Entrepreneurship alone can provide a sustainable business model, says U.S. expert

The relevance of Western model of education, though an extensively debated subject, is all set to come to India sooner than later. But the need for reorienting the curriculum of business schools has been stressed by none other than a U.S. business intellectual.

In a candid expression of his disenchantment with the business schools' stress only on managerial skills, he cautions India not to fall into the “MBA syndrome” and wants institutions to lay ample stress on entrepreneurship in the curriculum. India's goal of creating a million jobs a year can be achieved only if entrepreneurship becomes an quintessential content of the curriculum, if not a separate centre for giving lessons in entrepreneurial practices.

Such a centre could draw resources from entrepreneurs and academics to provide an exposure in the subject that can bring a refreshing change in enterprises, which predominantly give stress to managerial skill, says Larry C. Farrell, Founder-Chairman of The Farrell Company, a research and training organisation in entrepreneurial practices.

Crucial element

Interestingly, Mr. Farrell himself is a graduate from the Harvard Business School and yet believes it is entrepreneurship that can provide a sustainable business model. A prerequisite for an entrepreneur is the knowledge in technical skills while managerial aptitude would complement his ability to charter high growth strategies, he says.

Though the September 2008 crisis is behind us, it is troubled times like these when good entrepreneurs sprout as the environment in large corporations seldom helps managers to test their entrepreneurial talent. “Despite the recession or perhaps because of it, we continue to find strong global interest in entrepreneur development,” Mr. Farrell said.

Lack of incentives

Citing his own example as an executive of a leading banking institution in his early days to illustrate the lack of incentive for entrepreneurial instinct in big companies, Mr. Farrell told business school students and members of the Bangalore Chamber of Industry and Commerce recently said that his monthly salary was no barometer for his initiative or the lack of it.

He felt India should avoid over-dependence on MBAs to run its businesses. Instead, it should pave way for building an entrepreneurial economy, which was critical to meet its goal of achieving economic prosperity through large employment generation. It is the entrepreneur, he says, who can produce a steady stream of new products and services in a competitive manner that the world needs and build a sustainable business.

For an entrepreneurial economy, Mr. Farrell has been advocating breaking big businesses into small units as he believes that only small units nurture entrepreneurship and generate a large number of good jobs that can provide long-term sustainability for a business.

Farrell said that in the U.S., entrepreneurship is taught only as an extension of marketing and by the same academics. So, he adds, a re-look into the business schools' curriculum to lay equal stress on entrepreneurship and a link with a technical school is an important part of entrepreneurial education.

Citing Steve Jobs, who had said “Managing is the easy part. Inventing the world's next generation product is what is hard,” Mr. Farrell said entrepreneurs should be given the status of role models, not “thieves or criminals who are out to become rich.”

Recipe for disaster

As large corporations held little hope for young managers to imbibe entrepreneurial instincts, educational institutions played a critical role in defining contours of entrepreneurial practices. From his research, he found that in large companies entrepreneurship played a dominant role only at the start-up and high growth stages and as they grew larger, the spirit started waning. Entrepreneurs and the team responsible for the company's growth do not usually replace themselves with another set of entrepreneurs but with managers or MBAs. “Big companies run by MBAs are a recipe for disaster.”

Though a large number of U.S. business schools have started teaching entrepreneurship, it still carries the flavour of marketing and management. All should follow the norm of MIT (Massachusetts Institute of Technology) which admits students only if they had an invention or prototype or a good idea for pursuing their course.

Mr. Farrell is happy that women entrepreneurs have started emerging, to inspire young girls to play an important role in the economy.