No university exists in a vacuum. I am ever-mindful of the world around PhilaU and, perhaps more importantly, the world into which our students graduate. In the midst of challenging economies, stalled job markets, and worries in the Eurozone, it is an uncertain world, certainly. But it is also a world to which universities have much to offer. Over the week of March 10 to 16, I traveled to Ireland to meet with educators, entrepreneurs and investors. What follows is a brief essay I supplied to Business First Northern Ireland.
The world our graduates inhabit is an increasingly global one. I believe PhilaU students have the creative, professional and innovative tools to contribute to it in meaningful ways.
Eight years ago I began a relationship with Ireland. I chose my words carefully because what started as an interesting assignment has turned into a passionate belief in what Ireland can accomplish. In 2004, I was vice provost for entrepreneurship and global management at Babson College. We were ranked the best entrepreneurship curriculum in the U.S. We aspired to be the best in the world. Therefore we approached universities around the world to build teaching, research and outreach alliances. That is when I met Mark Durkin and Pauric McGowan at the University of Ulster. They are kindred spirits in the belief that entrepreneurial behavior and outcomes are the cornerstone of a free and growing culture.
This week marked the latest in a number of visits to Ireland, and on several occasions I also have hosted my UU colleagues in the U.S. Now, as the President of Philadelphia University, I am engaged in a type of educational entrepreneurship. I actively invest in start-ups and serve as a director of a number of commercial and not-for-profit organizations. My professional titles include university president, member of the board of directors, writer, professor, stockholder and advisor. But my role is always as entrepreneur.
True to form, my colleagues and friends at UU organized a diverse and busy schedule this week. I spoke to an MBA class, as a respondent to Dr. Durkin’s inaugural professorial lecture, to community service and government groups, nascent entrepreneurs, small-to-medium enterprise owners and faculty members.
In interviews with the BBC and the Federation of Small Businesses I suggested that now, more than ever, is a time for entrepreneurship. The recession has dragged on. Business failure, downsizing, and mergers and acquisitions have winnowed the competition. Surviving businesses have made severe cuts in expenses and are narrow to the bone. But even in the midst of great uncertainty, there is light. The U.S. is showing signs of economic upturn and banking health. Housing prices are stabilizing. Efficient, newly trimmed business models are better prepared for scale. The labor market is hungry to participate and eager to be productive. Governments are making difficult choices that may provide a more stable macro-economic platform. Importantly, businesses have amassed large stockpiles of cash reserves to defend against harsh times. That cash must eventually be put to use or suffer from a lack of return. The reporter who interviewed me at the FSB quoted a CEO as saying, “Cash that doesn’t provide return is nothing more than expense.”
Businesses that are started today have the advantage of the lowest cost structures in a decade. If I am correct, they may also benefit from a positive economic trend. But I am not totally naïve. Tough times make start-ups very risky. How can Ireland maximize this unique time to promulgate more start-ups and faster small-to-medium enterprise growth
A unique aspect of my growing relationship with Irish entrepreneurship is a healthy relationship among entrepreneurs, universities and the government. The lines of communication are many and often used. There is a rock-solid belief in entrepreneurship as an important ingredient of the community’s economic health. There is a growing belief that outcomes are at least as important (if not more so) as process. There are the makings of an entrepreneurship eco-system, but still I think there may be some important missing components.
First, the government is seen by many to be the first avenue for capitalization of the small business. Many entrepreneurs in the U.S. seek government funding, but few rely on the government as the “go, no-go” arbiter of start-up feasibility. The classic capital food chain in Ireland needs to be fostered. Friends and family provide a vast majority of early money to entrepreneurs around the world. “Angel” investors are the next significant source, followed by banks, venture capital and public market money. Large companies play a significant role throughout the start-up funding process. Many of the entrepreneurs I spoke with in Ireland mention government first and banks second. Public policy should support and encourage capital formation, but Ireland must get beyond a culture of “grant-preneurship” to foster the kind of sustainable entrepreneurship eco-system it is capable of. Second, the eco-system seems to be linear and hierarchical. Quasi-governmental community organizations counseling, universities providing knowledge support and governments making grants align in almost a rote pattern. Again, I see a wonderful capacity for communications and support. Customers, vendors, investors and others are adjunct instead of intimate in this process. A more robust entrepreneurship eco-system might embrace the variety of players early in the process, creating multiple roles for actors in the system: angel investors become advisors, suppliers become investors and universities provide a variety of human capital.
I have found that the linear model inhibits the kind of nimble adjustments necessary in new venture creation and growth. Eco-systems allow the entrepreneur to move among the stakeholder groups, drawing on the expertise required in a just-in-time world.