Back to Index96
Order hard copy editions of Frontiers of Entrepreneurship Research by mail
AN EMPIRICAL ASSESSMENT OF THE RETURNS TO INVESTMENT IN ENTREPRENEURIAL EDUCATION
L. Murray Gillin
Alison L. Dews
W. Ed. McMullan*
Centre for Innovation and Enterprise Pty Ltd
PO Box 67B
Melbourne, Victoria 3000 Australia
*University of Calgary, Canada
Telephone/Fax: + 61 3 '14 8282 / + 61 3 9818 3657
The identification and quantification of the public and private economic returns to an investment of time and money by the classes of '93, '94 and '95 who undertook one of the entrepreneurial education programs of the Centre for Innovation and Enterprise Pty Ltd - a joint venture between Ernst & Young and Swinburne University of Technology and the entrepreneurial MBA program from the University of Calgary, Canada. The outcomes for each of the classes were measured and compared with outcomes from a Calgary traditional MBA class of '92 and an Australian traditional MBA class of '94 and for one of the Centre's entrepreneurial education programs delivered "in-house" to 20 staff of a major service company. Overall outcomes were examined by type of business venture, new jobs created, achieved sales, export sales and number of new products or services. The skills and knowledge transferred during the entrepreneurship education process were assessed.
A questionnaire was mailed to all graduates of the classes of '93, '94 and '95 and current students in the Centre's entrepreneurship and innovation programs and to the class of '94 in an Australian traditional MBA program. This MBA program was offered by a major Australian university, contained no compulsory entrepreneurial courses and the students were of a similar socio-economic background to the Centre's students. In the case of the Calgary programs the graduates were surveyed by telephone some 8 months after the expected time of graduation. Two measures associated with wealth-creation were used to determine the returns to investment in entrepreneurial education: (1) a series of financial outcomes as a direct result of the knowledge and/or skills acquired from the teaching programs and used to create new business activities, and (2) career performance and satisfaction.
87% of all graduates and students who participated in the Swinburne entrepreneurial and innovation educational programs contributed to new wealth-creation activities as a direct result of the knowledge and skills acquired in the programs. Activities ranged from 25 new start-up businesses to 55 innovative projects in existing businesses. Some 8% of all new sales identified from these activities came from export earnings. The average rates of sales income generated per wealth-creating graduate and based on new innovative activities was approximately A$0.6 million. For every A$1 of the Centre's entrepreneurial program costs, the graduate generated A$16 in new or additional wealth creating sales in an average of one year and six months from graduation. Of direct benefit to the community is the return on investment of educational dollars through job creation. For the 236 new jobs identified, the cost per job created was $7,000 - a low cost compared with most government job-creation programs. Amongst the graduates from the enterprise education programs, 30% gained their current position as a direct result of the learning in the program and 47% changed career direction with heightened levels of satisfaction. Overall,87% agreed or strongly agreed that the program gave them courage and ability to develop new areas in their work, and 82% agreed or strongly agreed that the program had helped them to apply theoretical concepts to the "real world". In the Calgary program 37% of graduates from the entrepreneurial MBA contributed to new wealth creation activities with 13 involved in new start-ups.
The discussion includes an attempt to assess the contribution of entrepreneurial education to economic development and job growth.