Entrepreneurship Alumni Outpace Peers in Business World

Diana Hunter
Sept. 12, 2000

A new study reveals that entrepreneurship programs started by alumni lead to more new businesses, develop more products and are more likely to be involved in high-technology endeavors than their peers.

The study conducted by the Eller College of Business and Public Administration at the University of Arizona (UA) in Tucson and the Kauffman Center for Entrepreneurial Leadership, Kansas City, Mo., further reveals that alumni of entrepreneurship programs make more money and their firms grow more rapidly, relative to other business school alumni. The study is the first of its kind to analyze the impact of entrepreneurship education, which over the past 15 years has grown dramatically in the United States and internationally. The findings were announced at a presentation at the Academy of Management's annual meeting held recently in Toronto.

Although the study focused on a comparison of graduates of the University of Arizona's Eller College of Business and Public Administration and alumni of UA's Berger Entrepreneurship Program, UA economic researcher Alberta Charney, and Gary D. Libecap, who heads the Berger Entrepreneurship Program, are confident that their methodology can be used as a template for other universities to evaluate their entrepreneurship programs.

Charney and Libecap surveyed 2,484 Eller College alumni, including 460 who graduated from the Berger Entrepreneurship Program. The response rate was about 21 percent of 511 alumni, including 105 entrepreneurship graduates, who completed and returned the six-page questionnaire. Also surveyed were department heads and other administrators from the University of Arizona (including the Office of Technology Transfer) and the UA Foundation, and the Eller College dean, Mark Zupan.

Key findings

Compared to other business school alumni, entrepreneurship graduates:

  • Are three times more likely to start new businesses. The study found, after controlling for personal and environmental factors, that "entrepreneurship education increased the probability of being instrumentally involved in a new business venture by 25 percent."
  • Are three times more likely to be self-employed. They are more likely to be employed full time and less likely to work for the government or nonprofit entities.
  • Have annual incomes that are 27 percent higher and own 62 percent more assets. Researchers Charney and Libecap found that after controlling for personal characteristics, entrepreneurship education increases the annual income of graduates by more than $12,000. They also calculate that entrepreneurship graduates working for large firms earn about $23,500 more annually than their counterparts.
  • Are more satisfied with their jobs.

"There has been relatively little research conducted on the impact of entrepreneurship education," said Michael Camp, director of research at the Kauffman Center for Entrepreneurial Leadership. "This study goes well beyond any other analysis of its kind and underscores the advantage of entrepreneurship education - for both graduates and the companies they lead or work for."

The Berger Entrepreneurship Program, approved by the University of Arizona Board of Regents in 1983, is one of the oldest such programs in the country. Housed in the Karl Eller Center at the Eller College of Business and Public Administration, the program has graduated 594 undergraduate and graduate students since 1985. For more information visit the Eller College of Business and Public Administration web site.


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