Education Needs to Factor in Entrepreneurship.

Nearly every debate about the “value” of a college degree is based on two questions: “Is college worth it?” and “Does someone with a degree earn more than someone without one?” Both of these questions come up year after year as headline fodder despite the fact that at a macro level, the answer to both of them is an unequivocal yes.

Unfortunately, both questions frame the debate as if America’s jobs and income will automatically rebound, regardless of our interdependence on a global economy and the increasingly fast pace of technological change. There’s a third question we must ask instead, and it’s one with far more long-term importance to the economy: “Do college degrees adequately teach value creation?”

The answer, sadly, is largely no.

Value creation doesn’t mean creating individual wealth for our grads; it means empowering our grads with the know-how to innovate, create jobs and contribute to long-term economic growth. And who creates more value than entrepreneurs?

Although the mindset of young people is shifting toward a more entrepreneurial way of thinking, our education system is lagging behind. According to the annual 2014 Youth Entrepreneurship Study conducted by YEC and Buzz Marketing Group, 81 percent of non-self-employed individuals believe they will be a business owner or self-employed at some point because of the new economy. Eighty-seven percent of young people want to pursue entrepreneurship. Nevertheless, 62 percent weren’t offered any entrepreneurship classes in college at all — and of those that were, 62 percent deemed them inadequate.

At the same time, entrepreneurship in the U.S. is declining steadily; despite the increase in hype around entrepreneurship, the actual firm entry rate (businesses less than a year old as a share of all businesses) fell by half between 1978 and 2011.  This must change.

Here are some strategic ways to ensure that a four-year college education is most certainly “worth it” for the next generation of leaders:

Start preparing young people for success before they start college. Understanding value creation doesn’t start on day one of college. It starts with the K-12 system. To that end, we must help more of the youngest Americans access programs like Junior Achievement and Network for Teaching Entrepreneurship (NFTE).

By providing experiential learning in financial literacy, entrepreneurship, and work readiness, these programs train young people to apply the “hard” skills learned in K-12 to real-world problems, preparing them to recognize opportunity in work of all kinds. Such programs also increase the rate of business creation; according to one NFTE study, 36 percent of their grads actually started businesses, compared to 9 percent of the control group.

Once students are in college, we must equip them with the skills they need. Namely:  Create real dialogue between universities and business leaders. Universities and colleges could bring in business leaders to create apprenticeship and internship opportunities, mentor students, and provide clear pathways for graduates of all degree programs to both find work and make an impact on their communities.

Bringing entrepreneurs in to help design curricula or mentor current college students, especially those earning MBAs or undergraduate business degrees, would provide the training they need to solve real, current problems through companies of their own. Babson’s hands-on entrepreneurship curriculum would be a good model for other colleges to look at.
Rethink the “core curriculum” to meet actual business needs. Thirty-seven percent of the YEC/Buzz survey respondents said that, if they found themselves unemployed, they would try to start a business or freelance — versus the 19 percent who would go back to school or the 21 percent who would take any job they could find.

However, if we don’t teach young people how to freelance or start a business in college — not because they necessarily want to, but because they might have to — then we are not doing our job. No matter the major, every degree program should include experiential learning so that grads are able to apply their learning to the increasingly high-tech, fast-paced world we live in.

To do so, educational leaders must start consulting with the people actually creating jobs when designing core curricula. Partnerships can speed up that process; companies like IBM are partnering with schools (again, Babson among them) to develop curricula that blends business training with the IT skills U.S. companies will need in the next decade.

Onboard more grads into startups. Getting practical experience in a small business or start-up setting is an invaluable experience for students, whether they plan to start a business or simply need to nourish the kind of 21st-century skills (team-building, leadership, entrepreneurial thinking) employers today value highly.

And yet, year after year, many of our top-tier grads continue to end up in the same three sectors: finance, consulting and law.  But it’s not for lack of interest — even though an astounding 88 percent of Millennials want to work for a startup, most startups have neither the cash nor the bandwidth to recruit at top schools and compete against major corporations for talent. Organizations like Venture for America provide a roadmap for onboarding America’s best and brightest into the startup world. Plus, VFA plugs its trainees into cities sorely in need of economic revival and capable talent (Baltimore, Las Vegas, Detroit, and others) — creating value locally while also preparing young people to create their own business opportunities.

Creating value can’t just be about one person’s individual learning or one person’s paycheck. Rather, a degree must also be about equipping a generation of highly educated and capable individuals to contribute to building a better, more sustainable economy — so that they can someday help create the tens or hundreds of thousands of jobs America needs to keep moving forward. That is the real value colleges must unleash in order to truly be “worth it.”