Entrepreneurial Education and Business Development Built Into Training

Entrepreneurial Education and Business Development Built into Training

i Foreword

The American University of Beirut (AUB), in partnership with the Global Confederation of Higher Education Associations for Agricultural and Life Sciences (GCHERA), EARTH University and the W.K. Kellogg Foundation has launched a project on “Transforming Higher Education”. This project seeks to share five Key Elements of Success practiced by EARTH University and others with universities in Mexico and Haiti, and across GCHERA’s global university network over a period of three years between July, 2018 and June, 2021.

The goal of the project is to advocate for the education of future leaders with the commitment to serve society–leaders capable of positively affecting changes in their environment, promoting peace and understanding, and respecting diversity while contributing solutions for the major challenges of the 21st Century. The project´s purpose is to encourage and facilitate change processes within the university as well as to promote greater university engagement with the larger community to achieve the twin goals of producing future leaders and change- agents, as well as fostering greater prosperity and equity in society. This publication is one of a series of five papers that present Key Elements of Success the project seeks to share and which, taken together or individually, can contribute to facilitating university transformation processes. These five elements are considered fundamental in the successful education of leaders who will be prepared to offer solutions to the diverse and complex challenges of feeding an ever growing and more diverse population sustainably, mitigating and adapting to a changing climate while also contributing to the economic well-being of our communities. This requires leaders with strong ethics and values as well as solid grounding in theoretical knowledge and practical skills necessary to provide the technical, environmental and socially sensitive solutions required. The five Key Elements of Success presented in the series of papers are experiential/ participatory education; community engagement; training in entrepreneurial education and business development; ethical and value based leadership; and decision-making and conflict resolution. Three additional factors which enhance the impact of the five Elements of Success should be considered as well. The first is the role of the university professor as a facilitator of learning, the second is an explicit recognition that the five Elements of Success should permeate and be reinforced across the university educational system, including both curricular and co- curricular activities and programs and the third is the need for policy changes which are essential to their success. The traditional role of the university professor as the repository of knowledge is increasingly being questioned. An educational system featuring the Key Elements of Success envisions a role for the professor as one who guides and facilitates student’s learning through discovery, self-directed learning, analysis, reflection, group interaction, among others. The responsibility of the professor is to create a stimulating learning environment and provide students with real life opportunities to observe, develop ideas, apply theories, implement solutions and learn from the results. Rather than focusing on “covering the material”, professors should be concerned with students learning on multiple levels, including problem solving and analytical skills, self-confidence, teamwork, personal relationship skills among many others. Professors should be recognized and stimulated for their innovations and contributions as “Facilitators of Learning”. The professor’s commitment to participatory education, to learning with and from the community, to providing continuous feedback and support requires time and commitment far beyond the delivery of lectures and supervision of laboratory sessions. In addition to the changed role for the professor as the facilitator of learning, the entire university must be committed to the learning system oriented towards the five Elements of Success. As the five essays make clear, each element of success goes beyond the traditional classroom and involves everyone on campus and beyond, including community members. Participatory and experiential learning occur in the community, on farms, as part of research activities and as part of the university’s commercial undertakings. Ethics and values are not just discussed and analyzed in the classroom but must be key features of the university environment, embodied in institutional policies and consistently demonstrated by university administrators, faculty, staff and students. The effective resolution of conflict is an acquired skill requiring systematic evaluation and analysis and should be actively practiced in relations between faculty, staff, administrators and students and well as between the university and the 1 French B. 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Kellogg Foundation. necessarily represent thethinking or vision of American University of GCHERA, EARTH Beirut, What is written inthis series of documents represent the views of theauthors and does not | Project Director | Project 1 .

Foreword iii Entrepreneurial Education and Business Development Built into Training 1 work collaborative since tool integration apowerful be to shown been has education entrepreneurial Additionally, problems. of avariety to solutions innovative or opportunities untapped new finding ones, existing disrupting substantially or markets new entirely generating innovations breakthrough developing for responsible particularly are Startups innovation. encouraging and competition, promoting jobs, creating thus economy, the into businesses new injecting of capable are students these graduation Upon actions. their of consequences the foresee and goals, purposeful and clear set term, long and short the anticipate interactions, multidisciplinary understand future, the influence to ability students’ about brings education Entrepreneurial responsible. environmentally and socially being while environment, and community, country, their developing to committed citizens responsible and active become to need they competencies the with students provide should it and environment, work the for people young training of goal its of account on role akey plays education entrepreneurial Therefore, workforce. and flexible specialized amore having for aneed entails This competitive. and productive more become to them forcing activities, their perform businesses way the also but communicating and living of way people’s only not transforming are challenges These development. urban and migration, population, world growing from pressure under albeit economy, ashared and chains value global of development the fostered have interdependence financial regional) and national, (local, and intelligence, artificial knowledge, scientific-technological resources, natural of depletion change, climate challenges: unprecedented of presence the by ischaracterized millennium new The Introduction Ph.D. Irene Alvarado Economics. Dr. Alvarado isaEARTH University Professor inEntrepreneurial Programs and Environmental 1

Entrepreneurial Education and Business Development Built into Training 1 breaks down barriers based on social class, age, gender, sexual orientation, and racial differences. Moreover, entrepreneurial hands-on experiences in teams give rise to collaborative work, respect, and tolerance, which build critical thinking, problem solving, and resolution of any conflicts that might arise. This paper reviews entrepreneurial education’s importance starting with a brief historical background and thoroughly introducing EARTH University’s Entrepreneurial Program, its relevant issues, and different achievements. It also includes examples of worldwide experiences based on this model, and reflects on lessons learned. Theoretical Background

Entrepreneurial Education has gone through various methodological approaches, from Ignatius of Loyola’s “Traditional Education”—characterized by a standardized teaching-learning process and the role of teachers as knowledge transmitters—to the current methodological approach based on the development of competencies under an inverted curricular model, where education focuses on learners, who become active builders of their own knowledge (Anses Munte, 2015). There is historical evidence of efforts made since the nineteenth century to train businessmen. It was not, however, until the seventies that education for entrepreneurship became typical of United States business schools, from which the model has been taken and implemented in other regions throughout the world (Shane, 2000; Jordan et al., 2014). Entrepreneurial Education and Training are formal academic education and training programs. While both are meant to develop entrepreneurs and entrepreneurial activities, they differ in terms of specific objectives. By and large, formal education tends to focus on gaining knowledge about entrepreneurship, whereas entrepreneurial training programs—usually conducted outside the formal education sector—are targeted on providing the skills required to start a business (Sherrard and Alvarado, 2017). Broadly speaking, two teaching approaches to entrepreneurial education can be identified: the Management Model, which focuses on the know-how to set planning, organization, and control goals in a small business (Winslow et al., 1999), and the Business Venture methodological approach emphasizing Alvarado, 2017). Alvarado, and (Sherrard concepts management basic to introduced being before implement should they idea abusiness choose and EARTH at education their beginning after right business a create to expected thus are Students work. will they where field the of reality the to related closely training a significant offers also approach This go. they as knowledge building for acontext provides which education, their of beginning very the from production of realities business and environmental, technical, social, the experience and live students that is model methodological “inverted” the of strength The 2017). Alvarado, and (Sherrard whole the of sight losing without but system, the of parts to attention more pay increasingly they studies their in advance they As University. the at days earlier their since environment their and people by played role the and system production afarm of complexity the with faced are Students management. resource natural and production agricultural of view holistic a underscoring and system whole the on focusing by starts EARTH at process the etc.), physics, chemistry, (biology, components system on focusing education their begin students where vision a reductionist on based curricula other unlike “inverted”, ismethodologically curriculum typical the EARTH, At management. business of aspects social and environmental, economic, technical, integrating by project business their on work students’ underpinning skills practical and theoretical both and knowledge the provide Modules activity. abusiness implement and develop to required tools the acquire they where modules learning in enrolling while business, agricultural a commercial starting and creating in involved actively are period, three-year a during students, where model educational University’s EARTH of block building isafundamental Program Entrepreneurial The Entrepreneurial Program EARTH University’s 2017). and Alvarado, Sherrard 2000; (Shane, knowledge of kind this gain to disciplines other from students for opportunities the limits which school, and/or Economics Management Business the within found are however, institutions, education higher by offered programs 2013). Gray, and Most (Rideout development plan business

Entrepreneurial Education and Business Development Built into Training 3 A critical feature of the Entrepreneurial Program is that students receive modules in such a way that the subject matter is relevant to the particular stage of their business project development. For instance, if a student is organizing her project with 4 or 6 classmates, the Planning and Business Organization theoretical model will address the different types of business organization (Sherrard and Alvarado, 2017). The program considers conveying knowledge through six 15-week modules including both theoretical and practical components. During this period of time, students and their teams should continuously (even during holidays) devise, plan, implement, market, and control their business venture, among other things, from the first through the third academic year. Figure 1 shows in detail the way the teaching process is carried out in three phases throughout the program and how the activities correspond to the learning modules: • Pre-operating phase • Operating phase • Evaluation phase.

First Year Second Year Third Year

Pre-operating operating Evaluation phase phase phase

Module 1. Module 3. Module 5. Introduction to Accounting Agribusiness Evaluation Agribusiness Financing ∙ Implementing the project ∙ Interest management ∙ Identifying ideas ∙ Accounting management Business ∙ Cash ﬂow presentation ∙ Team Building ∙ Work organization and Shutdown ∙ Accounting closure ∙ Analyzing ideas responsibilities

Module 2. Module 6. Module 4. Planning and Environmental Finance Organization Economics ∙ Management reports Final ∙ Developing business ∙ Environmental impact ∙ Conﬂict resolution defense ∙ plan assessment ∙ Follow up ∙ Submitting it to ∙ Economic inclusion of ∙ Audits Correction evaluating panel environmental impact

Rejection Approval Proﬁt sharing

Ongoing advisor support

Figure 1. EARTH’s Entrepreneurial Program implementation process report on inventories, balance sheets, income statements, statements, income sheets, balance inventories, on report a acronym) Spanish its for (OPE, Office Project Business the with file should they month Every plan. business approved the to according progress business as well as results, line bottom show to audits including procedures, control and records using system accounting an implement and develop to have will Accounting 3, Module during introduced are principles accounting phase, this At sustainable. more project make the to practices mitigation environmental of development and abatement, impact social and environmental management, resource resolution, conflict management, time teamwork, making, decision as skills such strengthen students letting to addition in context, life areal in concepts theoretical including for opportunity isan and implementation project around revolves phase operating project’s The idea. business their pitching students the by selected advisor external or in-house technical project’s the and business, of line asimilar performed, has or in, experience has who student fourth-year one assistant), one and members 4faculty of (made up team entrepreneurial the evaluated, be to activity the in involved businesspeople includes panel the Typically, completion. project at for paid be to labor with contribute turn in partners business and equivalent, currency local in is$6,000.00 financed be to amount maximum The capital. working for funded 100% idea their get to needed commitment and determination, skills, knowledge, the have they show must They apanel. before plans business their defend students quarter, third the of end the At uncertainty. of degree the assessing by analysis sensitivity and flow, cash costs, of concepts financial basic the includes module This activities. agribusiness their with line in charts organization and organization, business planning, of concepts practical and theoretical the covers which take to have also They plans. business developing for required issues cost and social, environmental, technical, and information marketing analyze and collect to procedures and tools, to Agribusiness, Introduction 1, Module complete students phase this During funding. with isprovided plan business the approved, Once implemented. be to project the defending and plans, business submitting and developing ideas, investment various researching team, business building the includes phase pre-operating The of the business, business, the of Organization and Planning 2, Module . Along with theoretical progress, students where they receive knowledge, knowledge, receive they where

Entrepreneurial Education and Business Development Built into Training 5 each partner’s worked hours, an analysis and interpretation of accounting report information, and on overall management of the business. Subsequently, students complete Module 4, Finance, where they learn how to apply tools for analyzing financial statements, making decisions on costs and profitability, assessing the value added created by the business, planning and forecasting future financial situations, managing the business cash flow, comparing planned versus actual performance, and disclosing likely positive or negative discrepancies. At the project’s evaluation phase, students evaluate their “business venture” and the experiences leading to the achieved outcomes, which requires carrying out an assessment and analysis of the project. To this end, they must take into consideration market, technical, environmental, social, administrative, financial, and personal aspects. During this phase, students complete Module 5, Agribusiness Evaluation, which covers such concepts as interest management, and inflation and devaluation impacts on cash flow. Various loan management and debt servicing approaches are studied, as well as financing method impacts. In Module 6, Environmental Economics, all projects must evaluate their environmental impact and its economic cost, bearing in mind relevant externalities, such as CO2 emissions, water footprint, and nitrogen footprint. The project must demonstrate the mitigation actions carried out on identified externalities, or else pay an environmental tax upon project settlement (15% of income). At this phase, the business team should cease commercial operations, honor their debts, and file a final report with an evaluating panel (having the same makeup as in the defense stage). This is a critical step because it provides the team with the opportunity of not only preparing and submitting a professional report on their project but also opening a space to reflect on and analyze lessons learned. Moreover, it is like a two-way bridge since freshmen students are invited to attend business closure presentations, which gives them an assortment of ideas and allows them to envision experiences they might face in developing their own entrepreneurial project. This is a key student-student knowledge transfer space. Net profits earned are divided among partners after repayment of the loan, production costs, interest payments, environmental taxes, and contribution to the Entrepreneurial Project office. Said contribution is used as revolving capital to offset losses curriculum map, and a multi-disciplinary nature. amulti-disciplinary and map, curriculum the in process inclusive an flexibility, implementation demonstrates which University, EARTH at followed model the and approaches model venture new institutions’ other between differences methodological Table 1 shows brief, In isawarded. grade apassing and losses financial the sustains program the crop), aflooded (e.g., God of act an to attributed is failure year. If academic last and fourth the during project the and implementing study feasibility a including full project new a develop must grade afailing getting Astudent grade. poor a receive they negligence, of account on failure the of reason the be to found are members team If causes. identify to made is assessment an figures), approved from 30% than higher discrepancies of presence the as isdefined (a failure evaluation during failure project of case In projects. non-profitable from entrepreneur an as identified is student The idea and its business the on focused environment alearning on Based students to barrier economic an is which loans, bank on Based incubator the from withdrawn be must venture the and penalized is Failure incubators Business promotion Enterprise business and economics of schools in found Entrepreneurship curriculum the in optional Entrepreneurship education is programs Entrepreneurship institutions with various at approach model Overall entrepreneurship entrepreneurship model approach and EARTH’s EARTH’s and approach model entrepreneurship Table 1. Table entrepreneurship model: Key elements Differences between the traditional between Differences herself as an as herself entrepreneur. or his identifies student The learning environment astudent-centered on Based students to barrier economic no is there capital, seed on Based analyzed are causes and process learning the of part is Failure drivers Business development enterprise Integrated curriculum agricultural the of part and an integral disciplinary Entrepreneurship is multi- built into curriculum the Entrepreneurship education is approach entrepreneurship University’s EARTH

Entrepreneurial Education and Business Development Built into Training 7 EARTH’s Model Implementation at Other Universities

It is worth noting that EARTH University’s Entrepreneurial Project Program has been implemented at other universities in both Africa and the Americas, tailored to each institution’s needs and requirements. In Africa, for instance, starting in 2000 EARTH University launched an agricultural education enhancement program supported by Salzburg Global Seminar, the MasterCard Foundation, and the Regional Universities Forum for Capacity Building in Agriculture (RUFORUM). Through this program both Egerton University in Kenya and Gulu University in Uganda have established entrepreneurship programs awarding the degree of Bachelor of Science in Agri-Entrepreneurship and Communication Management (Bsc.ACM) aimed at transforming African agricultural universities and their graduates into agents of change and effective communicators with practical and positive attitudes, capable of creating, promoting and developing profitable businesses, able to tackle the challenges facing the agricultural sector. The 4-year program at each university currently has about 110 undergraduate students. In turn, Universidad de Ciencias Comerciales (UCC) in León, Nicaragua, through EARTH graduate Juan de Dios Mairena and supported by EARTH’s cooperation agreement, launched the Entrepreneurship, Innovation, and Business Ideas Program (PDEIDE, for its Spanish acronym) in 2013. Since then some 1200 high school students (from 16 public and private schools) and 35 MSMEs have participated. As of 2017, it is leading the Micro- Commerce Center initiative (CDMC, for its Spanish acronym) that provides financing ($25,000) for 5 MSMEs selected on a competitive basis to receive advisory services from master’s program students at UCC and other higher education centers. namely: learned, been have lessons of aseries Program Entrepreneurial University’s EARTH implementing of 25 years the In environment. their in change positive of agents becoming while action, into ideas their turn to graduates future enable will that competencies knowledge and attitudes, aptitudes, developing is about It training. management business than more entails entrepreneurs educating Clearly, opportunities. creating and working for needed motivation and attitudes, skills, knowledge, the with change of agents train to approach model entrepreneurial innovative an devised has University EARTH world. developing the in economy global and sector agricultural the advancing for isapriority entrepreneurs Developing Concluding Reflection and Learned Lessons • • • – – At thefacilitator level – – At thestudent level – – At theinstitutional level students, theirdaily tasks, and theirfuture as professionals. preach because theiractions have asignificant impact on far beyond classrooms. Facilitators must practice what they Teachers for life; that is, our commitment to education goes promoting thespaces needed for learners’ decision making. to let live” the“business venture” by always providing and program but it is also about lettingstudents “learn to live and conveying knowledge through agood teaching-learning The key facilitator role not only consists of and imparting competencies, which are key elements of positive leadership. of emotional, social, personal, and communication Competent students; the model promotes thedevelopment environment. themselves as agents of change capable of influencing their allows for self-discovery of theirown capabilities, seeing Students become aware of theirown potential; themodel sectors. including various disciplines, as well as public and private community-based, and entrepreneurial networks are created, The program is strengthened to theextent collaborative, should beaninherent partof institutional culture. The program should bepartof theUniversity’s DNA;themodel

Entrepreneurial Education and Business Development Built into Training 9 – Facilitators believe in each individual’s potential; believing in students and the potential inherent in each one is essential. – Facilitators as entrepreneurs themselves; being an entrepreneur means entrepreneurial competencies require active teaching methods. They should take on the risk involved in this, since making mistakes is part of the process. • At the program level – Multidisciplinary approach involving a close collaboration between scholars from agricultural and social sciences, and other disciplines, that results in students developing leadership skills and knowledge in a holistic manner. Lastly, it is worth highlighting that, in general, the program should not only be evaluated in terms of economic issues, as suggested by the planned behavior theory (Krueger and Carsrud, 1993). People’s attitudes prompting them to become entrepreneurs are deeply related to a series of subjective norms. The more positive attitudes and actions are, the stronger the intention to exhibit entrepreneurial behavior. The EARTH entrepreneurial program has managed to develop, promote, and actively strengthen the performance of several competencies to train agents of change capable of facing challenges in their environment. References

Anses Munte, A. (2015). El modelo de aprendizaje invertido como herramienta innovadora en la asignatura de Empresas e Iniciativa Emprendedora de la Formación Profesional. Universidad Internacional. Retrieved from: https://reunir.unir.net/bitstream/handle/123456789/2971/ Maria_Asens_Munt%C3%A9.pdf?sequence=1&isAllowed=y Egerton University (2018). Bachelor of entrepreneurship and small business management. Retrieved from: http://www.egerton.ac.ke/index.php/copy-of-faculty-of-commerce/ bachelor-of-entrepreneurship-and-small-business-management.html Gulu University (2018). Bachelor of Science in Agri- entrepreneurship and Communication Management (BSc. ACM). Rofurum. Retrieved from: http://fae.gu.ac.ug/wp-content/ uploads/2018/04/Bachelor-of-Science-in-Agri-Entreprenuership-and- Communication-Management.pdf USASBE conference. USASBE 1999 the at presented Paper Education. Entrepreneurial of Survey National 1997 the of results Some States: United the in education entrepreneurship into investigation (1999) Empirical A. Tarabishy, G., Soloman, E., Winslow, 2017: -June 2(2): Vol. April pp.153-160. Development. Rural of Journal African Approach. University EARTH The Agriculture: in Education (2017) I. Entrepreneurship Alvarado, D., Sherrard, 217-226. 25, I, Vol. No. 2000, Review Management of Academy research. of afield as entrepreneurship of promise The (2000). S. Shane, Hall. Prentice Pearson NJ: River, Saddle Upper Edition. 8th M(2005). Management Coulter, S., Robbins, 51 (3):Management 329-351. Business Small of Journal education. entrepreneurship university-based the of effects the on literature empirical the of critique methodological and Areview work? really education D. (2013). entrepreneurship Gray, Does E., Rideout, spanish.pdf http://www.un.org/es/millenniumgoals/pdf/2015/mdg-report- from: 2015. de Retrieved Informe Milenio del Desarrollo de (2015). Unidas Objetivos Naciones Emprendedurismo_Innovaci%C3%B3n_y_Desarrollo_Empresarial https://www.academia.edu/10246088/ from: Retrieved Nicaragua. León, Comerciales, Ciencias de Universidad empresarial. einnovación emprendimiento de (2018). J. Programa Mairena, pdf?sequence=1 handle/2263/40586/Rusteberg_Entrepreneurial_2013. https://repository.up.ac.za/bitstream/ from: Retrieved 1993. 5(4):315-330 behavior. planned of theory the Applying intentions: (1993). Entrepreneurial A. Carsrud, N., Kruegerm, UK Publishing, Scholars Cambridge Resilience. and Impact Towards (Eds.). A. Stroebel, and Z. F., 397- pp. In: Ofir, 428. Swanepoel, education. agricultural in entrepreneurship and (2014). Taylor, G. J., Innovation Jordaan,

Programa_ · October October 2015_ 11 Entrepreneurial Education and Business Development Built into Training For further information, please contact: Dr. James B. French, American University of Beirut, Project Director, [email protected] Dr. Roula Bachour, American University of Beirut, Project Manager, [email protected]