5 th ERENET Jubilee Annual Meeting 20 May

5 th ERENET Jubilee Annual Meeting 20 May 2011, Budapest Corvinus University Entrepreneurial Education in Germany Prof. Dr. Hans-Jürgen Weißbach Prof. Dr. Martina Voigt University of Applied Sciences Frankfurt/Main Prof. Dr. Hans-Jürgen Weißbach Prof. Dr. Martina Voigt Entrepreneurial Education in Germany 1

Topics § Entrepreneurial education in Germany: an overview § Is there a way to teach Risk-Taking? § The study program of the MBA Entrepreneurship and Business Development at the University of Applied Sciences in Frankfurt Prof. Dr. Hans-Jürgen Weißbach Prof. Dr. Martina Voigt Entrepreneurial Education in Germany 2

How we started: The beginning of entrepreneurial education at FH Frankfurt 1998 / 99: „Ten Theses“ 1. Universities are not predestined to become locations of entrepreneurial education (EE). 2. Students do not see that a care competence of universities in EE. 3. Academic teachers do not love EE. 4. Students of universities of applied sciences do even less like EE although their education is more practically oriented. 5. Certificates force students and teachers to stick to norms that are not productive with regard to the aim of creating businesses. Entrepreneurial Education in Germany

… with 20. 000 DM (about 10. 000 €) of sponsoring 6. Low-Budget-Projects of EE reduce the risk and increase creativity. 7. Mixed team of academic teachers and practioners will reach best results. 8. Successful EE will change the university from inside. Access to external funds will be increased. 9. EE should be organized step by step (seminar, intensive seminar, coaching). 10. We cannot select our start-ups. We have to serve everybody who asks for help. Frankfurt, Dec 3 rd, 1999 Entrepreneurial Education in Germany

How it went on in Frankfurt § § § 2001 – 2008 EXIST projects supported by federal ministry of science, of economy, and by the Federal Country Hessia 2005 foundation of institute of entrepreneurship at FH Frankfurt (with incubator) – www. ife-frankfurt. de 2005 entrepreneurship as eligible in diploma courses of Department of Economy and Law Since 2008 in BA and MA courses Since 2008 special activities for migrants; increasing international cooperation (e. g. projects EEE, TASE) 2010 accreditation of MBA Entrepreneurship & Business Development - www. fh-frankfurt. de/mba-ebd Prof. Dr. Hans-Jürgen Weißbach Prof. Dr. Martina Voigt Entrepreneurial Education in Germany 5

… and elsewhere in Germany § § § 1980 s First chair for general management with focus on entrepreneurship in Dortmund, increasing research at BIFEGO Cologne 1998 First chair only for entrepreneurship Today about 100 chairs in Germany, about 2/3 at departments for economy About 15 local university clusters with specialized incubating facilities, patent services etc. to support entrepreneurs, most of them with technical universities as a focus (Karlsruhe, Dresden, . . . ) Public-private partnership projects in many clusters Prof. Dr. Hans-Jürgen Weißbach Prof. Dr. Martina Voigt Entrepreneurial Education in Germany 6

Still remaining problems § § § Mentality changes very slowly A culture of entrepreneurship is still lacking in many places and in the whole society Lack of opportunity-dricen entrepreneurs High-tech start-ups are rare Many students do not make use of their particular skills acquired at university when starting their businesses (döner shops, pizzeria, event service, etc. ) Average of founders is about 35, bachelors leave university at 23 only small measurable impact of academic education (if any) Prof. Dr. Hans-Jürgen Weißbach Prof. Dr. Martina Voigt Entrepreneurial Education in Germany 7

Some figures as an introduction Prof. Dr. Hans-Jürgen Weißbach Prof. Dr. Martina Voigt Entrepreneurial Education in Germany 8

Maximal start-up rate in periods with maximal insolvency rate Prof. Dr. Hans-Jürgen Weißbach Prof. Dr. Martina Voigt Entrepreneurial Education in Germany 9

Low early-stage entrepreneurial activities United Arab Emirates Iceland Greece Republic of Korea United States Switzerland Norway Netherlands average Israel United Kingdom Slovenia Finland Spain France Germany Italy Hong Kong Denmark Belgium Japan 0 Prof. Dr. Hans-Jürgen Weißbach Prof. Dr. Martina Voigt 2 4 6 8 10 Entrepreneurial Education in Germany 12 14 10

Low business ownership rate Greece Netherlands Iceland Finland Switzerland Republic of Korea Norway Japan average Spain United Kingdom United States Italy United Arab Emirates Slovenia Germany Denmark Israel France Hong Kong Belgium 0 2 Prof. Dr. Hans-Jürgen Weißbach Prof. Dr. Martina Voigt 4 6 8 10 Entrepreneurial Education in Germany 12 14 16 11

High proportion of necessity-driven entrepreneurship Netherlands Germany Japan Greece Israel United States Hong Kong Finland average United Kingdom Spain Italy France Slovenia Norway Iceland United Arab Emirates Republic of Korea Belgium Switzerland Denmark 0 5 Prof. Dr. Hans-Jürgen Weißbach Prof. Dr. Martina Voigt 10 15 20 25 30 35 Entrepreneurial Education in Germany 40 45 50 12

Low in opportunity-driven entrepreneurship United Arab Emirates Republic of Korea Slovenia Switzerland France Japan Finland Iceland Norway Italy Denmark average United States Belgium Hong Kong Israel Greece United Kingdom Germany Spain Netherlands 0 10 Prof. Dr. Hans-Jürgen Weißbach Prof. Dr. Martina Voigt 20 30 40 50 60 Entrepreneurial Education in Germany 70 80 90 13

High Fear of Failure Japan France Spain Greece Italy Israel Hong Kong Germany Denmark Iceland average United Kingdom Slovenia Switzerland Netherlands Belgium United States United Arab Emirates Finland Norway Republic of Korea 0 Prof. Dr. Hans-Jürgen Weißbach Prof. Dr. Martina Voigt 10 20 30 40 Entrepreneurial Education in Germany 50 60 14

Low perception of opportunities Republic of Korea United Arab Emirates Iceland Finland Norway Switzerland Denmark Slovenia Israel United States average Greece Italy United Kingdom France Germany Spain Belgium Hong Kong Netherlands Japan 0 Prof. Dr. Hans-Jürgen Weißbach Prof. Dr. Martina Voigt 10 20 30 40 Entrepreneurial Education in Germany 50 6 15

Pessimism about one’s own entrepreneurial capabilities United Arab Emirates Greece United States Netherlands Slovenia Iceland Switzerland Spain United Kingdom Norway Republic of Korea average Italy Germany Israel Belgium Finland Denmark France Hong Kong Japan 0 10 Prof. Dr. Hans-Jürgen Weißbach Prof. Dr. Martina Voigt 20 30 40 Entrepreneurial Education in Germany 50 60 70 16

Entrepreneurship as a good career option? Not in Germany. . . Norway Italy United Arab Emirates United States Switzerland Greece Netherlands France Spain Republic of Korea Israel average Slovenia Germany Iceland United Kingdom Denmark Belgium Hong Kong Finland Japan 0 10 Prof. Dr. Hans-Jürgen Weißbach Prof. Dr. Martina Voigt 20 30 40 50 60 Entrepreneurial Education in Germany 70 80 9 17

Status of successful entrepreneurs Finland Switzerland Slovenia United States United Arab Emirates Germany Denmark United Kingdom Israel France Republic of Korea Italy average Greece Norway Netherlands Iceland Spain Hong Kong Japan Belgium 0 10 Prof. Dr. Hans-Jürgen Weißbach Prof. Dr. Martina Voigt 20 30 40 50 60 Entrepreneurial Education in Germany 70 80 9 18

Entrepreneurial environment in Germany Entrepreneurial education at school Societal norms and values Entrepreneurial training out of schools Regulation and taxation policy Support for women starting up a business Knowledge and technology transfer Market entry barriers Finance Market change Priorities and dedication (politically orientated) Consultants and suppliers for newly established companies Protection of intellectual property Public subsidy infrastructure Physical infrastructure 0 Prof. Dr. Hans-Jürgen Weißbach Prof. Dr. Martina Voigt 0, 5 1 1, 5 2 2, 5 Entrepreneurial Education in Germany 3 3, 5 4 4, 5 19

Why business fail § § § § Liquidity problems Lack of capital, poor credit agreements Uncontrolled cash flow Wrong forecast: income too high, expenses too low Insufficient sales Unexpected and rapid growth Over-investment in fixed assets Personal use of business funds Insufficient provision for unanticipated contingency New competition Poor location Recessions Incompetent or dishonest employees Prof. Dr. Hans-Jürgen Weißbach Prof. Dr. Martina Voigt Entrepreneurial Education in Germany 20

Entrepreneurial spirit: traits needed § § § Ambition, drive, achievement Optimistic attitudes Calculated risk taker Innovative & creative (within certain limits) Hard worker (not suffering from routine work) Works under stress Skilled organizer Goal & people oriented (at the same time) Eye for opportunity Self-confident & self-reliant High tolerance of ever changing situations Disciplined, persistent & determined Prof. Dr. Hans-Jürgen Weißbach Prof. Dr. Martina Voigt Entrepreneurial Education in Germany 21

Personality traits and probability of becoming self-employed Recent research on this subject conducted by DIW on base of the German Socio Economic Panel (SOEP) found that there are five personality traits that make becoming self-employed significantly more probable: § § § Openness to experience Conscientiousness Extraversion Emotional stability Readiness to take risks Prof. Dr. Hans-Jürgen Weißbach Prof. Dr. Martina Voigt Entrepreneurial Education in Germany 22

Personality traits and probability of staying in business DIW researcher say that the following personal traits make successfully staying in business significantly more probable: § Conscientiousness (high) – ability to stand routine work with high precision § Agreeableness (low) – you need not to be a social personality character § Readiness to take risk (medium) – not too much! Prof. Dr. Hans-Jürgen Weißbach Prof. Dr. Martina Voigt Entrepreneurial Education in Germany 23

Teaching Risk-Taking at University? § § Some ideas how to encourage risk-taking behavior in an academic environment: Modelling risk-taking moves: let students play with complex issues to help them move beyond a standardized-exam mindset and develop readiness to controlled risk-taking Using peer-based learning: let students try out risky ideas ( e. g. addressing a tricky problem-set or questioning a commonsense conclusion) with a few peers rather than in a full class Building assignments around questions: ask students to identify and reflect on questions, problems, or complications without moving too soon to solutions or arguments Rewarding academic risk-taking: praise students for their willingness to try something that felt difficult and do not only reward them for the “safe and right”. Prof. Dr. Hans-Jürgen Weißbach Prof. Dr. Martina Voigt Entrepreneurial Education in Germany 24

The MBA program at FH Frankfurt § 5 -6 semesters part-time § Presence phase about one to two weeks / semester and some weekends § 120 ECTS § 25 % taught in English § 9, 800 € § Accreditated by FIBAA § www. fh-frankfurt. de/mba-ebd Prof. Dr. Hans-Jürgen Weißbach Prof. Dr. Martina Voigt Entrepreneurial Education in Germany 25

“Entrepreneurship & Business Development” Target groups: § Entrepreneurs § Corporate managers as Intrapreneurs and (future) heads of business areas § Owner-managers of SME § Social entrepreneurs § Consultants Prof. Dr. Hans-Jürgen Weißbach Prof. Dr. Martina Voigt Entrepreneurial Education in Germany 26

Content § Start-up, growth, business development, intrapreneurship § General management § Development of business ideas and business models § Diversification, sustainability, adding value § Gaining and keeping customers § Finance and venture capital § Crisis management § Managerial skills § Knowledge management and protection § Business Networking § Strategic interactions (mergers, resource sharing, dividing risks, partnering, …) Prof. Dr. Hans-Jürgen Weißbach Prof. Dr. Martina Voigt Entrepreneurial Education in Germany 27

Thank you for your attention! Prof. Dr. Hans-Jürgen Weißbach Prof. Dr. Martina Voigt Entrepreneurial Education in Germany 28