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Every Character Needs a Productive Entrepreneurial Spirit

Published onNov 16, 2022
Every Character Needs a Productive Entrepreneurial Spirit
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Tilburg University’s latest strategic plan (2022-2027) focuses on four core values: Curious, caring, connected, and courageous. The university aims to be a place where both students and employees can (further) develop their character in these four directions. For this, they must acquire and demonstrate an entrepreneurial spirit, as the Executive Board and Deans state in their foreword. Later on, in the strategic plan, the importance of entrepreneurship and entrepreneurial thinking is emphasized several times more. The university strives to pay more attention to entrepreneurship during educational programs, and Tilburg University is involved in several initiatives that stimulate and facilitate entrepreneurship. However, it remains unclear what exactly is meant by entrepreneurship, who should master it, and what role the university plays in this. In this essay, I discuss possible answers and conclude: Indeed, every character needs an entrepreneurial spirit, but one that is productive for society.

Entrepreneurship and Entrepreneurial Spirit in the Strategic Plan

It is not uncommon for entrepreneurship to be seen as the solution to many problems. It is said to provide the necessary innovations, and hence, drive processes of creative destruction and accumulation (Schumpeter, 1934; 1942). In addition, small and medium-sized enterprises (SMEs) are widely regarded as the foundation or engine of the Dutch economy (e.g., Nederlands Comité voor Ondernemerschap, 2021). But what is entrepreneurship exactly? The answer to this question is more complex than it may seem at first glance. The university also does not seem to be able to answer this question itself. After all, entrepreneurship has been mentioned several times throughout the strategic plan, but nowhere does it become really specific.

Under the heading “connected” it says: “We want to expand the (social) entrepreneurship of our employees and students in the Tilburg Spoorzone, and we continue to support them with our IQONIC entrepreneurship program”. A question that this sentence immediately raises: Should entrepreneurship of all employees and students be increased, or should the number of entrepreneurs among employees and students be increased? In the former case, everyone must get involved in entrepreneurship. In the latter case, room is left for nonentrepreneurial types (to the extent that they exist). And what does it actually mean for Tilburg University employees to be entrepreneurially active? Inside or outside the employer organization? As part of their actual job at the university or alongside it? And what support can IQONIC offer to students and employees exploring a wide variety of entrepreneurial initiatives at different stages of their life cycle? Fundamental questions that remain unanswered in the strategic plan.

One page later, it is again emphasized that entrepreneurship will be facilitated, especially on the external campuses in ‘s-Hertogenbosch (Jheronimus Academy of Data Science), Utrecht (Tilburg School of Catholic Theology), and in the center of Tilburg (in the Deprez building in the Spoorzone). Also here, the strategic plan does not get any more specific than this. It neither specifies how entrepreneurship will be facilitated at these locations, nor what the intended purpose is nor by whom and for whom exactly. Those directly involved seem to be allowed to flesh this out themselves. It was recently announced that the university has far-reaching plans to establish an additional IQONIC incubator in the Spoorzone.1 According to the press release, it will be “the place where you, as an enterprising student and startup, want to be in the middle of”. But why? One can expect a university to have a good scientific basis for such a bold statement.

Then again a few pages later, under the heading “courageous”, one talks about “room for entrepreneurial thinking” and its importance for exploring “new paths from an independent spirit”. This seems to refer to having an entrepreneurial mindset or spirit. This is absolutely worth pursuing, as it could be beneficial to everyone to a greater or lesser extent, regardless of what professional career one aspires (see later on). As such, it is partially separate from the university’s efforts to stimulate and facilitate entrepreneurship in the traditional sense. It rather affects the culture of Tilburg University as an organization. For example, which learning and working climate prevails. To what extent does it offer room for nonconformists to voice their thoughts and ideas, for creative minds to explore new paths, and for everyone to make mistakes (and learn from them, of course)? But how does the university want to achieve and maintain this? The university’s strategy does not provide enough clarity on this matter either.

Entrepreneurship and Entrepreneurial Spirit in the Scientific Literature

In the Fall of 2021, a piece written by Professor Juliëtte Schaafsma appeared on Univers Online with the provocative title “Entrepreneurship clashes with the university’s core values” (Schaafsma, 2021).2 Particularly interesting, because the university itself states that an entrepreneurial spirit is one of the crucial conditions for developing your character towards the four core values of the university. Schaafsma (2021) rightly says that entrepreneurship is often poorly defined (like in the strategic plan of Tilburg University, see earlier on), but then also does not get beyond a very one-sided, caricatured, and stereotypical image herself. According to her, entrepreneurship is almost equal to corruption, fraud, and relentless growth, purely for the entrepreneurs’ own benefit and always at the expense of (vulnerable people in) society and/or our world as a whole. Therefore, it is about time for further clarification and some nuance based on the scientific literature.

First of all, the entrepreneur does not exist. Research has shown time and again that entrepreneurs form a very heterogeneous group of individuals (e.g., Terjesen et al., 2016). The ambitious, growth-oriented founder of a startup is an entrepreneur. The owner of an established (small and medium-sized) enterprise is an entrepreneur. The solo self-employed individual (or freelancer) is an entrepreneur. But also what we have come to call bogus self-employed are entrepreneurs.3 At least, when we take their registration with the Chamber of Commerce (KvK) as a starting point. Based on this, self-employed individuals and employees are treated quite differently in legal and fiscal terms. However, the boundaries of this dichotomy are increasingly blurred (Liebregts & Stam, 2017).

On the one hand, not all self-employed individuals act as entrepreneurial as one typically expects of entrepreneurs. That is, they are not innovative and/or growthoriented. On the other hand, there is a large group of workers with a paid job, who pursue innovative activities for their employers. These so-called entrepreneurial employees or intrapreneurs develop new products or services within the context of an established business (Antoncic & Hisrich, 2001; 2003; Liebregts et al., 2015).

Such entrepreneurial behavior of employees is increasingly valued by employers, spurred by globalization and technological development.

Widely used definitions of entrepreneurship take this into account, either implicitly or explicitly. According to Shane & Venkataraman (2000), entrepreneurship is about “the discovery, evaluation, and exploitation of opportunities to create future goods and services” (218).4 This can be done either by setting up an entirely new business (as an independent entrepreneur) or by developing a new business activity within an existing business (as an entrepreneurial employee). Other definitions mention both possibilities more explicitly. For example, Sharma & Chrisman (1999) think of entrepreneurship as “... acts of organizational creation, renewal or innovation that occur within or outside an existing organization” (17). There are also socalled hybrid entrepreneurs, i.e., individuals who combine a paid job with running their own business (Folta et al., 2010). But, whichever of the aforementioned forms of entrepreneurship we are talking about, they all require a certain level of entrepreneurial mindset or spirit in order to be successful (McGrath & MacMillan, 2000; Kuratko et al., 2021).

Hence, entrepreneurship is omnipresent in society. It takes place within new and established organizations, of both public and private nature, and it is practiced by both independent entrepreneurs and entrepreneurial employees. All these different forms of entrepreneurship make important contributions to that same society to a greater or lesser extent. Entrepreneurial individuals innovate, create jobs, drive labor productivity, and hence, economic growth (Audretsch et al., 2006). All this at least improves our economic or material prosperity (Stam, 2015).

Having said that, an entrepreneurial spirit and skills can also be utilized in a negative way. In this regard, the late William Baumol once made a very valuable distinction between productive and unproductive entrepreneurship (Baumol, 1990). An obvious example of unproductive or even destructive entrepreneurship is organized crime. Criminals are often extremely entrepreneurial, but that is not quite the type of entrepreneurship a society strives for. Corruption and fraud are also good examples of this. We benefit, however, from entrepreneurs who engage in socially valuable activities (Baumol, 1990).

In short, the question is not whether we should embrace entrepreneurship – we should, without a doubt – but how we can ensure that entrepreneurial talents use their knowledge and skills in a way that is productive for society (or at least not destructive). That is, in such a way that an increase in our economic prosperity is achieved while respecting ecological limits, and in a socially inclusive manner. Then we talk about so-called broad prosperity, an approach that also includes intangibles like happiness and well-being, of both current and future generations (see also Stam, 2022). Social forms of entrepreneurship contribute to a society’s broad prosperity almost by definition, but – mind you – social entrepreneurs also need a good dose of entrepreneurial spirit in order to survive or even grow.5

Entrepreneurship, Entrepreneurial Spirit and the Role of the University

Now let us get back to the seminal work of Baumol (1990). In it, he also argued that how entrepreneurs behave mainly depends on the prevailing institutions, or “the rules of the game, the reward structure in the economy” (Baumol, 1990: 3; see also North, 1990; 1991). An important distinction here is the one between formal institutions (such as tax and competition rules) and informal institutions (such as cultural norms and values). Whereas rules and laws can be adapted by policymakers, cultural influences are path-dependent and can hardly be changed, if at all. This at least requires a very long time. Baumol (1990), however, reasoned that we should not wait for slow cultural changes, but rather proactively change rules in such a way that they (partially) undo any undesirable cultural effects. Anyway, it is the institutional framework that determines which type of entrepreneurship (productive or unproductive) is more common, and thus ultimately the extent to which society benefits from entrepreneurial activities (see also Bjørnskov & Foss, 2016; Bruton et al., 2010).

In his article, Baumol (1990) mainly discusses institutions at the national level and points to the crucial role of governments in shaping them. At the same time, rules and reward structures are also designed at many other levels. This brings us to the role of the university. The university must realize that it has a strong influence not only on the number of entrepreneurs it produces but also on the extent to which they contribute to our (broad) prosperity. At the moment, the university’s strategy merely mentions the importance of entrepreneurship and entrepreneurial thinking in a generic sense. And Tilburg University seems to be prepared to stimulate and facilitate all this as much as possible. The more, the merrier, so it seems. However, its focus should be shifted from quantity to quality (Bosma, 2022; Techleap/UU, 2021). That is, the university should strive for as many characters as possible with an entrepreneurial spirit that is productive for society.

But how far does the university’s influence reach? When delving deeper into the entrepreneurship literature, we see that researchers have been questioning for decades whether entrepreneurship is something in a person’s blood, whether it can be taught and learned, or a combination of both. This is also known among entrepreneurship scholars as the nature-versus-nurture debate. In other words, is someone born to be an entrepreneur or can entrepreneurs be made (better)? The short answer: There is empirical evidence for both perspectives.

On the one hand, involvement in entrepreneurial activity appears to be genetically determined (see e.g. Nicolaou et al., 2008). On the other hand, research shows that one’s environment or upbringing can also play an important role, although there are rather large differences between men and women (Zhang et al., 2009). Yet another strand of literature looks at the influence and effectiveness of entrepreneurship education. The numerous studies within this stream create a mixed picture; there is some evidence that you can effectively educate individuals in entrepreneurship or key elements of it (see e.g. Von Graevenitz et al., 2010), but there is also some research that finds no or even negative effects (see e.g. Oosterbeek et al., 2010). Above all, there is much criticism on the methods used in this scientific domain. For example, one usually looks at short-term effects and subjective outcome measures, such as a person’s intentions to start as an entrepreneur (Nabi et al., 2017). Even though students’ entrepreneurial intentions often increase because of entrepreneurship education, this does not necessarily mean that they will become self-employed later on, let alone whether one is (and remains) successful in the longer term (Pittaway & Cope, 2007).

All in all, it is not yet a foregone conclusion that entrepreneurship education produces more and/or better entrepreneurs. It should be noted, however, that all existing studies use a narrow definition of entrepreneurship. They only look at the effects on independent forms of entrepreneurship, not at the impact on entrepreneurship within existing organizations. If future studies were to include that option, there could well be a significantly altered picture. It is quite conceivable that entrepreneurship education will give students a taste of what selfemployment entails, deterring some of them, and steering them towards a salaried job. Nevertheless, a certain entrepreneurial spirit and related skills are also very valuable in that context. In fact, in a corporate environment, all kinds of important resources are more widely available than in a startup context. Think of human, physical and financial capital, which usually makes it easier to develop and scale new products and services.

So much for the alleged effects of full entrepreneurship programs (such as Tilburg’s Bachelor’s in Entrepreneurship and Business Innovation) and entrepreneurship courses or trainings within other types of programs. Given the existence of several university incubators, and the intention to establish yet another one in the center of Tilburg (see earlier on), it is also worth looking at what the scientific literature tells us about their efficacy.6 There is a study that points at incubators’ positive contribution to the regional economy, provided that there are sufficient opportunities for early-stage financing, such as seed capital by business angels in the network of the incubator (Aernoudt, 2004). The same study emphasizes that there are many different types of incubators, each with their own philosophy, objectives, and activities. Therefore, it is difficult to determine the effectiveness of incubators as if they are one particular type of organization. Colombo & Delmastro (2002) find a number of specific positive effects of incubators that particularly focus on technology-based startups. On average, supported companies achieve higher growth, adopt advanced technologies faster, and are more successful in establishing collaborations (with universities, for example). So, there is something to be said for university incubators, but conditional on having clear objectives and a sharp demarcation.

Conclusions and Recommendations

The strategic plan of Tilburg University highlights the importance of entrepreneurship and an entrepreneurial spirit among students and employees. That in itself is good news, but it lacks an in-depth vision and a clear explanation. The university allows itself to express vague intentions and to share generically formulated objectives. This provides unnecessary room for criticism because it is easy to argue why every character needs an entrepreneurial spirit. It is important, however, that students and employees apply their knowledge and skills – whether this has been learned or not – to entrepreneurial activities that lead to social value creation.

In this essay, I have explored our collective understanding of entrepreneurship. We often think of individuals or teams setting up and owning-managing a business for their own risk and reward (independent entrepreneurship or self-employment). However, entrepreneurship has many manifestations, including entrepreneurship by existing firms (corporate entrepreneurship), by employees within existing firms (intrapreneurship), and by (employees of) public organizations like most universities (public entrepreneurship). Each of these forms requires a certain entrepreneurial mindset or spirit. Furthermore, I have outlined how all aforementioned forms of entrepreneurship can contribute to our prosperity, in both its narrow and its broad sense. In order to achieve this, we must avoid unproductive entrepreneurship, and instead focus on activities that are productive for society. Think of entrepreneurs who want to contribute to important contemporary societal goals (social entrepreneurship).

In its strategic plan, Tilburg University includes hardly anything about what kind of entrepreneurship it strives for. Every student and employee is supposed to act entrepreneurial, no matter how, so it seems. This directly contradicts the current scientific discourse, which clearly acknowledges that not every form of entrepreneurship makes a valuable contribution to society. This calls for clear choices regarding whom should think and act entrepreneurially, in what way(s), and what role the university has. I challenge the university to extensively reflect on all this in a further explanation of its strategy, as an advance on the next multi-year strategic plan. It is well known that entrepreneurs benefit from as few contextual uncertainties as possible, and from having a clear direction. This is perhaps even more true for all the budding entrepreneurs and their stakeholders that our beautiful university is home to.

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