educational entrepreneurship: what, why, and how? frederick m. hess american enterprise institute
TRANSCRIPT
Educational Educational Entrepreneurship: Entrepreneurship:
What, Why, and How?What, Why, and How?
Frederick M. HessFrederick M. Hess
American Enterprise InstituteAmerican Enterprise Institute
A New Educational A New Educational HorizonHorizon
Our education system was never Our education system was never designed to educate all children designed to educate all children
Globalization and new advances Globalization and new advances pose unprecedented challengespose unprecedented challenges
Change always entails risk–but, Change always entails risk–but, today, today, failurefailure to change holds to change holds significant risks as wellsignificant risks as well
Failure Is Not an Option…Failure Is Not an Option… … It’s a Necessity … It’s a Necessity
Innovation and entrepreneurship entail Innovation and entrepreneurship entail failure failure
But so do existing arrangements–and risk- But so do existing arrangements–and risk- aversion has repelled talent and brought aversion has repelled talent and brought stagnation stagnation
Entrepreneurial presumption: Entrepreneurial presumption: Risks of status quo outweigh those of Risks of status quo outweigh those of
reinventionreinvention Might occur inside or outside traditional systemMight occur inside or outside traditional system Might be driven by for-profits or non-profitsMight be driven by for-profits or non-profits
The Search for SecurityThe Search for Security
The “Familiarity” Trap The “Familiarity” Trap
The “Certainty” Trap The “Certainty” Trap
The “Jetsons” TrapThe “Jetsons” Trap
Reinvention Is MessyReinvention Is Messy
New challenges demand dynamic New challenges demand dynamic responses:responses: Solutions will change over timeSolutions will change over time Solutions are always untested, many Solutions are always untested, many
never “proven”never “proven” Solutions emerge from trial and error, Solutions emerge from trial and error,
not heroic prognosticationnot heroic prognostication
It’s an Uncertain World–It’s an Uncertain World–Success Isn’t PredictableSuccess Isn’t Predictable
1/3 of new firms fail in first 2 years, and 1/3 of new firms fail in first 2 years, and more than 1/2 fail within first 4 years.more than 1/2 fail within first 4 years.
In 1861, Philip Reis invented but In 1861, Philip Reis invented but abandoned telephone—finding no abandoned telephone—finding no public demand.public demand.
In 1950, Univac predicted that 1,000 In 1950, Univac predicted that 1,000 computers would be sold by 2000.computers would be sold by 2000.
Knowledge-Based Knowledge-Based Innovation Is Especially Innovation Is Especially
TrickyTricky ““Even when it is based on Even when it is based on
meticulous analysis, endowed with meticulous analysis, endowed with clear focus, and conscientiously clear focus, and conscientiously managed, knowledge-based managed, knowledge-based innovation still suffers from unique innovation still suffers from unique risks and, worse, an innate risks and, worse, an innate unpredictability.”unpredictability.” Peter Drucker, Peter Drucker, Innovation and Innovation and
Entrepreneurship Entrepreneurship (1985: 120).(1985: 120).
Uncertainty in the World Uncertainty in the World of Ideasof Ideas
8,000+ new publishers enter market 8,000+ new publishers enter market every yearevery year
120,000 to 150,000 new books published 120,000 to 150,000 new books published a yeara year
5 publishers control 80% of book sales, 5 publishers control 80% of book sales, but 78% of but 78% of titlestitles are published by smaller are published by smaller competitorscompetitors
Books passed up by major publishers Books passed up by major publishers include include Harry Potter and the Sorcerer’s Harry Potter and the Sorcerer’s StoneStone and and The Hunt for Red OctoberThe Hunt for Red October
Entrepreneurship Involves Entrepreneurship Involves Throwing a Lot of DartsThrowing a Lot of Darts
Many creative problem-solvers working Many creative problem-solvers working under intense pressure create multiple under intense pressure create multiple solutionssolutions
TFA, KIPP, SEED, New Leaders for New TFA, KIPP, SEED, New Leaders for New Schools, The New Teacher Project, Schools, The New Teacher Project, Edison, National Heritage Academies, Edison, National Heritage Academies, Big Picture Co., Green Dot, High Tech Big Picture Co., Green Dot, High Tech High, etc. are important not as “right” High, etc. are important not as “right” answers, but as models of this processanswers, but as models of this process
Number of Venture Capital Number of Venture Capital RecipientsRecipients
0
1000
2000
3000
4000
5000
6000
7000
8000
9000
2000 2002
TotalEarly-Stage
Source: Money Tree SurveySource: Money Tree Survey
Entrepreneurial Activity Entrepreneurial Activity in 2004in 2004
0%2%4%6%8%
10%12%14%16%18%20%
U.S. France Slovenia Educ,Health, &Soc ServSector
% of workersstarting ormanaging newbusinesses
Source: Journal of Developmental Entrepreneurship, August 2004Source: Journal of Developmental Entrepreneurship, August 2004
Federal R&D Commitment Federal R&D Commitment in 2004in 2004
0
5
10
15
20
25
30
Nat'l Instof Health
Inst ofEduc
Sciences
in billions of dollars
Entrepreneurship Isn’t Entrepreneurship Isn’t About “School Choice”...About “School Choice”...
Markets aren’t just about making Markets aren’t just about making choiceschoices
Markets are fueled by “creative Markets are fueled by “creative destruction” – new approaches emerge, destruction” – new approaches emerge, dated ones disappeardated ones disappear
Markets can be dynamic– or notMarkets can be dynamic– or not Of 25 biggest French firms, 0% founded Of 25 biggest French firms, 0% founded
since 1965 since 1965 Of 25 biggest U.S. firms, 76% founded since Of 25 biggest U.S. firms, 76% founded since
19651965
……It’s About Creating New It’s About Creating New SolutionsSolutions
Much creative energy is focused on Much creative energy is focused on EMOsEMOs But this is just one of an array of optionsBut this is just one of an array of options
Money can be packed in more nimble Money can be packed in more nimble streamsstreams
Services can be configured differentlyServices can be configured differently
Key Barriers to Key Barriers to Entrepreneurial ActivityEntrepreneurial Activity
Lack of capitalLack of capital Barriers to entryBarriers to entry Talent pipelineTalent pipeline InfrastructureInfrastructure
Key Research Questions Key Research Questions
What does world of educational entrepreneurship What does world of educational entrepreneurship look like?look like? How does it vary inside-outside district, with for-profit How does it vary inside-outside district, with for-profit
status?status? What motivates entrepreneurs?What motivates entrepreneurs? What tools do entrepreneurs need?What tools do entrepreneurs need?
What policies or practices impede entrepreneurship?What policies or practices impede entrepreneurship? What are their costs?What are their costs? What are the virtues of current arrangements?What are the virtues of current arrangements? How might barriers be lowered - and what are perils of How might barriers be lowered - and what are perils of
doing so?doing so?
Entrepreneurship as a Lens Entrepreneurship as a Lens for Viewing Reformfor Viewing Reform
What do various voucher or charter What do various voucher or charter proposals look like if we focus on proposals look like if we focus on entrepreneurship?entrepreneurship?
What do regulations of principal or What do regulations of principal or teacher licensure and compensation teacher licensure and compensation look like?look like?
What do NCLB provisions look like?What do NCLB provisions look like?
Educational Educational Entrepreneurship: Entrepreneurship:
What, Why, and How?What, Why, and How?
Frederick M. HessFrederick M. Hess
American Enterprise InstituteAmerican Enterprise Institute