Canadian MBA students are increasingly shunning the traditional finance route in favour of entrepreneurship.
With the economy still in rough shape and many companies keeping their ranks at status quo or shedding employees, a future in financial services isn’t always paying dividends the way it once did, says David Simpson, executive director of the Business Families Centre and a professor of entrepreneurship at the University of Western Ontario’s Ivey Business School in London, Ont.
Maybe it’s the Dragon’s Den effect, or perhaps students are just seeing the reality of the job market, but entrepreneurship has never been more sexy or enticing – for at least a growing minority.
At the University of Victoria, 15 per cent of students in the MBA stream are enrolled in entrepreneurial courses now, up from 5 per cent in the past decade, says Brock Smith, a professor of entrepreneurship at the Peter B. Gustavson School of Business. And it’s the same in the undergraduate business program where interest in entrepreneurial courses has doubled in the past five years.
Even if they don’t want to run a business, students are realizing the importance of these courses, as larger companies are looking for innovators to build their stagnant business. “Having that entrepreneurship background gets you into that innovative mindset and even big corporations are looking for that these days,” Dr. Smith says.
There is a similar trend in the United States. According to numbers from Stanford University’s employment report, for example, 18 per cent of MBA graduates from its 2013 cohort became entrepreneurs, up 13 per cent from the cohort of 2012. That figure sat at just 5 per cent in the 1990s.
“Tough times are the mother of invention,” Prof. Simpson says. “If you’re not getting hired, people are more inclined to take that risk and become an entrepreneur. “Entrepreneurship has never been cheaper with there being an app for everything and it’s never been easier to solicit feedback over social media and do website development.”
When Prof. Simpson did his MBA at Ivey about 25 years ago, he says, the school offered just one course in entrepreneurship.
But Canadian universities are adapting their curriculum with the increased demand. At Ivey, the New Venture Project is an entrepreneurial field project that takes students through the process of developing a business plan and presenting a pitch to a panel of investors.
“When we first started it, I was like, ‘Where is my class time for this?’ It was almost like secret meetings,” Prof. Simpson says. “Now the New Venture Project has been really embraced by the business school.”
Aidin Tavakkol, a 33-year-old who is completing his final project for the MBA program at UVic, says he always knew he wanted to become an entrepreneur. “The program gave me a really good foundation for starting my own business from scratch,” he says.
He recently launched a software service company in Victoria called LimeSpot and said he appreciates being able to tap into the network of professors and connections he has made at the business school for trouble-shooting. “This is so much better than doing it the trial-and-error way.”
The two streams of finance and entrepreneurship mean students graduate with a distinctive set of skills, Dr. Smith of UVic says. “The finance-oriented MBA is more analytical, understanding spreadsheets and stock simulations,” he says. “It’s the yin-to-the-yang with entrepreneurship courses that focus a lot more on building and inspiring teams, writing business plans and growth.”
As Sarah Landstreet found out, to her delight.
The 29-year-old Canadian had a cupcake bakery business in Northern Ireland but was “pursuing it blindly.” When she returned home to London, Ont., she was thrilled to find an MBA program at Ivey that was geared toward entrepreneurship. “It blew me away that there was this greater body of knowledge that I could learn from,” she says.
Ms. Landstreet says she hadn’t ruled out traditional finance when she first enrolled in the MBA program, but her studies confirmed her realization that she should continue down the entrepreneur path.
“In a class of 150, there were maybe 15 or 20 people who really wanted to start their own business,” she says, acknowledging entrepreneurship is still a fringe choice even if its popularity is growing. “And maybe another five who were actually entrepreneurs … so yeah, it’s still a weird thing.”
Since graduating, Ms. Landstreet has been running her own small business, Georgette Packaging, but says not many of her classmates at Ivey had the same interest.
“I remember people in my program asking me if I had lined up a job yet, and I had to say, ‘No, I really wasn’t kidding about starting my own business,’” she says. “It’s almost more of a personality thing rather than a decision based on which one is more likely to make me money.”
Prof. Simpson says about 20 per cent of Ivey graduates identify themselves as entrepreneurs, but the school needs to do a better job of collecting information on whether students start their own business as soon as they graduate or become entrepreneurs later in their careers.