Undergraduate Student-Run Business Development Services Firms

[We’re pleased to welcome authors Peter G. Delaney of Washington University in St. Louis, Ken Harrington of the Bayberry Group, Emre Toker of Arizona State University. They recently published an article in Entrepreneurship Education and Pedagogy entitled “Undergraduate Student-Run Business Development Services Firms: A New Educational Opportunity and Growth Alternative for Small and Medium Enterprises,” which is currently free to read for a limited time. Below, they discuss the inspirations and findings of this research.]

Growth of alternative work arrangements comprised 94% of jobs created in the US since 2005, indicating an unprecedented shift in workforce composition away from traditional work arrangements. This shift is characteristic of the expansion of the gig economy and requires innovative teaching models to prepare undergraduate students for the changing scope of work to come, as young people face the prospect of “portfolio” careers, including periods of paid employment, non-work, and self-employment.

In an attempt to catch up to changes in the workforce, colleges and universities are expanding entrepreneurial education programs across the country focused on innovation and entrepreneurship (I&E) but are hamstrung by doing so in extremely structured environments. Colleges and universities are not grooming students for uncertainty while relying on a “causation model” that teaches goal-driven, deliberate models of decision-making.

But who can fault them? Students paying tuition expect to be guaranteed learning experiences and therefore do not have to face the uncertainty of entrepreneurial experiences when they are presented with well-coordinated, faculty-directed programs. Authentic exposure to the market is limited, student expectations are misguided, and an ability to tolerate risk is underdeveloped, suggesting classroom environments may not be the best place to learn entrepreneurship. A “causation model” of decision-making stands in contradiction to the hard reality students face after graduation.

Principles based in “effectuation theory,” first introduced by Saras Sarasvathy in 2001, are more appropriate in settings characterized by greater levels of uncertainty, like job markets for recent graduates. Importantly, effectuation teaches students to begin with general aspirations and subsequently satisfy them using resources at their immediate disposal, like their knowledge and connections. Without clearly envisioned steps toward a solution, students remain flexible and can take advantage of “environmental contingencies” as they arise, a particularly useful skillset for students beginning careers.

This paper integrates effectuation-driven educational opportunities to propose how students can gain valuable work experience prior to graduation, not through university skills courses, but as participants in the new workforce through the Bear Studios model working with small and medium enterprises, supporting the development of a new pedagogy of entrepreneurship education. As a learning innovation, this paper describes how to structure the firm in the space between students, the university, and the regional community.

Bear Studios, an undergraduate-run firm, is exclusively student-directed and has been able to provide talented undergraduates with opportunities to freelance and provide startups and small and medium enterprises business, design, technology, and accounting services and solutions. Clients have included major universities and national healthcare systems, regional software and biomedical companies and nonprofits, as well as small and medium enterprises. Students must manage business relationships, without university administrative coordination, leveraging students’ innovative mindsets and diverse skillsets to give clients a cost-effective alternative to the traditional consultancy, design, development, or accounting firm. In turn, students experience and adapt to a wide variety of diverse businesses at different stages in their life cycles, and through this exposure learn flexibility. These immersive, authentic experiences prepare undergraduate students for the future, preparing them for post-graduate life in a rapidly changing workforce and world.

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