon to tell if the new innovation centres are working. It has taken great research centres, such as Bio21 Institute at the University of Melbourne, up to a decade to foster high-value start-ups. For example, the biotechnology success story, Fibrotech Therapeutics.
You can't measure the success of entrepreneurship degrees by the number of start-ups produced.
Also, start-up formation is only one metric to judge innovation centres. As important is the quality and quantity of papers in academic journals, the centre's share of research funding, the application of research in clinical settings, industry collaboration and community impact. The importance of basic research should never be overlooked.
Nobody expects these university centres – or entrepreneurship courses for that matter – to develop large numbers of high-growth start-ups. The best ones are rare. But nor should the public tolerate universities that hardly ever develop start-ups on campus or can only point to ones formed years ago, when they are investing so heavily in this area.
Imagine if all Australian universities recorded and published start-up activity on campus or through their related research centres and tracked the value created in these ventures over long periods – an annual scorecard of university-led entrepreneurship, so to speak.
We would soon know which universities are turning discoveries into high-growth ventures that create huge commercial or social value, and which entrepreneurship courses are developing students who launch and grow ventures.
The methodology for such a list would need plenty of thought and qualification, but would add great value over time by illuminating start-up activity, or lack of it, through our universities. I suspect some universities have a good story to tell here, if only they raised the profile of their start-up community on campus.
It is pointless talking up entrepreneurship at universities if we do not include a comparable, accessible measure of start-up activity. We need less hype about innovation and greater focus on quantifiable commercialisation results.
Yes, measuring and comparing start-up activity across universities is only part of the innovation/commercialisation puzzle. But there's too much at stake to rely on anecdotes and occasional press releases about start-ups that form through universities and entrepreneurship courses.
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