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Entrepreneurship has to start in school

The recent Global Innovation Index, which shows Singapore sliding from third to eighth place, has put the spotlight on innovation and creativity in the country. There are two parts to innovation: Generating an idea or invention, and converting that into a useful application or innovation that is used by others.

The recent Global Innovation Index, which shows Singapore sliding from third to eighth place, has put the spotlight on innovation and creativity in the country. There are two parts to innovation: Generating an idea or invention, and converting that into a useful application or innovation that is used by others.

As such, Singapore’s education system should not only focus on the cultivation of creativity, but also on the building of an entrepreneurial mindset among students.

Based on interviews with university students here, we can classify them into three groups. For the first group, starting a company has not crossed their minds; their aspirations consist only of climbing the corporate career ladder. Most students will fall under this group.

The second group have thoughts of starting a company at some point, but are aware of the risks of failing and the opportunity costs. They are willing to start a firm only if they are sure of success or as a sideline to a well-paying, full-time job.

The third group of students, a small handful, have tried (and most of the time, failed) to start a small venture, be it launching a smartphone app or running a blogshop. These students are well engaged in the entrepreneurship community in Singapore, connected to potential mentors and even venture capitalists who may be future investors.

What Singapore needs to do is to move more students from the first to the second group and from the second to the third group.

CELEBRATING FAILURE

One thing that needs to be done is to foster the mindset that it is good to experience the failure of an entrepreneurial venture. Interviews with student entrepreneurs from the United States show a mindset completely different from that of their Singaporean counterparts.

Many see starting a company as an opportunity to learn its different aspects — from marketing to product development, fund-raising, strategy development, even accounting and tax filing — ultimately, providing a good overview of what it takes for a firm to survive and operate.

More importantly, the American student entrepreneurs believe a start-up failure helps their career instead of holding it back. One student entrepreneur notes: “One of the things that mitigates the risk is that if you define what you’re supposed to be doing, and you execute that as well as you can, people are willing to celebrate your failures broadly if the company fails ... if it’s clear that you worked hard and that you were competent along the way.”

While employers would certainly value an entrepreneurial spirit, students need to demonstrate their competence in developing and refining a business idea, and deciding if it is worth taking the risk.

MAKE USE OF VARSITY SCHEMES

Our research on student entrepreneurs from American universities reveals that the most successful are those who take advantage of the broad range of programmes that facilitate the creation of new businesses at universities: Mentoring programmes, business plan competitions, accelerator programmes, entrepreneurship training and project-based classes that bring together interdisciplinary or MBA student teams to work on business plans and create roadmaps for commercialisation.

Successful students tap any resource available to them to develop their ideas. The opportunity to work as a student team, rather than as an incorporated firm, is valuable in two significant ways. First, the team can explore how well they work together and a natural attrition process takes place where the less committed will drop out.

Second, during the incubation process, the team gets to draw on mentoring resources and networks offered by the university; they can explore market feasibility of their idea, which in turn provides useful information for the technology development process.

The opportunity costs are also lower for students, in the initial stages of setting up — they don’t have to give up a full-time job, for instance. One to two years of quasi-incubation in university would supply the founding team with enough information to determine, by the time they graduate, whether it is worth investing the next few years and resources in the start-up.

In Singapore, the universities and polytechnics offer a range of programmes to encourage entrepreneurship among students, but only a small handful avail themselves of these. To encourage innovation and entrepreneurship, we should educate not only business school students, but students of all disciplines, on the right way to go about developing their business ideas.

We should also not wait till university to start this education process. Many more students at pre-university and secondary levels should be exposed to some of these concepts of entrepreneurship. Mentorship projects between tertiary institutes and secondary and primary schools can also be initiated.

Once competence in the entrepreneurship process can be demonstrated, perhaps employers, parents and students would have a different view of entrepreneurship and the costs of failure.

ABOUT THE AUTHOR:

Boh Wai Fong is an associate professor of information systems at Nanyang Business School, where she specialises in the areas of knowledge management and innovation management.

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