Bounded Rationality and the Supply Side of Entrepreneurship: Evaluating Technology Entrepreneurship Education for Economic Impact

Based on the assumption that Entrepreneurship Education (E-ed) can increase the number of entrepreneurs and boost economic growth, national and local governments have invested significant resources into an E-ed economic development strategy. But how much do we know about whether E-ed really works? E-ed appears to be one of those phenomena where action and intervention have raced far ahead of the theory, pedagogy, and research needed to justify and explain it. A comprehensive review of the empirical literature concluded that while E-ed appears to be a promising tool for promoting local and national economic development, its value will remain unknown until the E-ed research community responds to the challenge to conduct higher quality and more sophisticated methodological evaluations - including more longitudinal studies, using more inferentially powerful quasi-experimental research designs, pre-measure controls for self-selection, and a defensible comparison group. This research study set out to identify/quantify differences in entrepreneurial proclivity, behaviors, and economic impacts between alumni who received E-ed and a matched control group who did not up to 14 years later. The study also attempted to shed light on the role of promising mediators like entrepreneurial self efficacy, cognitive skills and knowledge, values and attitudes, social networks, and other contextual variables on policy-relevant entrepreneurial outcomes, and tests their utility with powerful statistical tools including Structural Equation Modeling. The research applied and empirically tested a bounded rationality conceptualization of the Entrepreneurship Event (the E-Correspondence Model) and Entrepreneurship Cognition theories in order to inform evidence-based practice. In addition, the research attempted to address the methodological shortcomings found in the extant literature. Several research designs were employed because of the unique availability of some pretest data for the undergraduate group. For undergraduate alumni, the study employed a pretest-post-test matched comparison group quasi-experimental design (Shadish et al, 2002) in support of group equivalence. For graduate alumni, the study utilized a post-test only matched comparison group design. Data collection involved surveys (both email and mail) of E-ed alumni (N=2,000) and a matched (N=2,000) alumni comparison group, with 603 complete responses received. Specific measures included entrepreneurial courses respondents had taken, background data, local context, career histories and entrepreneurial intentions, activities, and accomplishments, and self-assessments along psycho and social cognitive dimensions, personality, and self-efficacy in general and in entrepreneurial tasks. Pre-measures included general entrepreneurship skills and abilities. Dependent variables included psychosocial measures typically found in similar studies (entrepreneurial intentions) as well as measures only available to longitudinal studies: 1) enterprising activities and social entrepreneurship, 2) new product/service development intrapreneurship, and; 3) business startups. Confirmatory factor analysis validated the psychometric properties of the measures employed, and regression analysis and Structural Equation Modeling (SEM) was utilized to test hypotheses that E-ed alumni created more entrepreneurial outcomes and economic impacts than matched controls. In addition SEM was used to test the overall goodness of fit of a causal model of E-ed, grounded in theory. Results supported the theorized ECorrespondence model, and showed that two of the E-ed programs evaluated created significantly more economic impacts (new businesses, new products and services) than matched controls, while one did not. The causal model’s results held up even after controlling for a rigorous battery of covariates. For those that worked it was not E-ed itself that directly produced entrepreneurial outcomes and impact. E-ed primarily produced Eoutcomes through mediating mechanisms including personal characteristics, networks, and E-self efficacy. The study concluded that technology entrepreneurship holds great promise in creating new firms, new jobs, and economic growth, and pedagogy matters. Robust andragogical approaches, (applied, relevant, problem-centered learning as opposed to the conventional lecture and case-based pedagogical approach), can in fact catalyze the entrepreneurial behaviors, activities, and enterprises that produce economic impact. Theoretical and practical implications of this research are offered for researchers, economists, educators, and policymakers.