Thursday, May 18, 2006

Entrepreneurship Education

Yesterday I met with Steve Mariotti, a former high school teacher (and business executive) who founded and runs the National Foundation for Teaching Entrepreneurship. NFTE's offices are located on Wall Street. Indeed, much of the backing comes from banks and investment firms. Most of NFTE's main work, however, is done in low-income high schools across the country, and in low income communities around the world.

Basically, students take a course in entrepreneurship that uses a text book called How to Start and Operate a Small Business. Kids learn about profits and losses, calculating rates of return, writing business and marketing plans, dealing with customers and all those things. Many of the schools that use the curriculum have students start a (very low capital) business and ask them to try running it for part of the course's duration.

Mariotti came up with this idea when he noticed that his students at his South Bronx high school were not interested in many academic things, but they were interested in money (aren't we all?) Specifically, they were interested in ways of making money. Many had a street-smarts sense of marketing, and they enjoyed hearing about Mariotti's experience running an import-export company. I'll back up there for a second -- Mariotti started his career at Ford, started an import-export business, then was mugged in the early 1980's by a group of New York City kids. They shoved him around a bit when they realized he had only $10 in his wallet at the time. Shaken by the whole experience, he decided to confront his fears and try to change a few kids' lives by becoming a teacher. Thus his job in the South Bronx, and thus the eventual founding of NFTE.

The Harvard Graduate School of Education has done some research on NFTE's programs in Boston's schools. The results are fascinating. Only a small percentage of the children who take the high school course in entrepreneurship actually continue running small businesses. Many realize it's a far tougher job than working for someone else!

But low-income students who study entrepreneurship for a year do experience a 32% increase in their level of interest in college. A control group of Boston students experienced a 17% drop during that same period. Students who studied entrepreneurship showed an increase in time spent reading independently; students who didn't spent less time reading on their own. A follow up study found that NFTE students scored about five times higher than the control group on a scale measuring something called "locus of control." That's a fancy way of saying how in control of your own life you feel. People with high scores believe that they can change things in their lives and make things happen that they wish to see happen.

That last finding is pretty exciting. Those of you who've read Stephen Covey's Seven Habits of Highly Effective People know that this locus of control (called "Be Pro-active" in 7 Habits) is the first habit. People who take control of their lives achieve far more than people who don't. That teenagers who've no doubt suffered a lot of discrimination, deprivation and other things can learn to see themselves as the architects of their own existence is cool, to say the least.

The more I've been thinking about the curriculum, the more I've been thinking that parents of gifted kids can adapt some elements for their own children's education. Learning how to run a business requires a kid to draw together information from vastly different areas. Rather than learn something because the text book says he should learn it, he learns it because he figures out that he needs to know it. He does this on his own (and hence increases that locus of control measurement).

Certainly running a business ropes in the 3 R's -- reading marketing literature, writing a business plan or letters to advertisers or literature for customers, using arithmetic to calculate unit costs and profits. And it's also very practical. Interviewing the lady who runs the beauty parlor down the street connects you with the real world in a way that very little in school does.

So parents looking to turn their kids on to a challenging project might try this for the summer. Brainstorm business concepts and, if you're able, provide some small amount of start-up capital (ie, $20 to make post cards about a dog-walking business to distribute to neighbors). Check out several books on starting a business from the library, and have your child make reports on the business's progress (i.e. to you, the main investor). Who knows, at the end of the summer, he might decide to continue. But even if not, he'll have learned some interesting lessons about money, budgeting, and taking control of his education.


Anonymous said...

Hi, Laura--just dropped in to suggest that gifted kids at the upper end of the continuum would do well to get a good education in entrepreneurship because it can be very tricky for a super bright, super creative adult to work for someone else or find his or her place in a corporate structure. This is advice I often give to parents of pg kids--I'm awfully glad to learn of this program! Thanks. Stephanie Tolan

Anonymous said...

Lots of PG adults find their way into academia, where quirky thinking and high intelligence are rewarded. Though the financial rewards are not as great as in the corporate world, the appreciation of quirky thought is much higher.

There are some constraints (being able to teach at least at an adequate level and being able to write up results and get them published), but it isn't necssary to create the jobs from scratch.

Laura Vanderkam said...

Hi Anonymous 2: Academia is great...when it works. Unfortunately, the stats on PhDs granted vs. tenure-track positions gained is pretty bad these days, much worse than 10-20 years ago. Lifetime employment is dying out in most other places in the economy, so it's no surprise that universities are wary of entering life-long financial commitments. Net result being that making it in academia requires a lot of attention to hierarchy, studying the "in" subjects, networking at conferences and otherwise doing things that start to resemble working in a big company. For those who do land the holy grail of academia -- tenure at a big university studying exactly what they want -- academia is about as good as it gets for the PG type. Unfortunately, getting there requires a lot of working for someone else in big name profs' research labs, programs, etc.