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Education and U.S. Entrepreneurship

Policy Dialogue on Entrepreneurship, PDE

Developing the human capital of young Americans is vital to keep America’s entrepreneurial economy growing. Our future entrepreneurs and their workers need the twenty-first century skills and knowledge to create successful ventures and to spur innovation in the economy. Yet education in the U.S. is struggling to stay competitive and fails to provide access to a quality educational experience for all students. Developing tomorrow’s talented, capable innovators is a challenge that will require major, entrepreneurially-driven improvements in education from pre-school through graduate school.1

Falling Short of Potential

  • One in four public high school students in the U.S. do not graduate.
  • Among high school graduates, only 17 percent are considered proficient in mathematics.2 
  • U.S. 15-year-olds placed 19th in science literacy and 24th in mathematics in a study involving 49 industrialized countries in 2003.3
  • 1 in 20 U.S. college students major in engineering, much lower than other developed countries.

Absent Entrepreneurship

  • America’s greatest educational advantage is its university system. It has developed as a mass market over the last century where each student has an overwhelming range of choices, fostering a world-class range of innovative universities that truly lead the world.
  • The system of U.S. K-12 public education does not have an entrepreneurial structure, in sharp contrast to university education. Consequently, there is a great deal of innovation at the university level, with new providers and educational forms constantly appearing. While innovators can be found in selected public school districts, virtually all of them operate as top-down hierarchies where revenue flows from the center, not from consumers.4 
  • Pre-K education in the U.S. is not centrally organized, making it open to entrepreneurial innovation. However, there is very little public financing at this level, so the market is underdeveloped.
  • Curriculum at all levels almost ignores teaching about the role of entrepreneurship – in fostering growth economics, in pioneering inventions that shaped U.S. history, and more. The study of entrepreneurship has been largely sequestered even at the university level as an MBA specialty.5 
  • In K-12 education there are a hundred different approaches to entrepreneurship education available, but these are not widely utilized.6 

Pro-Growth Policy Action

Promote entrepreneurship in education.

  • Education leaders at all levels should be allowed and indeed encouraged to embrace entrepreneurial leadership and authority. More attention should be placed on improving the pipeline of entrepreneurial people entering the education landscape.
  • More experimentation and transparency with an emphasis on quality, not more standards and testing, is the most efficient path to educational improvement.
  • Embrace new public “charter schools” and education service providers by relaxing regulation and rectifying funding imbalances vis-à-vis other public schools, which stifle the ability of charters to respond to community demands. There should not be limits on the number of charters in a district.
  • Provide better financial incentives to attract and train math and science teachers (especially in low-performing schools), including those workers with expertise in these areas who would like to teach.  Also, encourage schools to the use new technologies including gaming and other software for teaching.
  • Emphasize the study of the role of entrepreneurship in the American economy. Infuse entrepreneurial skills (e.g., opportunity-recognition and risk-taking) for all students, not just those in graduate business schools.


1  The Kauffman Foundation. On the Road to an Entrepreneurial Economy: A Research and Policy Guide. 2007.
2  U.S. Department of Education. A Test of Leadership: Charting the Future of U.S. High Education. 2006.
3  National Science Board. Science and Engineering Indicators 2008. National Science Foundation. 2008.
4  The Future of Educational Entrepreneurship: Possibilities for School Reform.  Frederick M. Hess editor, Harvard Education Press, Cambridge, MA., 2008
5  The Kauffman Foundation. On the Road to an Entrepreneurial Economy: A Research and Policy Guide. 2007.
6  Unfortunately, the contribution of any particular youth EE model to the development of entrepreneurship, or to positive youth development more generally, cannot currently be evaluated in a scientifically satisfactorily manner. See Damon, William and Richard M. Lerner.  Entrepreneurship Across the Life Span:  A Developmental analysis and Review of Key Findings. The Kauffman Foundation. 2008
7  U.S. Department of Education. A Test of Leadership: Charting the Future of U.S. High Education. 2006.

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