Teaching of Entrepreneurship, Practices and Possibilities: A

University of Zululand Case Study

By

Irrshad Kaseeram

University of Zululand

Objectives of the Presentation • Entrepreneurship is both a science an art –

How do we teach it?

• What can tertiary institutions do to encourage students to take calculated risks?

• How can we offer entrepreneurship programmes to more people?

• How can we ensure the commercialisation of innovations has the biggest impact?

Macroeconomic Background

Global Entrepreneur Monitor Report for 2014

Total Entrepreneurial Activity (TEA) businesses that are less than 3.5 years old

Four types of nations

Of the eight emerging economies analysed by Small Business Insight, four types of countries emerge:

1. Good going: High startup rate and average number of entrepreneurs failing. (Brazil)

2. Good pipeline: High startup rate, but still way too many failing fast.

(Chile and Colombia) 3. Some worry: Low number of adults starting up, but failure rate not sky high.

(Malaysia, India, Georgia and Russia) 4. Most worrying: Low startup rate and high number still failing.

(South Africa)

2013 2014 Target (ideal level)

Total Entrepreneurial Activity

10.6% 6.97% 14%

Adults in Business 2.9% 2.68% 4.5%

Notice broad similarities in the co-movement of both variables

1% rise in TEA results in a 0.05% rise in per capita GDP. Per capita income will rise by about R2800 per annum or R233 per month per person. 1% rise in per capita real GDP causes a 19% rise in total entrepreneurial activity. This implies level of economic growth is critical for entrepreneurial activity.

SA the land of contrasts!

Entrepreneurial Class

• 6 Billionaires

• 87 centi-millionaires

• 46 800 Dollar Millionaires

Majority of the $-millionares belong to the White and Indian groups

80% of them have matric or tertiary education

The Poor

• 51.8 million have no wealth

• 53.8 million live below the poverty line

Majority are African.

17% of Africans have tertiary education.

53.4% of Africans did not reach matric.

Entrepreneurship: Economic and Social development

• Entrepreneurship = praxis for change, reducing: poverty, unemployment, inequality

• Its an Omnibus term, covering SMEs through to new venture creations to innovations and individualism

• African perspective adds Co-orperatives

• NDP (2011) Seedbed for new industries, renewal of industrial base, export led growth, agri-business

The Role of Tertiary Institutions • SMME Economy needs educated Entrepreneurs with skills to create, manage

and grow successful businesses.

• Institutionalization of Entrepreneurial knowledge and skill is an imperative in order to mould future entrepreneurs with skills to be enterprising and innovative.

• Make students aware of the astounding benefits of self-involvement and self-development through entrepreneurial activities

• The market requires individuals with certain graduate attributes: practical problem solving skills, Reflective individuals, high level skills and analytical abilities.

• Encourage graduates to take calculated risks. Studies by Louw et al., (2003) and Dhilwayo (2008): Black SA students are more confident of their abilities relative to Whites and Asians but tend to be reluctant in starting businesses because of the risks involved compared to their counterparts.

• Jack and Anderson (1999), entrepreneurship is both Science and Art

• Need traditional pedagogic approaches to deal with the science of it

• Need to be inducted or apprenticed into working of the business world to deal with the art aspect

Role of Tertiary Institutions Continued • Science (structured learning)=functional knowledge: Accounting, financial

analysis, marketing, info systems, com law, leadership and management.

• Need to integrate functional knowledge into holistic activity.

• Core of entrepreneurship = creation and innovation……cannot be taught.

• Must be inducted (engage with specifics) ie., serve apprenticeship (learning by doing) in small business environment

• Must be exposed to unstructured situations, must encounter risks and ambiguities

• Offering combination of courses can build capacity and make up for lack of training & experience eg., entrepreneurship & small business management of creativity and innovation, opportunity & recognition, business plans & case studies.

• Business incubators (Ndedi (2009))

• ENACTUS (Bawuah, Baume and Hinson (2006), mentions SIFE)

• Entrepreneurship courses for students from other disciplines and community members (Lowegren (2006)

• Social Entrepreneurs (World Economic Forum, 2014)

Case Study: University of Zululand

• In an attempt to study the entrepreneurship programme at Unizulu I employed the qualitative approach which is based on relativist ontology that the researcher and subjects construct reality intersubjectively.

• Developed 2 sets of questionnaires

• Three of the four staff members involved in the entrepreneurship programme were interviewed

• Two of the six students involved in the ENACTUS executive committee were interviewed

Unizulu Entrepreneurship Programme BCom programme offers a comprehensive array of courses inclusive of the entrepreneurship course (3rd year level) = science (structured learning)

The Entrepreneurship Course

Enrolment = 400 (50% Bcom and 50% other) the pass rate range 65%-70%

Course structure is 60% theory and case studies while 40% practical application.

Students in groups of 10 to simulate a business plan (BP) which is presented before a panel which poses as the Bank from which a business loan is being sought.

Students must research a start-up business and draw up a comprehensive BP inclusive of marketing strategies, financial cash flows, financial analysis, SWOT analysis, government regulations

Panellists comprise, lecturers, community members, and mentor(s) from banking and private sector. The banking and private sector panellists are usually ex-students of the University.

Student Feedback

• They find private/banking sector inputs to be most useful for it provides them with insight into how the real world of business operates

• Roughly about 1- 3 persons per group become inspired to start their own businesses. They are usually the alpha students at the forefront of the presentation

• The experience empowers students to perform well at interviews even for corporate jobs

• The impression is most of the students are merely interested in obtaining a credit.

• The major drawback of the exercise is that its hypothetical

ENACTUS = (Enterprising + Action + Us) A US based NGO that partners with tertiary institutions, government agencies & private

sector that seeks to improve the living standards of people worldwide through promoting the principles and values of free market economics and entrepreneurship

• 38 countries subscribe to ENACTUS. In SA 25 tertiary institutions are signed up members.

• Unizulu has 300 members, 3rd largest membership behind Fort Hare (400) and University of JHB (800)

• ENACTUS is based on 5 principles:

– Project must have an entrepreneurial approach

– Must address a need, ie., benefit society in the sense of providing a good or service

– The living standards of those involved in the project must improve

– The project must build capacity among a number of individuals

– The project must not only be economically viable but also environmentally and socially friendly.

• On a yearly basis 6-7 active projects registered with us.

• Community members approach us seeking advice

• Staff/students identify potential businesses that we approach and advise them to come on board

• Some projects are initiated by students themselves.

• Projects initiated by students from other disciplines approach ENACTUS students for further guidance & support

Project Funding

• Students raise funds through sponsorships (private and public), fund raising campaigns

• They also get help from BABs and ENACTUS

Students apply their theoretical & technical knowledge to help new start-ups and SMEs to:

-draw up business plans to secure funding

-identifying new products and markets

-streamlining business to operate efficiently

-engaging in marketing strategies

-financial cash flows and financing needs

-SWOT analysis

Once the first draft of the business plan is completed, it is presented and discussed extensively among entrepreneur, ENACTUS members, staff mentors.

Thereafter it is sent to BABs for comment.

• After final revisions have been made the BP is presented to the Bank or other funders eg., DTI

• Such businesses remain in incubation for a 3 year cycle & thereafter they are left alone

• But the business is free to seek consultation any time.

• Successful projects still in incubation are entered into variety of competitions

• The success of ENACTUS is its strong spirit of institutionalized competition

• On a yearly basis students compete in a GRAND national competition and winners are entered in the international competition

• Before the Grand competition there are Mini (thematic-eg., green technology, sustainable livelihoods) competitions are also sponsored regularly. Winners from these competitions automatically enter the Grand competition.

• Mini competitions serve to showcase projects that attract additional funding, guidance and other support from sponsors, BABs and Government. Sponsorships are based on success and potentiality.

• Sponsors include: DTI, Platinum Industry, Harmony Gold, ABSA, SASOL, MTN, Ford, Ned Bank, Pick & Pay

• Competitions are judged on 5 mentioned impact factors (need, benefit, capacity, entrepreneurial, socio-environmental)

• Winners enter into international competition

• Unizulu has entered a number of international competitions we tend to lose out in the semi-finals for the following reasons:

• Our business impact is too localised compared to the winning project.

• The benefit impacts of our innovations are not significant/wide-ranging enough.

• Our international competitors commercialised innovations tend to be highly sophisticated ie., involving interdisciplinary specialists working together.

Outcomes:

• Both students & staff benefitted much from international competitions, they are sensitized to what it takes to win them and they are already working to win in the future.

• Student experiences in the Entrepreneurship course (especially in the business plan compilation) and in being involved in Enactus equips them with the necessary confidence to perform well at interviews for employment in the corporate sector as well.

• Some students have become inspired to become social entrepreneurs

• Future Programmes

Strike a balance between Science(structured learning) & Art (practice)

• Compulsory for entrepreneurship students to be ENACTUS members

• Business Clinic= Community Outreach + Research + WIL (credit bearing)

• BC will Draw up a register of SMEs in the surrounding communities, create incubation centre to be managed by students and staff

• BC will offer advice, secure funding/resources to assist start-ups

• Introduce Business Consultation Degree (Entrepreneurship in extensive detail)

• Offer short certificate courses that will provide the essential know how to run their own businesses

• Develop working partnerships with other Faculties & Institutions:

– Science Faculty: collaborate with commercialisation of innovations

– Arts/Education Faculty: collaborate on social entrepreneurship

– Seek collaborative entrepreneurial endeavours with other Universities (both local and foreign)

– Seek private public partnerships through seeking commitment of alumni + Corporate social responsibility initiatives

• Through the above approaches we hope to enable students to become willing to take calculated risks and become entrepreneurs.

• Through business clinic/ENACTUS and short courses we hope to reach out to other disciplines and the greater community.

• Through international collaborations/ exposure/competitions we hope to learn to achieve greater impact.

• We can’t do it alone we need to work together.

THANK YOU