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INTERNATIONAL ASSOCIATION OF SCHOOLS AND

INSTITUTES OF ADMINISTRATION

ASSOCIATION INTERNATIONALE DES ECOLES ET INSTITUTS D’ADMINISTRATION

GT-WG I

Public Administration: Challenges of Inequality and Exclusion

Miami (USA), 14-18 September 2003

L’Administration publique Face aux défis de l’Inégalité et de l’Exclusion

Miami (Etats-Unis), 14-18 Septembre 2003

Creativity, Innovation and Entrepreneurialism: the New Public Management Tools to Combat Inequality and

Exclusion in the 21st Century

R.D. Pathak Professor & Head Department of Management & Public Administration The University of the South Pacific FIJI

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Abstract

This paper, based on the results of a multi-country study, emphasises on

the development and growth of a culture specific and customized

entrepreneurship education within universities so as to make them

powerful engines of economic development. Taking the example of the

University of the South Pacific (covering 12 Pacific Island Countries having

different languages and diverse cultures), a few pedagogical issues in

entrepreneurship education and their implications for Management and

Public Administration curriculum in universities have been discussed.

(Word count: 97)

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Introduction

In the post cold war period, with the decline in political tensions, global

poverty had attracted a renewed interest and attention. The phenomenal

growth rates achieved by East Asian countries generated a wave of

optimism and were generally attributed to free market policies pursued by

these countries. It was but natural for others to think that if they also

followed the path of free markets, they would grow faster and global

poverty could be reduced. But are free markets good? Is there

convincing evidence to support that trade liberalisation will increase the

rate of growth of output and reduce poverty?

There has been an ongoing debate between the pro-globalisation group

and the anti-globalisation group. While those in favour of globalisation

see no alternative to free markets and are dissatisfied with the current

slow progress of the movement; those who are against globalisation want

a reversal of the globalisation movement so as to protect domestic

industries and jobs, preserve human rights, contain environmental

damage and, in particular, reduce poverty and increasing income

inequalities. For example, while Hernando (2000) mentions a growing

concern among the business communities of the West that the failure of

the developing world to implement capitalism will eventually drive their

economies into further recession; Gray (1998) on the other hand, writes

that "there is nothing in today's global market that buffers it against the

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social strains arising from highly uneven economic development within

and between the world's diverse societies. The swift waxing and waning

of industries and livelihoods, the sudden shifts of production and capital,

the casino of currency speculation - these conditions trigger political

counter-movements that challenge the very ground rules of the global

free market".

This paper is no attempt to arrive at simplistic solutions or "utopian"

efforts to create a free market or the non-free market models for

combating inequality and exclusion in the 21st century, because there is

no need for all the markets to function like the free markets or non-free

markets. For example, Rao (1998) based on his empirical work found that

only 12.5% of U.S. GNP transactions take place in the competitive

markets. Similarly, support is also somewhat mixed for the belief that

high growth rates reduce poverty rates and improve income distribution

outcomes (Rao, 2002). For example, Xavier (2002 a,b) found that

between 1970 and 1998, world poverty rates had declined. However, in

Asia this decline is rapid and significant, in Latin America a bit modest, but

in Africa, poverty rates have increased.

In the ongoing debate on globalisation, there is a group which does accept

the many benefits of globalisation but is critical of the universalistic

prescriptions or implementation models advocated by the IMF, WB, and

WTO. This group has gained wider recognition after the East Asian and

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Russian crisis and well known advocates of this group are nobel laureates

- Professor J. Stiglitz and Professor A.K. Sen. What is worth noting here is

that this group led by Stiglitz (1998) recognises the viewpoint of Sir Karl

Popper (1994) i.e. "All life is Problem Solving" . This paper is based on

this viewpoint and makes the proposition that inequality and exclusion in

the 21st century world can be combated if decision-making and problem

solving skills of our graduates are improved. Rao (2002) aptly points out

that whether we produce graduates who are good at learning or those

who can think and solve problems, depends on our educational

philosophy; and if the East Asian countries had paid adequate attention to

their educational philosophies, perhaps their crisis would not have been so

severe. Hence this paper emphasizes the need to combat inequality and

exclusion in the 21st century through paying adequate attention to

'Problem Solving' skills amongst our graduates through creativity,

innovation and entrepreneurship education. In this context, Qalo (2002)

very aptly concludes that "our education system needs innovative syllabus

and curriculum to launch our young into globalization. It is important that

the innovation should begin as early as possible at primary schools,

assuming that parenting was well done in bringing up children".

Indigenous Entrepreneurship

According to Hindle & Rushworth (2002), Entrepreneurship education can

start as early as primary school and continue right through the education

life cycle extending into the concept of ongoing 'Life Long' learning. Hindle

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(2001) further makes a very pertinent and important observation when he

emphasizes that entrepreneurship education should not be confined to

mere specific information transfer but should contribute on a philosophical

level to the individual's human development which he calls 'the plus-zone'

challenge. Stimulation of indigenous entreprenuership within an

enterprise culture which fully respects indigenous traditions can lead to

empowering of indigenous people as economic agents in a globally

competitive modern world. The greatest Fijian of the 20th century, Ratu

Sir Lala Sukuna, established Fijian institutions on British bureaucracy

and governance that are thought now by the average Fijian as totally

indigenous (Qalo, 2002). Examples are: Native Land Trust Board (NLTB),

Fijian Affairs Board (FAB), Native Land & Fisheries Commission (NL & FC)

and the Fijian Development Fund Board (FDFB).

Professor Kevin Hindle, of Australian Graduate School of Entrepreneurship

in Melbourne and Michele Lansdowne of Salish Kootenai College in

Montana, USA are aiming to develop a research framework for indigenous

entrepreneurship. According to Hindle & Rushworth (2002), "The

transition from passive welfare to active empowerment of indigenous

Australians is one of the most important policy areas in which knowledge

of entrepreneurship has a major role to play". Similarly, Native American

entrepreneurship is a very significant topic, not only because it seems to

be a rising trend, but also because it is widely considered to be an efficient

tool for alleviating the economic problems that plague this community

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(Seymour, 2003). Maori (indigenous population of New Zealand) have

also been found to be every bit as entrepreneurial as European New

Zealanders. Maori entrepreneurship is particularly strong in the land

based industries but is becoming increasingly important in tourism,

forestry, fisheries and related businesses in the service sector. If they

were ranked on their own, Maori in New Zealand would be the World's

seventh most entrepreneurial community. (The Bartercard Global

Entrepreneurship Monitor report, November 2002).

While the industrial revolution was supported by an integrated transport

system, the knowledge revolution requires an integrated support system

for innovators. The media release, following the February 2003 innovation

summit in Australia, began with a call to action. "We are in the midst of a

revolution from which a new order is emerging. The solutions of the past

decade will not suffice in the new knowledge age. Intangible assets - our

human and intellectual capacity - are outstripping traditional tangible

assets - land, labor and capital - as drivers of growth. If we are to take

the high road, a road of high growth based on the value of our intellectual

capital, we need to stimulate, nurture and reward creativity and

entrepreneurship". (National Research Priorities submission 40, CRC

Innovation, 26 June 2002). GEM New Zealand 2002 report also points out

that "the knowledge economy is about converting knowledge into profit -

that is, developing actionable knowledge (innovative ideas) to solve real

world problems. Innovation means generating and implementing new

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ideas by exploiting the potential creativity that lies within organizations.

For this to happen, there needs to be a cultural mind set which thrives on

new ideas, rather than acting like an "immune system" which repels

them" (Radka, 2002a). Drucker (1994) highlights innovation as "the

specific tool of entrepreneurs… capable of being learned, capable of being

practiced". No wonder that a recent survey of top 500 CEOs in America

emphasized the need to practice creativity and innovation in order to

survive in the 21st century. However, only 6% of them believed that they

are tackling it effectively (Radka, 2002b).

What we do at the University of the South Pacific

The University of the South Pacific (USP), established in 1968 and one of

only two such regional universities in the world1 is owned by and primarily

serves, twelve Pacific Island Countries (PIC) in Melanesia (Fiji, Solomons,

and Vanuatu), Polynesia (Cook Islands, Tonga, Niue, Tokelau and Samoa),

and Micronesia (Kiribati, Marshalls, Nauru and Tuvalu). These twelve

Pacific Island Countries have many languages, cultures and geographic

remoteness amongst them.

Entrepreneurship education in USP has been an important focus of the

undergraduate and postgraduate management programmes. At the final

year of the undergraduate level, the course, New Venture Creation, has

been offered for the last several years. At the M.A. postgraduate level,

1 The only other regional university is the University of the West Indies.

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the course Management Development in the small business is offered. In

the M.B.A. programme, a course called, New Venture Creation, is on offer

as an elective course for the last 4 years.

We do not have a business school but instead a Department of

Management and Public Administration, and MBA programme within a

School of Social and Economic Development comprising of disciplines

like Sociology, Accounting & Financial Management, Economics, History &

Politics, Geography, Tourism, Development Studies, and Land

Management. Our teaching follows typical patterns of entrepreneurial

education in respect to small business management and we emphasise

theory within an interdisciplinary perspective that the School and the

University encourage. We are, therefore, in a relatively better position to

offer holistic entrepreneurship programs which are more likely to produce

graduates who are capable of starting businesses than individual subjects

within stand alone management programmes. In a study comparing

graduates from a holistic programme with a sample of MBA graduates who

had studied entrepreneurship electives, the former were found to have

significantly more entrepreneurial outcomes (McMullen & Gillin, 1998).

Realising that entrepreneurship is both an art and a science, we make

special efforts to endow our students with the management skills

necessary for an entrepreneurial career. We attempt to bridge the gap

between theory and entrepreneurial practice using a number of

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techniques. We make students do a research project in small business

and thereby engage them with small businesses and entrepreneurs. We

also have "visiting entrepreneurs" who talk to students about their

experiences. We bring further awareness of entrepreneurship using case

studies, teaching real life examples, student presentations of their

research work, and by making students interact with entrepreneurs both

in the class room as well as outside the class room. Whereas teaching

entrepreneurial theory and good management skills confirm to academic

norms, there are pedagogical difficulties in teaching the practice of

enterprise. We also realize that there are many dimensions to enterprise

and we should not aspire to satisfy all the different requirements of

stakeholders with an interest in enterprise education (Jack & Anderson,

1999).

We are, therefore, putting emphasis on the development of specific

pedagogical methods and techniques which are suitable for encouraging

entrepreneurship in the South Pacific region. For example, Qalo (2002)

gives a successful example of 'mentoring' as a pedagogical tool to

encourage entrepreneurship amongst Pasifika students. Over the last four

years, four male students from his father's side used their spare

Saturdays to plant taro and other crop for their households, customary

gifts and sales. The process resulted in the purchase of a 4 x 4 Toyota

Land Cruiser for farming in the year 2000, funding of University texts,

field work; and loans for personal needs were paid back at 10% interest in

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the financial year 2001-2002. Similarly, on his mother's side, monthly

meetings are run by parents, students and alumni who are working their

micro-finance or Lololo.1 Their fund raising enabled them to gift $1000 to

their uncles from the chiefly island of Bau as Vasu2 or Fa'u in the Tongan

Language. The money being the village council decision for every

household to make such a donation. More than $50,000 was collected on

a Saturday morning for upgrading the school and the village in general in

the year 2002. Qalo (2002) further makes a very thought provoking

remark and concludes that "While it is great for economists, accountants,

bankers, and so on to tell a few how to make mega bucks, the majority of

the world are poor. In our efforts now we must address that new

challenge and we look upon our young to take up the challenge".

A very important issue, therefore, in entrepreneurship education is how

to customize it according to each country's unique cultural context. A

wide range of critical success factors for entrepreneurship identified by

previous empirical studies in different countries support the importance of

the customization of entrepreneurship education (Lee et al., 2002).

Recently the author of this paper alongwith colleagues from U.S. & Korea3

conducted an empirical study amongst University students in the US

(where exists a strong entrepreneurship tradition), Korea (where

entrepreneurship is just beginning to emerge as an important business

1 Micro Finance at the School is referred to as Lololo, the Fijian word for a food bank. 2 This is the Fijian word for a woman's child or children in her household. 3 Lee, Sang M.; Chang, D.; Pathak, R.D. & Lim, S. 2002. Pedagogical Effect of Entrepreneurship Education: A Comparative study of the US, Korea and Fiji. Unpublished paper.

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discipline), and in Fiji (where the culture has been influenced by a mixture

of Western and Asian countries). The purpose of this study was to

examine the relative strength of each country's students in terms of

factors related to pedagogical effect of entrepreneurship education. To

conduct this study, data was collected for the US (91 students) at the

University of Nebraska-Lincoln, for Korea (113 students) at Kyonggi

University, and for Fiji (82 students) at the University of the South Pacific

in Fiji. Questionnaires with same contents were simultaneously

distributed in three countries. Questionnaires used in Korea were in

Korean and those used in the US and Fiji were in English. To ensure that

questions written in Korean measure the same construct, the Korean

questionnaire was translated back into English and compared with the

original one written in English. Because questionnaires were administered

during the regular class time, all of them were collected. First, factor

analysis was conducted to check construct validity of each question. Then

using factors identified, ANOVA was performed to identify if any significant

differences exist among the three country groups.

As a result of factor analyses, the following four factors were extracted

and used to measure the effects of entrepreneurship education:

(i) Intention and Confidence about Venture Creation (VC)

(ii) Knowledge of VC and Importance of Entrepreneurship

(iii) Intention of overseas VC

(iv) Team work based VC

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Results of ANOVA indicate that there is significant difference between any

two countries for all four factors. This means that the unique context of

each country has significant effect on all four factors. Based on the

results of this study, each country can provide customized

"entrepreneurship curriculum" and improve the effectiveness of

entrepreneurship education by focusing on factors identified as relatively

weak factors for each country.

Entrepreneurship education: A few Pedagogical Issues

Universities today are powerful engines of economic development and

many Universities, not only public institutions but also private ones,

consider it their new mission to foster entrepreneurship in order to

support and enhance the economic structure of the community.

In 14 of 21 countries in the GEM 2000 study, education and training was

among the top three issues identified and experts in all GEM 2000

countries were less than satisfied with the quality of both general and

entrepreneurship education in their respective countries. For example,

experts in entrepreneurship interviewed for the GEM Australia study,

regularly report that schools do not provide enough business education,

let alone entrepreneurship education. Even at tertiary level,

entrepreneurship is a very low profile subject in Australian tertiary

education (Hindle & Rushworth, 2002). However, "New Zealand rates top

in the world in how our primary and secondary schools teach creativity,

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self-sufficiency, and personal initiative. But we do poorly in teaching the

principle of entrepreneurship and the market economy" (The Bartercard

New Zealand GEM 2002 report).

The development and growth of entrepreneurship education within

universities is relatively new. Hills (1988) aptly comments that the

academic world has only recently recognized entrepreneurship as a

subject of research and teaching and that university entrepreneurship

education is in the embryonic stage. But the 1980s and 1990s have seen

an unprecedented growth in the demand for entrepreneurship education

which has been matched by a corresponding growth in the number of

courses offered by both academic institutions and by enterprise agencies

of one sort or another (Sexton & Smilor, 1997). A world wide survey of

universities and business colleges revealed over 500 'separate courses' or

subjects in entrepreneurship (Vesper & Gartner, 2001). However, the

nature, relevance, content and appropriateness of entrepreneurship

education has also been subject to increasing scrutiny in recent years. For

example, both Cheit (1985) and Porter & McKibben (1988) had identified

certain central key elements as missing from the curricula of many U.S.

business schools, in particular, those associated with MBA programmes.

One of these key elements identified as missing within business school's

curricula was the lack of focus on entrepreneurship, with, in some

instances, courses actually fostering risk-averse attitudes (Beck, 1994).

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A range of problems has been associated with the normal pattern of

entrepreneurial education (Harris et al., 2000) but two are of particular

importance. Firstly, entrepreneurship education and training continue to

emphasise the transfer of knowledge and information (Garavan and

O'Cinneide, 1994) in line with traditional university academic methods

which are inconsistent with how entrepreneurs actually learn (Gibb,

1993). It can, therefore, be argued that the development of competence

gained through small group learning methods (such as project teams,

peer exchange, individual counselling and workshops) is a more relevant

focus for entrepreneurship education (Garavan & O'Cinneide, 1994).

Secondly, a potential conflict resides between traditional academic and

entrepreneurship education. The former is based on disseminating

knowledge and truth but it may also "kill the dreams of students" (Hills,

1988, p.113) because the driving motivation of entrepreneurs is partially

based on blind faith where entrepreneurial vision is created out of

possibilities not certainties (Wickham, 1998). In entrepreneurial

behaviour research, the importance of tolerance of risk, ambiguity and

uncertainty is widely recognised (Timmons, 1994) but there is

inconsistency between this and the certainties proffered within traditional

academic programmes. That's why Gibb (1987) comments that while the

role of education is potentially very important in fostering entrepreneurial

attributes, many of the values and structures in university education are

the antithesis of entrepreneurship education.

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The pedagogical difficulties in teaching entrepreneurship arise because of

intangible qualities of successful entrepreneurship. While entrepreneurship

is a process which has been described as holistic, dynamic, unique and

sensitive to a number of antecedent variables (Hofer & Bygrave, 1992); it

is also an enigma in the sense that each of the entrepreneurial event is

unique and the entrepreneurial process is the crystallization of complex

and contingent variables. The entrepreneurial event is therefore

unpredictable and could be perceived as a phenomenon (Jack & Anderson,

1999). The basic question that we have in terms of entrepreneurship

education is, therefore, "how one can analyse and teach acts whose

nature is not yet known and whose effectiveness relies to a considerable

degree on the difficulty others have in foreseeing them." (Baumol, 1983.

p.30).

Entrepreneurial education could be considered as the structured formal

conveyance of entrepreneurial knowledge (Young, 1997), and

entrepreneurial knowledge is a concept, skill and mentality which

individual business owners use or should use. Yet the experience,

knowledge and skills may not be readily acquired through conventional

pedagogic routes (Jack & Anderson, 1999). Moreover, teaching

entrepreneurship involves both the art and the science which hinders the

use of more traditional approaches to teaching and learning. While the

use of conventional pedagogy could be made in teaching the science i.e.

functional small business management; but the art - the very nub of

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entrepreneurship, of creation and of innovation - does not appear to be so

amenable to teaching. As academics we have to accept that we cannot

directly provide or teach this skill which is fundamentally experiential

(Jack & Anderson, 1999). However, Chia (1996) emphasises that the

cultivation of the entrepreneurial imagination is the single most important

contribution that universities and business schools can and should make.

One way of doing this is to make students work in small business, thus

enabling learning by doing (Zeithaml & Rice, 1987; Gibb, 1993).

According to Robinson & Haynes (1991, p. 51), an area which needs to

be addressed is "tying academic learning to the real world" i.e. linking

pedagogical theories to actual business methods. They propose that

'mentoring' may be one such avenue. As teachers, we have to be able

to apply theory as a tool to answer student questions. "Theory produces a

critical awareness , and experience, albeit second-hand and vicarious, is

the steel to whet and hone the rougher edges of students' knowledge.

The emerging picture of the mandate for teaching entrepreneurship is one

of academic knowledge, both conceptual and analytic, as providing a

sound platform. It is from this platform that we launch our students into

the turbulent and untidy world of small business experience" (Jack &

Anderson, 1999). But unlike other disciplines, there is no safe post-

graduation training period for novice entrepreneurs. For example, while

lawyers do articles and doctors have guided internships; novice

entrepreneurs are plunged straight into a 'win or die' game.

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The theme of this conference i.e. combating inequality and exclusion in

the 21st century, therefore, calls for entrepreneurs who are not just able

to take calculated risks but who are also in a position to be creative and

innovative. This is possible when entrepreneurship is viewed in a broader

perspective than merely business and focuses on anybody's ability to act

and create in a free sense i.e. entrepreneurship as a creative process

leading to a social change. Entrepreneurship is about changing history

and creating radical social change (Spinosa et al., 1977). Also, it is

important to distinguish a broader concept of entrepreneurship from the

focus on an elite of individual entrepreneurs or as an individual brand.

Entrepreneurship is socially embedded (Sanner, 1999; Shane &

Venkataraman, 2000), and consequently every one of us should have the

ability to act in a creative way. We all do exhibit entrepreneurial skills

now and then in our lives (Spinosa et al., 1997).

While most discussion of entrepreneurship focuses on the creation of 'for-

profit businesses'; however, the phenomenon of social entrepreneurship

(people who use the techniques of business to achieve positive social

change), Government entrepreneurship (an entrepreneurial initiative that

originates with a government department or individual public servant),

and Corporate entrepreneurship or Corporate venturing or

intrapreneurship (Entrepreneurial activity in established organisations) is

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worth noting so as to have effective ways of combating problems of

inequality and exclusion in the 21st century.

Conclusion:

The advent and rapid growth of internet has made the non-linear

behaviour of the economy a fact of life. After the age of efficiency in the

1950s and 1960s, quality in the 1970s and 1980s, and flexibility in the

1980s and 1990s, we now live in the age of innovation. The old

management paradigm of exact forecasting and precise planning is no

longer tenable in the changing chaotic world. To develop new public

management policies and practices which can deal with enormous

challenges of increasing inequality and exclusion in the 21st century, we

need to be guided by the dominant management paradigm of today i.e.

creativity, innovation and entreprenueralism. The emerging role of the

enterprise today is to devote itself to the difficulties of 'economic

creativity', of change and 'innovation', and making all the decisions

necessary to stimulate their occurrence.

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Raghuvar Dutt Pathak is Professor & Head of the Department of

Management & Public Administration, School of Social & Economic

Development, The University of the South Pacific, Suva, Fiji Islands. His

current research interests include entrepreneurship, leadership,

technology management and organisational culture. He has published 3

books and 70 papers. Some of his recent publications are in journals,

such as, Journal of Engineering &Technology Management, International

Management, Thunderbird International Business Review, Journal of

Transnational Management Development , Public Organization Review: A

Global Journal .