Thoughts on Entrepreneurial Education

In December, I will complete the required coursework and earn a master’s degree from Western Carolina University’s Master of Innovation Leadership and Entrepreneurship program. Over the course my graduate work I have been asked many times if a master’s degree is worth the money if I really needed a master’s degree to be an entrepreneur, what prompted me to continue my education, and why I chose a Master of Entrepreneurship degree over an MBA.

As I wind down the program, I wanted to share my perspectives on these questions and offer other thoughts on entrepreneurial education.

My motivation for pursuing a graduate degree.

When I started the program in January 2017, my primary purpose was to earn the credentials to teach courses as an adjunct in higher education. My goal was to teach the basics of licensing and intellectual property protection to those students, like my summer interns from Savannah College of Art and Design (SCAD), who were on a path to creative careers but seemed to have little knowledge and understanding of licensing options for generating revenue and the importance of aggressively protecting their creations.

It was apparent to me that those with aspirations for careers in the creative arts are missing education in the fundamentals of business necessary to support themselves in those careers. I saw this not only in my student interns but also in my interactions with working artists and creators some of whom have been out of school for many years. I wanted to teach students how to establish a better business foundation for extracting long-term value from their future creative careers.

Two years later, my desire remains fundamentally the same; however, my vision is different. The coursework for the master’s program led me to think more broadly. We live in a world where corporate loyalty to employees is virtually nonexistent, and many individuals are pursuing entrepreneurial endeavors—some out of desire, others out of necessity. Moreover, the Internet enables everyone who wants to start a business, a way to find an audience, sell a product or service, and facilitate the delivery of the creation—whether its artwork, a book of ideas, a piece of furniture, or a service.

Most of us, though, are educated and trained to work for others. Very few of us understand how to be self-employed, or have the basic understanding of how to build a business that employs others. This lack entrepreneurial education and training must change, or the long-term impact is potentially devastating to the economy and the culture.

At the end of my program, I still see the significance of helping students extract long-term value from their future creative careers, but I now understand the necessity and importance of embedding entrepreneurial thinking and approaches in our post-industrial culture. I want to be a part of preparing future generations to think differently, to help them develop skills to identify opportunities and to teach them the building blocks that create products and services on which viable businesses can be built and thrive.

Why Master of Entrepreneurship (ME) instead of an MBA?

I chose the Master of Entrepreneurship program because I liked the idea of exploring the foundational theories for business management within the context of innovation leadership and entrepreneurial action.  Plus, I already hold a Bachelor of Business Administration, and I have significant hands-on experience in running and managing businesses, which is a core component of an MBA program. I found little additional value for earning a master’s degree in the same discipline.

While I suspect the curriculum may differ from university to university, I believe, based on my research and experience, the MBA curriculum primarily prepares students to run and manage the businesses of others, whereas graduate curriculum in entrepreneurship teaches students to identify and develop opportunities that can grow into businesses. While there may be some similarities in the ME and MBA programs, the business focus is often different. The curriculum differences would also seem to suggest some variances in the level of risk tolerance between graduates of the two programs, with the MBA leaning more toward risk avoidance and the ME leaning more toward risk acceptance.

A high level of risk tolerance is essential for innovation and is the cornerstone of most entrepreneurial education. Let me be clear: I am not saying MBAs cannot innovate—many do—although the curriculum for MBA programs and my experience with many MBA-trained executives in my career would suggest the educational foundation stresses an over-reliance on existing data and information in decision-making. Innovation stems from chasing the unknown, which is hard to do when there’s no hard data to support the chosen direction. Entrepreneurs know this, and a graduate level education in entrepreneurship soundly reinforces the concept of decision-making under uncertainty. For me, such a curriculum provided greater support and balance for my tendencies toward research and data.

Contrary to what some might think, a Master of Entrepreneurship degree doesn’t just teach you to start your own business—you don’t need a graduate degree, or any degree, to be an entrepreneur, but some entrepreneurial education does help your long-term success rate. Many, including the degree program in which I participated, teach entrepreneurial concepts applicable to existing organizations as well as startups. By focusing on those skills necessary to identify and drive innovation, a Master of Entrepreneurship degree provides a foundation that students can deploy for the benefit of any organization—from their own startup, to small businesses, to large corporations, third-sector organizations, nonprofit organizations, and everything in between.

As with many decisions of this nature, there’s no right or wrong answer. The choice depends on personality, background, experience, personal goals, and aspirations. There are indeed many individuals with an MBA who are successful entrepreneurs. The MBA-path was not the path for me.

Is a master’s degree worth it?

For me, this Master of Entrepreneurship degree is worth the time and expense because it helps to put in motion my future goals. My payback period should be short, I have learned a few new things, met some great people and earned a necessary credential for the next step in my career path.

Lifelong learning is important to me and the Master of Entrepreneurship degree demonstrates my commitment to that concept. I didn’t pursue a graduate degree at this stage in my life with hopes of increasing my earning potential significantly. I chose the degree to update my foundational knowledge and to learn new techniques and approaches to business and entrepreneurship upon which I can form new insights and, hopefully, contribute knowledge to future generations.

Of course, everyone must weigh the pros and cons of a graduate degree themselves. In some fields I would imagine it’s worth the time and expense; in others, perhaps not as much. I do think many hiring managers consider a master’s degree to signify a certain level of knowledge and commitment that a bachelor’s degree once suggested.

My commitment.

There are too many entrepreneurs who, whether by choice or necessity, are flying by the seat of their pants, throwing things against the wall and hoping it will stick. I know, because I've been one of them and I have worked with many others. What I have learned through experience and formal entrepreneurial education is there is not a magic formula that will breed successful ventures, but there is a framework for innovation leadership that will improve the chances of entrepreneurial success. And it's time to give back.

I value the power and impact of entrepreneurial activity on the broader economy, yet my greater interest is in entrepreneurship as a solution for unemployment and economic growth in distressed communities. More specifically, I have interest in those communities where changing demographics, cultural and societal shifts, corporate closures, and access to education create barriers to employment and economic growth, and how to spur innovation and entrepreneurial activity to break down these barriers.

To this end, I rebooted my strategy consulting practice earlier this year, and I have incorporated a coaching component for startup founders and entrepreneurs as my first step in giving back. I am also looking for opportunities within academia as well as select organizations where I believe I can leverage my education, experience, skills, and abilities for the next generation.

Finally, I am exploring doctoral programs so that I might continue researching, working, and teaching how innovation leadership and successful entrepreneurial activity can be a positive force in cultural change.

If I can be of any assistance to you in your pursuit of entrepreneurial activity, please don’t hesitate to reach out.

 

David Harkins is a business strategist, speaker, and teacher.

He is the founder and executive consultant at David Harkins Company. In his spare time, he writes hikes, explores, and creates art. Although, not necessarily in that order.

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Made in America: Still viable for apparel manufacturing?

Does “Made in America” really matter? Are Americans too price conscious, or too financially strapped, to support American made apparel?

In the mid-1950’s America began the transition from an industrial society, where the majority of the jobs were manufacturing-based, to a post-industrial society, where more than half of the available jobs were service-based. In just two generations, large-scale, labor-intensive manufacturing industries, such as the apparel industry, have all but vanished from the United States. The exodus of the apparel industry was fueled in part by higher labor costs, the rising cost of operations, and the natural evolution of American society and culture. Large-scale consumer apparel manufacturing may no longer a viable industry in the United States using current manufacturing techniques.

Textile and apparel production, while labor intensive, is a relatively easy industry for emerging countries to develop due to the low cost of labor and raw materials, and the profitability of finished, exported goods (Bair). As countries grow and evolve, so do the economic basis of their societies and the transition of the manufacturing base from one country to another is not only necessary for the economies of nations to grow but, also a critical and long-established factor in globalization. The most efficient way for emerging economies to move from an agricultural society to an industrial society is by leveraging their most abundant resource, human labor. Labor-rich countries such as China, Indonesia, Vietnam, India, are now “producing countries,” not unlike America was in the late 1700’s when entrepreneur Samuel Slater built the first textile mill to manufacture raw textiles and finished products that were exported to England and other countries.

After World War II, the booming manufacturing sector led Americans to become comfortable with the concept of “The American Dream,” a term first used by James Truslow Adams in his 1931 book, The Epic of America. In this book, Truslow put forth the idea that all Americans could collectively achieve a better life if their aspirations were similar (Adams). Achieving this “American Dream,” or some version of it, became the goal of the factory workers in the 1940’s and 1950’s and ultimately the children of those workers, a generation now known as the “Baby Boomers.”  When Baby Boomers came of age, America was beginning to transition from an industrial to a postindustrial society, and service-sector industries offered more higher-paying desk jobs as opposed to similar wages achieved through hands-on, skilled labor. (O’ Neill). The Baby Boom generation’s “greed” is often thought to be a primary force behind the dismantling of the manufacturing base in America. However, it is more likely Americans placed greater financial value on knowledge-based “white collar” work than on skill-based “blue color” work beginning in the 1950’s, and this became the catalyst for America’s evolution from primarily a producing country to a vast consuming nation.

In the producing-consuming transition, production work may be devalued—deemed menial—by the broader society, thereby making it difficult for factory workers to achieve a livable wage. This is especially true in the apparel industry where only two factors create a competitive advantage for manufacturers: lower cost, or greater product and service differentiation (McCann). Many companies deploy both strategies, simultaneously using knowledge workers in developing countries to create distinction and then manufacture products in producing countries where the cost of labor and production is significantly lower.

Maintaining a competitive advantage through lower labor costs is the critical challenge of American apparel industry. The United States Department of Labor, Bureau of Labor Statistics reports that textile manufacturing employment has dropped 625%, from 938,600 workers in January 1990 to 150,100 at year-end 2011 (United States Department of Labor). While some workforce reduction could be due to changes in trade regulations as politicians and trade industry analysts suggest, the apparent migration of manufacturing jobs is more likely the ordinary, and should perhaps be expected, the outcome of societal transitions from a manufacturing economy to a service- or knowledge-based economy.

Although many apparel manufacturers send production abroad, Los Angeles, California company, American Apparel, has thus far been successful in producing products entirely within the United States. Rather than design, develop and market products internally, then send production offshore, the company claims to employ a process called, “vertical integration,” that has “consolidated all stages of production under one roof at [their] downtown Los Angeles factor…” (Adachi).  This consolidation of functions certainly reduces transportation costs, one of the most significant costs associated with offshore production, yet it does not solve the root problem of apparel manufacturing—the manual process of cutting and assembly that requires skilled human labor.

The cost of labor in the apparel industry is nearly three times that of other sectors (Adachi) and as demand increases, so do the costs associated with production.  Unlike other sectors that may achieve cost reductions from the economies of scale resulting from increased volume, apparel companies cannot substantially improve the garment finishing processes and procedures with technological advancements. Instead, companies, such as American Apparel, must hire additional workers. These extra workers may require larger facilities and investments in equipment, which in turn could raise fixed costs that may, or may not, be recoupable through the sale of finished products.

American Apparel and other niche apparel manufacturers in the United States have demonstrated some American consumers will pay a premium for domestically made apparel.  However, the vertical integration model used by many of these firms is not scalable given the cost factor of labor in the production equation and therefore limits price elasticity of the products produced under this model.  While consumers may endure modest cost increases for American-made apparel, there is a not-yet-established point where the value of the “Made in America” selling proposition will be sufficient to sustain the price of the product at any level. Unfortunately, economic factors will undoubtedly force consumers to look for lower priced alternatives for one of life’s necessities, clothing.  Large-scale consumer apparel manufacturing might only become a viable industry in the United States again if technological advancements can directly reduce the labor costs of production, or if American workers are willing to explore alternative compensation models, including those tied to consumer product consumption, rather than to product production.

References

Adachi, Dean Ryuta and Lo, Valerie. “Made in Chinatown.” Chinese America: History & Perspectives (2008): 51-59. Web. 30 October 2012.

Adams, James Truslow. The Epic Of America. Sky Harbor: Simon Publications, 2001. Book.

Bair, Jennifer and Gereffi, Gary. “Upgrading, Uneven Development, And Jobs In The North American Apparel Industry.” Global Networks 3.2 (2003): 143-169. Web. 29 October 2012.

McCann, Jack. “China’s Textile And Apparel Industry And The Global Market: Five Competitive Forces.” SAM Advanced Management Journal Winter 2011 (2011): 33-42. Web. 27 October 2012.

O’ Neill, Dave M. “We’re Not Losing Our Industrial Base.” Challenge (1987): 19-25. Web. 27 October 2012.

The United States Department of Labor. Employment, Hours, and Earnings from the Current Employment Statistics survey (National). Extracted: 31 October 2012. Web. 31 October 2012. <http://data.bls.gov/pdq/SurveyOutputServlet>.

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Featured Image Source: Wisconsin Technical Colleges Image 81739

David Harkins is a business strategist, speaker, and teacher.

He is the founder and executive consultant at David Harkins Company. In his spare time, he writes hikes, explores, and creates art. Although, not necessarily in that order.

Connect with him on social media below: