Entrepreneurship professors, myself included, often wonder about the path that leads students from the classroom to business ownership. Dr. Chad Moutray, the Chief Economist of the Office of Advocacy of the U.S. Small Business Administration analyzed data from the U.S. Department of Education that sheds some light on this process.
As you might expect, Dr. Moutray found that students who said that owning their own businesses was important to them were more likely than other students to be self-employed ten years later.
But only a relatively small portion of students who say that being an entrepreneur is important to them end up owning a business ten years later – 39.8 percent according to the survey. Stated differently, 60.2 percent of students who felt that owning their own business was important to them when they were in college weren’t business owners a decade after graduation. That’s a lot of people who said they wanted to be in business for themselves who didn’t become entrepreneurs.
It’s also interesting that only a small percentage of those who were self-employed in 2003 were self-employed six years earlier – only 19 percent, according to the survey. So even the students who might have appeared to be entrepreneurial types in college weren’t self-employed both four and ten years after graduation.
And what is it that the entrepreneurs studied when in school to prepare themselves for their vocation? It wasn’t the things that most people talk about. Students who majored in business and management and engineering and math and science were less likely to be self-employed and more likely to work in a for profit company run by someone else, while people with social science majors were more likely to be self-employed.
It seems that predicting which of your college friends will be running his or her own business at your ten year college reunion isn’t so easy to do on the basis of their desire to run a business or their choice of a business major.
* * * * *
About the Author: Scott Shane is A. Malachi Mixon III, Professor of Entrepreneurial Studies at Case Western Reserve University. He is the author of nine books, including Fool’s Gold: The Truth Behind Angel Investing in America ; Illusions of Entrepreneurship: and The Costly Myths that Entrepreneurs, Investors, and Policy Makers Live By.