College Students Souring on Business Degrees

Inside Higher Ed‘s Dan Berrett writes about recent data from the American Freshmen Survey and business school admissions anecdotes to ask whether today’s college students are less interested in studying business. From the article at Inside Higher Education:

The drop has been particularly stark at Pennsylvania State University, which, since 2008, has seen a 30 percent decline in undergraduates accepting offers from its Smeal College of Business, said Anne Rohrbach, executive director of undergraduate admissions. “Fewer students see that a business degree guarantees career and financial returns,” she said via e-mail. She attributed this decrease, in part, to Smeal limiting its enrollment and admitting students with a stronger record of academic achievement, which can depress yield rates. But the number of applications to Penn State’s program during this period has dropped by nearly the same percentage as acceptances, she said.

Rohrbach also thinks the larger economic picture has played a role. “With the headline news of the recession, students are not as certain about a future in business,” she said. The ranks of the undeclared, always well-populated, have grown, she said, as a result of the uncertain job market.

Penn State is not alone. The share of business majors in the University of Central Florida’s undergraduate student body is down by nearly 15 percent this semester relative to 2008. At Purdue University, nearly 13 percent fewer students enrolled at the Krannert School of Management this semester compared to two years ago, and in 2009 the number of applicants dropped 26 percent from the year previous before edging back up this year. The tumult in the business world has made students and their parents more wary about job prospects after graduation, said Mitch Warren, senior associate director of admissions at Purdue. “There are cyclical trends in many areas; business is no different,” said Warren, who added that these cycles of popularity need to be seen as part of a longer-term pattern of natural ups and downs. “Things that are doing quite well now in five or six years might not be.”

The point is made in the article that areas of interest of entering freshmen differs dramatically from degrees offered — did you know what you were majoring in when you entered college? (I did not).

Additionally, in arguing for business school strength, supporters point to the strong interest that young people have in launching their own firms in the future. This is proof of strong demand into the future they argue.

Many of those interested in building their own firms,  who eventually become self-employed, do not major in business (see Moutray’s research).

Business school is the locus of entrepreneurship on most campuses, but specialty programs in engineering, arts, and social entrepreneurship have grown outside of the business school. Is that a reason students are souring on business? Is it the growing social/political problems and the rise of massive federal salaries?

via News: Souring on Business? – Inside Higher Ed.


Does Entrepreneurship Education Lead to More Start-ups?

NO, according to a new study from the Kauffman Foundation (did you expect someone else to publish an entrepreneurship study? — yes, there is a monopoly in entrepreneurship research, but that is a discussion for another day).

The Venture Capital Blog at the WSJ highlights the research by Dane Stanler and Paul Kedrosky. They find that recessions, taxes, venture capital levels, and entrepreneurship education do little to affect new firm foundation. In fact, they found that during the period 1977-2005, start-up levels remained nearly constant (fluctuating between 3-6% a year). Here is a snippet from the WSJ: Continue reading “Does Entrepreneurship Education Lead to More Start-ups?”

SBA on Brain Drain, Mobility, and Educational Attainment

The post below was originally posted at Richard Florida’s Creative Class Exchange.

Earlier this week, Chad Moutray, Chief Economist of the Office of Advocacy for the SBA,  released a research paper titled Educational Attainment, “Brain Drain,” and Self-Employment: Examining Interstate Mobility of Baccalaureate Graduates, 1993-2003.

The paper makes use of the Dept. of Edu’s 2003 Baccalaureate and Beyond (B&B) database. Moutray investigates the employment and location of self-employed and wage and salary workers 10 years after graduation. Some of the findings include:

  • academic achievement (grades) is more likely to indicate higher mobility than choice of major
  • states with “knowledge economies” are more likely to attract these highly mobile college graduates
  • having strong ties to home detracts from mobility – actually owning a home ‘crushes’ mobility for self-employed

You can download this interesting and important paper via the SBA’s Office of Advocacy and here’s the link to the December 8 press release.

Campus Entrepreneurs as Misfits Schools Can’t Handle?

I cruised by the Students 2.0 blog and found this post by Sean the Bass Player,

Here’s to the crazy ones. The misfits. The rebels. The troublemakers. The round pegs in the square holes. The ones who see things differently. They’re not fond of rules. And they have no respect for the status quo. You can praise them, disagree with them, quote them, disbelieve them, glorify or vilify them. About the only thing you can’t do is ignore them. Because they change things. They invent. They imagine. They heal. They explore. They create. They inspire. They push the human race forward. Maybe they have to be crazy. How else can you stare at an empty canvas and see a work of art? Or sit in silence and hear a song that’s never been written? Or gaze at a red planet and see a laboratory on wheels?

This quote, of course, comes from the famous Apple Think Different ad campaign. Students 2.0 takes it as a jumping off point to discuss higher education’s inability to ‘deal’ with the rebels, misfits, and troublemakers. While the blog doesn’t mention entrepreneurs, its clear that many colleges and universities are having trouble figuring out what to do with those students who want to start ventures while on campus. According to the Sean’s entry,

Let’s face it; the current education system just doesn’t know how to handle these kinds of people. “The round pegs in the square holes,” as Apple refers to them. The system doesn’t understand creativity. It robs all students of their creative consciousness and replaces it with structure, structure, and more structure, only to prepare them for a 9-to-5 job, Monday to Friday, every week of every year for the rest of their lives. Art, Music, Drama… you name it, the current system has a course for it. But that course doesn’t do any form of justice to the many greats that have over hundreds of years created amazing works and done incredible things, demonstrating how beautiful these arts can be. Students aren’t told to let passion drive them forward, or let their inspiration flow and their imagination stop at nothing. They are told to follow the rules, and do whatever it takes to get a ‘pass.’ Where would we be if Bach was told his Brandenburg concertos ‘didn’t quite meet the required standard’? What would have happened if Van Gogh was told his paintings just ‘didn’t make sense’

As we saw in Chad Moutray’s recent paper on BA majors and the self-employed, the self-employed have lower GPAs that those who go for the corporate, non-profit, or governmental jobs.

There are a handful of schools doing an exceptional job working with entrepreneurial students (Babson, the Acton MBA,  Stanford and others), but most don’t handle them well — perhaps thats why we see a fair amount of campus entrepreneurs dropping out when their firms start doing well. It is time for Administrators and Professors to ‘think different’ in their approach to working with these students. Any thoughts or recommendations?

New Paper on BA Majors and Self-Employment

A new working paper by Chad Moutray of the SBA investigates the relationship between choice of major or field of study as an undergrad and employment choices down the road. The paper follows 1993 grads and follows them through 2003. I haven’t read it yet, but looks like it is going to have some good insights and . From the SBA (download paper)….

This working paper, “Baccalaureate Education and the Employment Decision: Self Employment and the Class of 1993,” utilizes the U.S. Department of Education’s Baccalaureate & Beyond (B&B) data series, to delve into the relation of collegiate education to the employment decision. The study shows that one’s choice of college major is a major determinant of whether one becomes self-employed or chooses wage-and-salary work.

A snippet from the beginning of the paper:

The self-employed, for instance, are less likely to have high concentrations of education, engineering, math or science majors. Business and management majors ar emore likely to work for a for-profit business, with social science and “others” majors gravitating toward self-employment.

The self-employed tend to have slightly lower grade point averages (GPAs) than their wage-and-salary peers. Those with higher GPAs are likely to pursue an occupation in the not-for-profit or government sectors.

The self-employed, in greater proportion than the population as a whole, either earn less than $20,000 or $100,000 or more. Such a U-shaped distribution suggests the wide variation of career options and financial pay-outs among the self-employed; some entrepreneurial occupations pay very little while others pay above average.

Pretty interesting data points that have a lot of potential avenues for analysis. I will share some more thoughts when I read the paper. Any initial thoughts? Sounds like there are lots of struggling artists among the self-employed?