A senior figure at industry body the Royal Academy of Engineering has suggested that technology entrepreneurs need a business education, as record numbers of graduates launch ventures year-on-year instead of joining corporations.
Arnoud Jullens who is head of enterprise at the academy said that team management, communication, and marketing skills are needed to transform ideas into successful businesses. “These are usually skills that have to be acquired through experience as well as through further education and training,” Arnoud said.
Writing in the Financial Times, he said that “quality training programs are central to the growth of UK SMEs”, but that the costs can seem daunting to fledgling start-ups.
Arnoud said that in the technology industry in particular, business skills can be “significantly underestimated”. He said such skills have an “impact on the fundamental success of an enterprise”, and added that entrepreneurs can pour cash and energy into technology development and “excessive product fine-tuning”.
He said that traditional school education alone isn’t likely to prepare a budding entrepreneur to face a group of hardened and experienced angel investors, for example, which could make or break a start-up.
Workforces have radically altered in makeup since the financial crisis, with a record 15% of the UK workforce now self-employed, according to figures from the Office for National Statistics, accounting for a third of the growth in employment since 2010.
At the other end of the chain, top business schools are also graduating more students into entrepreneurial ventures. At MIT Sloan, 36% of MBA graduates are starting companies; at Babson College, which specialises in entrepreneurial training, 39% of MBAs have launched start-ups.
Arnoud acknowledged that entrepreneurs are often too short on time to spend time training in classrooms. “And by the time you’re running a cash-strapped start-up, investing in business education is often low down on the priority list,” he said.
But he added: “These days there are countless flexible, online ways of bolstering business knowledge.”
MIT, for example, recently developed a series of Moocs, or massive open online courses, run through the edX platform that are designed for entrepreneurs, in partnership with Turkcell, the only listed Turkish company on the NYSE.
The telecoms and technology company launched the Turkcell Academy, an online learning platform, last year and its videos have since been watched by more than 1.5 million users.
Sanjay Sarma, MIT’s director of online learning, said that one of the biggest transformations in education has come about as a result of the “ubiquity of [the] internet in our lives”.
Tech City, a government agency seeking to foster a cluster of tech start-ups in London that can rival Silicon Valley, in November launched The Digital Business Academy, which delivers Moocs for entrepreneurs through an online platform.
It was developed in partnership with Cambridge University’s Judge Business School and University College London, among other partners.
Professor Stephen Caddick, UCL vice-provost for enterprise, said that by acquiring skills in business, digital technologies and entrepreneurship, people will be able to grow the companies that will “create jobs and drive the UK economy”.
Arnoud said that this where business mentoring proves particularly valuable, as a mentor is able to help entrepreneurs learn “on the job”, rather than through hypothetical scenarios.
James Hickie, lecturer in entrepreneurship at Manchester Business School, said that start-up founders believe strongly entrepreneurial ecosystems.
“Mentoring is really important to enable entrepreneurs to succeed… Having a group of entrepreneurial contacts you can bounce ideas off is really important to growing a business,” he added.
Around 100 individuals, including the founders and chief executives of listed British companies, volunteer their time to mentor technology entrepreneurs through the Royal Academy of Engineering’s Enterprise Hub.
This is a theme that business schools have been keen to adopt.
Cambridge Judge, for instance, employs 16 volunteer “entrepreneurs in residence”. These include a co-founder of ARM, the semiconductor maker whose chips power iPhones and which is listed on the London Stock Exchange.
Hanadi Jabado, director of Accelerate Cambridge, the school’s incubator, said that entrepreneurs without mentors stand “no chance”.
Nick Badman, chairman of the Centre for Entrepreneurship at London’s Cass Business School, said that mentors cannot make people succeed, but they can be “invaluable” in helping them avoid the mistakes of those who have gone before.
They are also well placed to bring investment networks that business schools lack, according to Justin Jansen, professor of corporate entrepreneurship at Rotterdam School of Management.
“Their relationships provide a springboard for many of our start-ups to get customers and funding,” he said.
But Arnoud added that entrepreneurs fresh from academia often find the transition to the business world a difficult one to navigate.
“From being an acknowledged expert in one specialist area they suddenly have to take a step back and acquire the range of different skills involved in running a business,” he said.
However, he pointed out that a workforce is a primary asset for any business. “Ambitious technology businesses should be up-skilling as a priority,” he said.