Can entrepreneurialism start in the classroom?

Can entrepreneurialism be taught? As business leaders, especially C-suite and finance executives, are expected to have a broader knowledge to meet growing responsibilities in changing roles, the question of whether entrepreneurialism should be a part of their education comes under debate.

When measured in venture capital terms, as a share of GDP, Deutsche Bank found the top three countries in the world for producing startups are the US, Netherlands and UK. These are all countries with established heritage of mercantilism.*

Leading the way in entrepreneur education is US-based Network for Teaching Entrepreneurship (NFTE), which provides programs for young people from low-income communities to stay in school and plan for an entrepreneurial future. NFTE has helped more than 500,000 young people since it was founded in 1987, and its programs are also offered in Israel, China, New Zealand, Chile, India, Belgium, Germany, Ireland and Colombia. The nonprofit company includes start-up classes in its curriculum.

Recent figures from the UK’s Office for National Statistics show that the net rate of business creation (i.e., the difference between businesses that have started and those that have failed) has been on the rise since 2010, but start-ups often fail in large numbers.** The reasons why are varied, but one recurring issue is finance, which begs a question about the state of financial skills within nascent businesses.

According to Divinia Knowles, CFO with MindCandy, the company behind the hit kids’ website Moshi Monsters, having someone with adequate financial know-how can have distinct advantages. For Knowles, the issue is not necessarily around the core technical skills, but the capacity to ask tough questions as the business moves through key stages of development.

“Some entrepreneurs are, ‘well we’ll think about monetization later.’ My take on that is that you shouldn’t. You can think about it in depth later, but you should have some idea about how the thing is actually going to work, and what people are going to be paying for.” Forcing that thinking is where finance professionals with “business savvy” can come in, according to Knowles.

“If you are the finance person who is looking at a start-up, you have to be the person who pokes and prods and tries to break things in terms of assumptions and business models,” she says.

Of course, these skills can be learned on the job – in the US, there are whole networks dedicated to the entrepreneurial Certified Public Accountant (CPA), aimed at improving their understanding of issues facing start-ups. However, there is a growing recognition among global accounting institutes of the need to equip accountants with some core start-up skills. While the Association of Chartered Certified Accountants (ACCA) qualification – studied in more than 170 countries – for instance, doesn’t explicitly teach entrepreneurialism to potential accountants, ACCA’s Qualifications Development Manager Gareth Owen says, “One of the main headings in the competency framework is strategy and innovation, which is closely linked to entrepreneurialism and it is the way that the accountant supports such a business which can be taught.”

“The outcomes under this heading would include the ability of the accountant to be able to manage, adapt and redesign the finance function so that it properly supports the business through what can potentially be quite disruptive phases of growth and development.” According to Owen, one of the dangers is that the finance function loses the ability to sustain the company adequately from overtrading and other financial and market risks. “The ACCA curriculum therefore contains a strong focus on risk management, which is particularly important in small businesses.”

For its part, the Chartered Institute of Management Accountants (CIMA) – which has students and members in more than 165 countries – sees its training as aimed at accountants in business, providing skills that are transferable from mature to start-up business. Research conducted by the Institute in 2011, found that small and medium enterprises (SMEs) do not engage financial professionals to the extent that large companies do.*** CIMA says the value of accountants to entrepreneurs is that their “quantitative mindset” urges them to look for evidence and conduct analysis to avoid the unnecessary risk that might be associated with entrepreneurs acting on their “optimistic nature” and “hunches.”

Peter Simons, a technical specialist at CIMA, says entrepreneurial businesses can house an inherent conflict between an “exuberant” entrepreneur and a “prudent” finance chief.

He concludes, “When it comes to raising money, whether from a bank or from the markets, it’s really important that the exuberant entrepreneur is seen to have a counterbalance in terms of somebody who is credible.”

*, accessed 12 November 2013.
** “Business enterprise closure rates higher than start-up rates during recession,” Office of National Statistics website,–2004-11/sty-businessenterprise-losure-rates.html, accessed 12 November 2013.
*** “Finance transformation: a missed opportunity for SMEs?” CIMA website, Thought-leadership/Research-topics/Finance-transformation/Finance-transformation-a-missedopportunity-for-SMEs, accessed 12 November 2013.

The article was written by:

  • Gavin Hinks

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