How to produce real entrepreneurs

Every year, one million youngsters graduate from college or turn 15, and therefore compete for jobs in the workplace. Despite the much-vaunted GDP increase hovering around 6 percent per annum during the last five years, industry’s absorptive capacity for new workplace entrants is at a dismal 17 percent. It’s not unusual to meet unemployed graduates after over a year.

Perhaps, we shouldn’t just train and program our youth to seek employment after schooling. Entrepreneurship is a very lucrative alternative to employment. Despite tens of thousands of graduates from entrepreneurship courses every year, it seems the schools don’t really churn out real entrepreneurs.

Academic challenge

I often get invited to career talks all over the country. I’ve talked to a number of Entrepreneurship students and found that at best many have chosen to enroll in the course for “intellectual diversion” and not because they want to start their own business after graduation. Listen to what some students say.

“This sounds like an easier course than engineering.” “How can I start my business? My parents could hardly send me to school. Where will I get the capital for my business?” “I will first get employed, learn the trade secrets, and perhaps go into business after retirement.”

I have also met Entrepreneurship professors and instructors. Some have a DBA degree – Doctor of Business Administration – but had no experience at all in running a business. But many are very knowledgeable about the theories in business and entrepreneurship and can teach well.

Not knowledge-based

The problem perhaps is that entrepreneurship should be less knowledge-based, but more action- and experience- oriented. A summa cum laude in Entrepreneurship will never be a great entrepreneur until he starts and runs his own business.

You can teach students, step by step, how to make their first million, and ask them to write and defend a thesis on their business proposal. I bet that the thesis will be a product of several pages of “copy … paste” from a few Google sites.

Read my lips. It takes more than knowledge to become a great entrepreneur. Many things that you need to succeed in business are not taught in school — courage, confidence, character, conviction, foresight, political will, patience, perseverance, resiliency, nurturing attitude, heart, spirit, never-say-die attitude, etc.

Failure tolerance

In school, if you fail the course you cannot graduate and would probably be discouraged from becoming a real entrepreneur. In the Philippines, people go to school to become what they want to be – a lawyer, doctor, agriculturist, or engineer – and pass board exams. Schools don’t honor failures.

If I will realistically teach Entrepreneurship in school, I would probably fail half the class. In the real world, more than half the businesses fail before the fifth year of gestation. Many, if not most, entrepreneurs have failed businesses tucked under their belt early in their careers. That’s why entrepreneurs must start at an early age, experience failure, and eventually succeed later in life.

Bill Gates and Paul Allen had a failed business in 1970s, before Microsoft. When God closed the doors on Gates’ Traf-O-Data, he opened Windows. He hehe!

Sam Walton failed in his first business – a Ben Franklin franchise store in Newport, Arkansas. Great entrepreneurs like Gates and Walton don’t give up. However, “persistence” and “not giving up” are not learned in school.

Schools don’t tolerate failures. Students cannot accept failure. But, the best entrepreneurs are those who have mastered the art of rising every time they fall.

Apprenticeship

So how do you teach and develop entrepreneurs?

Perhaps, this is an oversimplification. But I think, the answer could be apprenticeship. Teach students real entrepreneurship by making them apprentices. While in school, send them out to the real world, for more than half the time for learning. Give them loans to start their own business, using real money. Make the students deal with real customers, vendors, suppliers, and financiers. Make them solve real business problems and let them look for real opportunities. If they succeed, they earn the money. If they lose, they’ll pay for failing. But they will learn. In a few years, they’ll become the youngest but experienced entrepreneurs. Less theories,more real world experiences.

If government and the academe are serious, they should partner in this undertaking. Producing future entrepreneurs will augur well for the Philippine economy, create more jobs and reduce poverty incidence.

(Ernie is the 2013 Executive Director and 1999 President of the People Management Association of the Philippines (PMAP); Chair of the AMCHAM Human Capital Committee; and Co-Chair of ECOP’s TWG on Labor and Social Policy Issues. He also chairs the Accreditation Council for the PMAP Society of Fellows in People Management. He is President and CEO of EC Business Solutions and Career Center. Contact him at [email protected])