Why universities must embrace entrepreneurship

Analysis by Professor of Entrepreneurship Rod McNaughton, University of Auckland, Waipapa Taumata Rau.

As universities consider their future in the 21st century, many are embracing the concept of “innovation” in their strategic plans.

According to Harvard Business School, innovation is “a product, service, business model or strategy that’s both novel and useful”.

By focusing on innovation, universities are attempting to position themselves as drivers of progress – as institutions that generate knowledge and apply it to solve the world’s most pressing problems.

But here’s the catch: fewer universities embrace “entrepreneurship” similarly, despite it being the critical bridge between innovation and real-world impact.

Innovation vs entrepreneurship

It’s easy to see why universities are more comfortable with innovation.

Labs, research centres and academic programs encourage pushing the envelope in a relatively risk-free setting.

Original research is one of the requirements of completing a doctorate. This means universities feel like hubs of cutting-edge thinking, even if the innovations never leave the confines of the campus.

However, entrepreneurship requires something different. Those with an idea also have to understand how to navigate the messy realities of bringing it to fruition.

Entrepreneurship demands the skills to manage people and resources, assess viability, identify pathways to adoption, and understand the environment while being comfortable with uncertainty and resilient in the face of failure and change.

Fostering an entrepreneur mindset in academics

Understanding the distinction between innovation and entrepreneurship is critical. Innovation often begins by assuming no constraints and imagining a world of possibility.

But entrepreneurship assumes resources are scarce and that success depends on overcoming obstacles and working with what’s available. While innovation can happen in isolation, entrepreneurship needs community, collaboration, feedback and constant adaptation.

Entrepreneurial skills are valuable for students at all levels and any discipline. But the entrepreneurial process can be especially helpful for researchers and PhD students who have spent years developing an idea but not a way to get it into the real world.

Bridging the gap

Globally, there is a growing gap between the number of doctoral graduates and academic jobs.

Programs such as the ones run by the University of Auckland Business School’s Centre for Innovation and Entrepreneurship (CIE) (which I am involved in), are teaching how to identify opportunities and navigate resource constraints through mentoring, workshops and hands-on projects.

While some find opportunities to commercialise their research, others pursue policy changes or social ventures.

One good illustration of this is Kate Riegle van West’s doctoral research. Riegle van West examined the benefits of poi for the health of older adults. Supported by CIE’s programs, she launched SpinPoi, a social venture dedicated to working with poi to improve health and well being.

Since its founding, CIE has helped start more than 279 ventures and provides entrepreneurial experiences to more than 7,500 students and staff across the university each year.

Similar programs exist at other universities, but much more needs to be done to scale up the development of entrepreneurial skills within universities.

Overcoming resistance

Universities have been slow to prioritise developing an entrepreneurial mindset among students and staff.

Innovation without entrepreneurship is like building a bridge halfway. You may have a brilliant idea, but it is unlikely to make a meaningful impact without the skills to bring it to reality. Entrepreneurship transforms creative ideas into valuable, tangible outcomes.

But there are challenges. “Innovation” is more palatable to some academics, especially those who equate entrepreneurship with commercialism. To overcome this, it’s crucial to recognise that entrepreneurial skills are valuable across most endeavours.

Skills like opportunity recognition, resource allocation, and risk management are critical for starting businesses. But they are also highly valued within existing organisations and for leading teams and driving change in any sector.

Staff and students may not immediately see the relevance of entrepreneurship to their discipline or career aspirations, thinking entrepreneurship is only for those in business or the sciences.

Yet there is a growing need for entrepreneurial skills to bridge the gap between academic expertise and application from students in all disciplines.

At the doctoral level, developing these skills can help ensure research has wider impact, and create opportunities for these researchers once they graduate.

It’s not that innovation isn’t useful – it’s essential.

Many industries and organisations rely on innovation to improve efficiency, create new products, and solve complex problems. In some professional contexts, an innovation mindset may be more relevant than an entrepreneurial one.

But to truly contribute to solving societal problems and prepare their students to make a difference, universities must do more than foster innovation. They must prioritise and develop an entrepreneurial mindset and competencies among students and staff, enabling them to execute, adapt and create lasting impact.