Universities must become entrepreneurial hubs to help our economy
A third of new businesses will not survive to their third birthday. So they need all the help they can get. They’re now set to receive it from outstanding business schools who – through the Small Business Charter - can demonstrate they are as much for David as they are for Goliath.
"The Beatles teach entrepreneurship better than business schools."
That was the contention of a Business Week leader last week. That might be true in the US but in Britain business schools are about to become the new rock’n’roll.
On Thursday, a ceremony at Downing Street will celebrate outstanding businesses schools that are as much for David as they are for Goliath. The Small Business Charter Award will recognise the 20 pioneering schools developing a national network of support for small businesses.
The Charter was established as a result of last year’s Growing Your Business report from Lord Young, enterprise adviser to the Prime Minister, and has already seen more than 4,500 graduates working with small businesses, led by business schools from Southampton to Strathclyde. These schools have directly supported more than 8,000 small businesses and helped create 800 new student-led companies.
Lord Young’s argument was that business schools are a potentially phenomenal asset but historically have been guilty of underselling their expertise to the business community.
The Charter is a framework created to address that deficit. With more than 130 business schools in the UK, the potential for this scheme to grow into a nationwide infrastructure is significant.
We live in an ideas economy where knowledge has become a precision asset. One of the big issues facing growing businesses is where you get the talent and ideas from. There is entrepreneurial talent waiting to be liberated in higher education institutions up and down the country. By throwing open the doors of business schools, we are starting to realise one of the most important untapped resources for small business.
As hubs of knowledge and expertise, these institutions can also help entrepreneurs to navigate the choppy waters they all experience in the early years of building a business. A third of new businesses will not survive to their third birthday and 90pc will not see out a decade of trading.
To boost our economy, the challenge is not just about encouraging start-ups but enabling scale-ups, offering entrepreneurs the network of advice, support and resources that can help them overcome the barriers to growth.This applies as much to the seasoned business owner as it does the rookie founder. If I’ve learned one thing it’s that no one is too good or too experienced to learn new things about how to grow their firm. I’ve always felt that being a sponge for knowledge, improving yourself day-by-day, is one of the most important mentalities an entrepreneur can have.
There is a self-improvement ethos shared by many of the best in business but in building your own company there is a risk that you stop learning and stop striving to improve yourself as you obsess about improving your business.
The Small Business Charter is exactly the sort of scheme that can give entrepreneurs an adrenaline shot of new ideas, and a fresh perspective on the challenge of building a company.
We have reached a point where business schools can become fellow travellers in the journey towards explosive growth. When two-thirds of the businesses that will make up the S&P 500 in a decade’s time do not yet exist, the opportunity is there for new talent and innovators to seize the day. Business schools can supercharge the knowledge bank and fire the businesses that will be part of that new establishment.
Anything we can do to create the conditions for businesses to deliver growth must be a good thing. Moreover, what we are starting to see is a significant mindshift across the education sector, as professors and principals recognise their pivotal role in reinforcing the entrepreneurial economy. I have sat on the board of the Small Business Charter since its early days and seen an evolution in the journey and a growing realisation among business schools of how much more they can achieve in partnership with business.
This newly opened door swings both ways. As well as getting entrepreneurs into business schools, the opportunity is to hardwire a start-up culture into our higher education system.
When I visit clients in California, one of the things that always impresses me is that at universities such as Stanford, starting a business is the norm and not the exception. It’s an essential part of how they prepare the next generation to take on the world.
In the UK, that needs to become the new normal: universities and business schools as entrepreneurial hubs in their own right, as well as essential sources of know-how and expertise. The Small Business Charter is an important step towards that goal and what begins on Thursday can play a major part in inspiring the business success stories of the future.
This article was first published by Michael Hayman, co-founder of communications agency at Seven Hills, in The Daily Telegraph 5th June 2014