Entrepreneurship and Practical Skills

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ENTREPRENEURSHIP AND PRACTICAL SKILLS   Ola Jon Mork, Department of Marine Technology and Operations, Aalesund University College, Norway [email protected]

Øivind Strand, Department of International Marketing, Aalesund University College, Norway [email protected]

Bjørn Magne Hatlø, Department of International Marketing, Aalesund University College, Norway [email protected]

Kine Norheim, Department of International Marketing, Aalesund University College, Norway [email protected]

Abstract This paper addresses how adult students with a vocational education background utilise their different types of knowledge, skills, and experience in industry in a oneyear entrepreneurship education module (15 ECTS). This module is a mandatory part of a three-year bachelor’s programme in product development and mechanical engineering at Aalesund University (AaUC) in Norway. The module uses the Junior Achievement-Young Enterprise (JA-YE) concept of student mini-company (SMC) as a pedagogical platform. We use the distinction of knowledge types described in Lundvall and Johnson (1994) and investigate how these ‘experienced’ students use

various types of knowledge and skills during the phases of the entrepreneurship project. This paper uses a qualitative method and draws on the author’s five years of experience with entrepreneurship education and more than 60 student enterprises.   Keywords: practical skills, entrepreneurship, adult students 

Biography: Ola Jon Mork, MSc. in Industrial Economy, is an assistant professor in product development at the Department of Engineering and Nautical Science, Aalesund University College in Norway. He has broad experience as a CEO in numerous companies in industry. His teaching and research interests relate to lean manufacturing, innovation, entrepreneurship, and product development. Øivind Strand, PhD, is an associate professor at the BSc. in Innovation Management and Entrepreneurship programme at the Department of International Marketing of Aalesund University College in Norway. His teaching and research interests relate to innovation, entrepreneurship and entrepreneurship education.

Bjørn Magne Hatlø, MSc. in Economics and Business Administration, is an assistant professor and programme coordinator of the BSc. in Business Administration programme at the Department of International Marketing, Aalesund University College in Norway. He was educated at the Norwegian School of Economics and Business Administration and Boston University. He has been involved in several start-ups. His work and research interests relate to 3Dweb, entrepreneurship, service innovations, and business models.

Kine Norheim, MSc. in Project Management and BSc. in Innovation Management and Entrepreneurship. She works as an entrepreneurial gardener in a project with Aalesund University College and Aalesund Knowledge Park (business incubator). She was educated at Lancaster University, UK, and Aalesund University College. She is a member of the board of the regional JA-YE organisation.  

1. Introduction Entrepreneurship in higher education has gained much focus in recent years (WEF, 2009; 2011; OECD 2005; Martinez et al. 2010). The Lisbon Strategy for growth of employment and the Oslo Agenda for entrepreneurship education in Europe (Web 1) are typical examples of this. Beginning in 2012, all higher education programs in Norway have mandatory learning outcomes in entrepreneurship.

The authors have observed that most entrepreneurship competitions in higher education in Norway are dominated by teams having one or more adult students with a vocational background. This paper will focus on these adult students and how these students with considerable experience from industry utilise their various types of knowledge and skills in a higher education setting. We restrict this paper to the students who, when entering a bachelor’s programme in mechanical engineering and product development, already had formal vocational education and a considerable amount of work experience. We define these students as experienced students. For an institution of higher education, these experienced students represent opportunities as well as challenges. Opportunities arise from industrial knowledge, skills, and professional network they bring into the classroom. Challenges arise from a more heterogeneous student population and the fact that these students may challenge the authority of the teacher.

It is expected that the number of experienced students will increase in the years to come. This is due to the increasing emphasis on lifelong learning for competitiveness, employability, and social inclusion (EU, 2006; OECD, 2005), and also due to rapid transformations in traditional industries.

The paper is organised as follows. Section 2 links the present work to literature in two areas of research: (1) various types of knowledge, (2) entrepreneurship education. Section 3 defines the concepts of experienced students and the three axes along which the students have to develop their projects. This section presents our research question. The research methodology, the sample, and validity are described in section 4. The findings are presented and discussed in section 5.

Conclusions and implications for further research and practitioners are found in section 6.

2.0. Theory 2.1. Knowledge and skills The authors recognise the importance of defining skill and knowledge, both as separate expressions and used in combination. In this paper this is not derived, but instead the paper leans up the definitions that skill is the learned capacity to carry out pre-determined results and that knowledge can be articulated, codified, and stored in certain media, and it can be readily transmitted to others.   The process of developing a new product involves combining various types of knowledge (Ranvindranath and Grover, 1998; Berkhout et al. 2010). Thinking about knowledge and skills seems to have resulted in a number of two-sided distinctions or dichotomies (Jensen et al. 2007), typically tacit-explicit knowledge (ibid) or actioncentred – intellective-centred skills (Zuboff, 1988). Tacit knowledge that cannot be articulated (Polyanyi, 1967) is typically transferred through a long process of apprenticeship (Ranvindranath and Grover, 1998). Explicit knowledge, such as that found in textbooks and technical documentation, is more easily transferred. It should be noted that absorbing explicit knowledge may require the reader to have had many years of education. Likewise, to be able to perform the procedure in a technical manual may require years of education as well as years of apprenticeship and experience. The framework of Zuboff (1988) makes a distinction between actioncentred skills and intellective skills. The first is developed through actual performance, or learning by doing, whereas the latter is a combination of abstraction and explicit references.

Knowledge exists both at an individual and at an organisational level (Nelson and Winter, 1982). The term embedded knowledge has been used by Badaracco (1991) to describe tacit knowledge amongst individuals or groups. The distinction between explicit and tacit knowledge in organisations has been discussed by Hedlund and Nonaka (1993). Nonaka and Takeuchi (1995) have argued that the zone in between tacit and codified knowledge is what matters most.

Lundvall and Johnson (1994) distinguish between four types of knowledge (Jensen et al. 2007): know-what, know-why, know-how and know-who. Know-what and knowwhy knowledge is typically obtained through reading textbooks and attending lectures. This may take place in an educational or an industrial setting. Know-how is typically learnt in a master-apprentice relationship within an industrial sector. This can be formal, as part of a vocational diploma, or informal where highly skilled craftsmen are role models for younger craftsmen. Know-who is learnt in social practice (Jensen 2007; Carter 1989), which, in an industrial setting, will include contact with vendors, customers and competitors. As pointed out by several authors (Maskel and Malmberg, 1999; Gertler 2003), tacit knowledge is increasingly more important as codified knowledge becomes more easily accessible.

2.2. Entrepreneurship education and the structure of innovation processes Entrepreneurship education is high on the agenda in the EU and many other nation states. The Framework of Key Competences for Lifelong Learning (EU, 2006) states that ‘sense of initiative and entrepreneurship’ is one of the eight key competences. This competence refers to an individual’s ability to turn ideas into action and relates to commercial as well as social activities. The use of student mini-companies (SMCs) in entrepreneurship education has been studied by Johannesen et al. (2006), Oosterbeek et al. (2010), and Hatlø et al. (2011). The concept ‘learning by doing’ (Dewey, 1952) is central in SMCs. When comparing the use of SMC as a pedagogical platform with the main characteristics of adult learning theory (Knowles 1980; 1984), one can see that these share many of the same characteristics: selfdirected learning, one’s own experiences as source for learning, problem-centred learning, learning when problems occur, and motivation by internal factors (ibid).

There is extensive literature on the management of innovation processes (Cooper 1994, Van der Panne et al. 2003), developing an idea from its initial stages to successful launch in the market. This is usually done in structured processes like the Stage-Gate® process (Cooper, 1981; Kleinschmidt and Cooper, 1995; Berkhout et al. 2010). Various variants of this process are used in educational settings; see Hatlø et al. (2011). The link between innovation and entrepreneurship can be exemplified by the cyclic innovation model (Berkhout et al. 2010, Fig. 4). The model demonstrates that entrepreneurship is about combining and exploiting scientific and

socio-behavioural scientific know-why knowledge with industrial know-how knowledge.

In the entrepreneurship module at AaUC, we use an innovation management model that is adopted from an approach found in Trott (2008, p. 26). The idea is to manage and develop the students’ entrepreneurship project along three axes or perspectives: a technological axis, a market/customer axis, and a business development axis. Along each of the axes, the lectures specify milestones for the project. These processes will be elaborated in further detail in section 3.

There seems to be a gap in the present knowledge regarding student groups with a mix of students with vocational or academic backgrounds. The intended contribution of this paper is to shed new light on the adult and experienced student and how these students use their various knowledge and skills in a higher education setting.

3. Concepts and context 3.1. Types of knowledge The papers follow the distinction of knowledge types as found in Lundvall and Johnson (1994) and Jensen et al. (2007). They distinguish between four types of knowledge, given in Table 1 below. Knowledge typology

Learning Process

Main knowledge type

Know-what

Academic

Codified

Know-why

Academic

Codified

Know-how

Apprenticeship and

Tacit

experience Know-who

Social interaction with

Social, (Relational)

colleges, vendors and competitors (Network) Table 1. Typology for knowledge, adapted from Jensen et al. 2007

3.2. The experienced student The experienced student has a background in mid-sized or large industrial enterprises and holds one or more vocational diplomas.

Our preliminary observations of the characteristics of experienced students are as follows.

His skills of prototyping and industrial solutions are outstanding. His age is between 30 and 40 years. The experienced student seems, however, to have some challenges establishing himself at the school. In many cases this can manifest itself as a win or lose situation, which is enhanced in the student enterprise setting.

He has several innovative ideas from his former, or current, jobs and is able to describe this thoroughly with a strong link to applications and business. During the idea generation process, he delivers his proposals with enthusiasm and is keen to start up his project. The approach is always to build a practical prototype, even before the student group has decided to go for his idea.

His mood tends to correlate and fluctuate with the success of his idea. This can be a challenge for the group throughout the entire course or until the experiment students are socialised. Successful presentations and positive feedback are important factors. The experienced students take responsibility for the prototyping, networking and presentations.

The experienced student is enthusiastic to discuss his idea. An important factor for the lecturer is to have close contact during these discussions. A secondary factor is the development of the experienced student’s personality. This is really fuel for the development of the student enterprise. If he can feel that he can develop personally, his confidence grows. This is, of course, a bilateral case, since both the lecturer and the student experience joint development.

3.3. The entrepreneurship processes at AaUC: The teaching module in entrepreneurship has a duration of one academic year and contains two subjects of 7.5 ECTS, one each semester. The students work with their own ideas in teams with 3–5 students. The goal of the module is for the students to

gain insight into entrepreneurship through the development of a new product. The project aims to develop along three axes, as shown in Table 2. Along each of the axes, we have indicated typical milestones. Process

Milestone 1

Milestone 2

Milestone 3

Technical development

Prototype

Prototype testing

Product

Customer/market

Lead User

Application Test

Market

Business planning

Vision

Business Case

Cash

Table 2. Structure and milestones of processes in entrepreneurship module

The technical development process deals with building a prototype from the selected product idea. The aim of the process is to learn rapid prototyping to find solutions and reduce risk in the further development of the product. The assignment for the prototype process is individual, partly based on making working drawings for a model or prototype from the product the group has selected. Before practical work can begin, the drawings have to be approved by the workshop manager, who is an expert on prototyping. Then a model or prototype can be made. The prototypes are evaluated immediately and continuously in the building process, and advice is given by the workshop manager. After working with the prototypes for some weeks (dependent on the skill of the students), the prototypes are ready for testing by the students, the workshop managers, and the lecturers. A presentation of the prototypes is made and there is an evaluation of them. Development of complete products happens from time to time, but it is not common. If the students have made a complete product, this is outstanding and reaching this stage seems to release a business opportunity. The milestones in this process are prototype, prototype testing, and product.

The customer/marketing process deals with users’ experience and evaluation of the product. The students must reach this stage of product development to pass the examination. Searching for users is started at an early stage in the student enterprise, and a network including users is one of the requirements to go further with the product idea in the student enterprise. The customer/marketing process also includes users’ testing process of the product, which is different from the testing of the prototype from the technical point of view. Application tests are more planned and extensive where the users challenge the product’s properties. It is known that

lead users contribute significantly to the product development and commercialisation of products. Lead users (von Hippel, 1978) take part in the testing of the product, but only some student enterprises manage to enter this real user test of the products. Searching for user groups and the development of product family concepts is a part of the educational programme and is done at a late stage of prototype development. One of the targets of the process is to design a product family concept connected to several user groups. Students entering this stage benefit from this education. The milestones in this process are application test, market identification, and market.

The business planning process normally starts after eight weeks of the course. The aim of the process is to understand the business context of the product idea. A theoretical foundation is made and a relatively thorough process is undertaken as one of the assignments. Business plan education is carried out by a secondary lecturer who had an industrial and business background and who is also a new discussion partner for the student enterprises. The business planning process is a last chance for the students with minor practical skills and experience to fight for their grades in this course. They normally throw themselves upon this assignment and can achieve a kind of control throughout the assignment. Without this, the theoretical students would have fewer opportunities to show their knowledge and skills in the course. The business plan process should provide motivation for lifting the product idea to a vision and for further investigating the business possibilities. Establishment of a network of stakeholders seems to be crucial in this process. Creation of cash flow happens but is dependent on the motivation of the students. The milestones in this process are vision, business case, and cash. The role of the chief lecturer in the technical development process, the customer/marketing process, and the business plan process merits discussion since he can define the importance of the process formally or informally. This can be done by social interaction with both the individual students and the student groups. Actually, with this free space in the course, there is a fantastic opportunity for the experienced student to attract the attention of the chief lecturer and even influence the topics of the course. Feeding the lecturers with interesting knowledge and information, particularly with respect to sales attitude, the experienced student can really bloom during the first ten weeks of the course. After that point it becomes more difficult since other students and student enterprises can start to produce interesting cases and exhibit good results.

  Based on theory, concepts, and preliminary observations we pose the following research question.

To what extent are the experienced student’s know-how and know-who skills crucial for the entrepreneurship processes at AaUC?

4. Research design We used a qualitative research method based on several elements. The starting point was the chief lecturer’s observations and reflections of the experienced students. Participants from three student enterprises were interviewed using semistructured interviews. The interviews with the former students were done by telephone and lasted for thirty to fifty minutes. The interview guide is found in appendix A. The informants were given the freedom to explain and elaborate on their experience from the SMCs. The telephone interviews were done by two of the authors, one from outside the engineering department.

Validity Since this a qualitative study, we have carefully considered the validity, following the framework outlined by Burke Johnson (1997). Descriptive validity refers to accuracy in reporting the descriptive information. The main author is also the chief lecturer for the student groups under investigation and follows the students for an academic year. We have used the method of investigator triangulation in order to strengthen the descriptive validity. The co-investigators are lecturers in different departments at the same university college and JA-YE project staff.

Interpretive validity is strengthened by sharing the main author’s interpretation of the various situations with several members of the actual student group and the coinvestigators. This was done with the members individually so that they could not directly influence or crosscheck each other’s interpretations.

Theoretical validity relates to the question of whether the theoretical explanations developed from the research actually fit the observed data. A well known strategy for

promoting theoretical validity is extended fieldwork. The main author spends one day a week for an entire academic year with the students. He has different roles as chief lecturer for the class and as mentor, or coach, for each of the student groups.

Internal validity refers to the degree to which one can conclude that the observed relations are causal (ibid). This is strengthened through the large number of students studied over the past five years (over 150). Furthermore, there have been some students who are the same age as the experienced students but do not hold a vocational diploma. There are also many ordinary students.

The external validity of the paper is strengthened by triangulation with teachers responsible for a similar program in a university college in another part of the country.

5. Findings The paper interprets the findings along the three processes defined earlier in the paper.

In the technical development process, the experienced student uses his superior know how skills. He is able to make the prototype one step ahead of the educational programme. He can also support other members of the SMC doing the prototype work. Thorough technical testing of the prototype is made step by step during the building of the prototype. The experienced student is able to identify and provide resources needed for building the prototype. This can be special tools, machines or components (very important to foresee to have an early prototype). The experienced student has little need for using know-who since he can do or control most of the technical development process himself.

The impact of a successful technical development process on the SMC members is worth pointing out. They start to behave like winners of a competition in the class. Their self-confidence rises, they become strongly motivated, and visions start to develop throughout the entire team. Several of the members can be the weakest students in the class in other subjects, but now they are winners! This fuels the motivation for hard work. All the informants confirmed this.

In the customer marketing process, the experienced student seems to use a combination of know-how and know-who skills. He is able to see his own role, probably from his former experience in real projects and teamwork in the industry. Using his know-how combined with his know-who understanding enables him to search for a lead user, and an application test can be performed. He understands the importance of real application testing and uses his former experience from networking. He does not take the role of the user, contrary to ordinary students. He searches for a lead user having a good standing and reputation in the actual business sector. He understands the importance of the combination of the right user and the right product. He does not wait until the prototype is ready but works hard in parallel to find the lead user. He strives to start the application test at an early stage, one step ahead of the educational program. Identification of customers and markets seem to come as a natural next step from the application test.

The impact on the SMC members is greater motivation, and contact with ‘an outsider’ seems to unify the group. A pull effect is achieved and the development of the prototype goes forward rapidly. An iterative process is established. All of the informants confirmed this.

In the business process, the experienced student uses the same combination of know-how and know-who skills as in the customer market process. He knows from his former experience that the business must be profitable. Customers who can apply, promote, and pay for the product need to be identified. The experienced student finds this customer within a few weeks. All together, with a working prototype and a customer willing to pay, the road to business and success seems to be right around the corner. But in the business process three main paths were identified and confirmed by the informants.

Path 1: The experienced student has identified and developed the idea together with the team. They create the vision, develop the business plan, and target the cash together. He uses his combination of know-how and know-who and works side by

side with his teammates in all meetings and communication with users, customers and possible investors. The team blossoms and moves forward quickly.

Path 2: The experienced student has brought in an idea that is at an early stage and he partly develops it together with the group. In the further work, he tends to create alliances. Some of the members of the group are accepted, are full team members, and get access to the successful cooperation with users and customers. The experienced student will try to shut out one or two members of the SMC, however. He declares that these students ‘cannot contribute’ to the project. The impact on the group is negative and leads to a split in the team. Some team members do not share the experienced student’s attitude towards the other team members and start to lose confidence.

Path 3: The experienced student has developed his idea for a long time before introducing it in the educational program. From an early stage, he declares his ownership and tries to control the development of the idea. His feelings are strongly connected to his idea and his actions start to follow these feelings instead of rationality. In other words, the progress of the SMC starts to correlate with the experienced student’s feelings or moods. The practical implication of this in the prototype process is minor. He is normally confident and is happy to visualise his idea. The irrationality starts in the customer marketing process. He uses his combination of know-how and know-who in a negative way for the SMC, and he controls the contact with the lead users and customer alone. He declares his ownership and establishes strict rules for outside communication. Nobody else can speak outside the group except him. The same mechanisms control the business process. The experienced student is caught in his own trap. Development of the SMC is stopped and insecurity spreads among the team members.

6. Conclusion This research points out that the experienced student utilises his know-how and know-who skills differently in the various processes.

In the prototype processes, the experienced student uses his know-how skills, but less so his know-who skills. In the customer marketing process, a particular combination of know-how and know-who is utilised. It seems to be the knowledge of how to gain access to lead users. This particular combination occurs in the business process, finding a customer willing to pay. Understanding of business in general seems to be a crucial factor.

However, the occurrence of real business possibilities triggers the experienced student’s feelings of ownership of the product and future prosperity. The combination of strong emotions of ownership and business success can be a double-edged sword for the SMC. 

6.1. Implication for further research   The framework from Lundvall and Johnson (1994) seems to be able to identify an interesting area between the know-how and know-who, but in the SMC context this overlapping area should be further elaborated. The interplay between individuals and the group may also need further studies.

6.2. Implications for practitioners   Experienced students should be identified before the teams for the SMCs are decided since they have valuable know-how and know-who skills. Ordinary students normally lack these valuable skills. The experienced student’s special skills should be utilised in the SMC course.

A thorough discussion about their product idea before the idea is realised in an SMC can be fundamental to ownership of the idea. The experienced student has to release his idea to the SMC completely. It is difficult to predict whether he will be able to honour this agreement as the SMC’s work goes forward. The feelings will possibly control his behaviour and attitude during the SMC’s program and limit the development of the product and the students’ learning. Social elements or team players inside the group seem to have a role in the organisation of the SMC.

 

Appendix:   Interview guide    Q1: Why was the prototype building process successful in your SMC? Can you point out two crucial factors? Q2: Who defined the testing procedures? Q3: What is crucial for the development of a product ready to market? Point out two crucial factors. Q4: How did manage to establish contact with the application expert for your product? Q5: Did you manage to identify a market? How did you do it? Q6: Do you think the idea was lifted to vision during the SMC work? Why did this happen? Q7: Did you manage to establish a real business idea? How? Q8: Did you convince professional investors that your business idea would be profitable?  

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