Transforming Entrepreneurship Education: The Case Of Virtual Enterprise
Monday, February 7, 2011
Posted by: Matthew Montoya
By Dr. Anthony Borgese
City University of New York-Kingsborough Community College, Brooklyn, NY
At Kingsborough Community College,part of the City University of New York, entrepreneurship professors allow students to learn the tools of the entrepreneur through a multi-faceted approach. First, students create their own businesses through a variety of methods. Some professors utilize the $10 business. This is a method wherein students are given $10 to create their own micro-businesses. These student businesses tend to become resellers of existing products such as cakes or water. Other professors require students to start their own E-Bay based businesses. These businesses are usually bartering type businesses, or students finding things in their parents' garages and attics and reselling them online. While both of those methods are great ways to teach entrepreneurial skills, Kingsborough transformed business education by creating its own program called Virtual Enterprise.
What is Virtual Enterprise?
Virtual Enterprise is a unique, experiential-learning methodology wherein students create and operate their own virtual businesses in a global economy of over 4,000 firms in 40 countries. Pierce and Jones, (1998) found that students engaged in contextual learning are more motivated, use self-directed methods aimed at acquiring in-depth understanding and have superior long-term recall compared to students involved in more traditional teacher-led activities. This is one of the foundations for Virtual Enterprise.
With VE students create a business concept and then implement the plan within the confines of the IVE Global Marketplace. Once students choose the type of business they wish to operate, they create a business plan, estimate start-up costs, and make an oral presentation to investors from the local business community for virtual start-up capital.
After the venture capital presentation is made, CUNY's Institute for Virtual Enterprise provides virtual seed money to the VE firm along with a corporate bank account. VE students use that seed money to pay bills, make inventory purchases and start to operate their virtual businesses. They learn the financial aspects of running a business by doing it, as opposed to just learning the theories behind financial management and regurgitating them on a written exam.
What makes VE more effective than other experiential learning methods is its global marketplace and the financial aspects of its MarketMaker component. (www.ivefinancial.com) The MarketMaker is the virtual economy behind VE methodology; its educational, electronic, financial teaching tools make VE courses truly unique. It consists of a virtual bank, a virtual stock market, virtual credit cards and a virtual ecommerce shopping mall. The virtual bank simulates a real banking environment. Students gain valuable cash flow management skills and learn about lines of credit, payroll and other banking aspects of running a business.
The virtual credit card allows students to learn the skills of using credit properly. Virtual business credit cards are offered to virtual enterprise firms to make purchases and pay bills. Finally, the IVE Shopping Mall allows students to trade their virtual products in a global electronic marketplace. After receiving the initial seed money to start a new VE firm, students can upload their products to the IVE Shopping Mall. The IVE Shopping Mall is a global electronic commerce marketplace for all virtual enterprise students and firms worldwide. VE is an international program with students participating around the world. This provides another learning moment, as students have to learn how to deal with different languages and cultures as part of international trading within the VE marketplace.
Besides learning the financial aspects of running a business, students also learn the sales, budgeting, negotiation, human resources, and technology skills of running a business. For example, marketing plans have to be created and implemented. This includes creating advertising, estimating sales goals, as well as uploading products to the IVE Shopping Mall to sell or trade products. VE students learn a variety of communication skills by negotiating with suppliers or becoming human resources employees and working as the intermediaries between employees and management within the VE firm.
Funding and Awards
The earliest funding of VE methodology, outside of CUNY, came from corporate sponsorships. Corporations that mirrored the VE firms started by VE students were more than happy to provide monetary and in-kind funding to IVE. In addition, Kauffman and Coleman funding was obtained after various presentations at USASBE and National Association for Community College Entrepreneurship (NACCE) conferences. All of this funding was a windfall for IVE, but the major funding was yet to come.
The first major funding for Virtual Enterprise based methodology dissemination was called: Project Welcome. (http://www.kbcc.cuny.edu/announcement/project_welcome.html ) A $1.6 million grant was was awarded under the President's Community Based Job Training Grants, as implemented by the U.S. Department of Labor's Employment and Training Administration. Project Welcome's purpose was to train students in Hospitality and Food Service Operations. The curriculum employed was a variety of Virtual Enterprise courses. Students learned hospitality and food service operations through VE courses. The program lasted three years and remains in existence, despite the original funding being depleted.
After this promising start, VE methodology continued to receive good-sized grants. A $139,000 grant was awarded by the New York State Department of Labor to train dislocated youth in "green” technology and urban agriculture. This program was also endorsed by the National Conference of Workforce Educators as the basis for national community college groups to start a "best practices in green” education curriculum. Again, VE methodology was the basis for the educational component of this program.
Finally, a $750,000 NSF grant in STEM education was awarded to IVE to infuse business and entrepreneurship into STEM disciplines. (http://www.ive.cuny.edu/viewarticle.php?sid=147 ) IVE had bought its own "entrepreneurship across the curriculum” initiative a number of years previous, so having been awarded a grant to bring entrepreneurship skill sets to non-business students was a natural evolution for IVE. Virtual Enterprise courses were offered in a variety of academic disciplines, but were most prevalent in career programs where VE courses became a major part of teaching the business side of the program.
All of these funding opportunities allowed for the proliferation of Virtual Enterprise methodology into a variety of colleges and universities academic, career and business programs. It also led to a variety of "contract” education programs for IVE. The latest "contract” education contract was for $600,000 to train hospitality and food service workers in Brooklyn's Coney Island. Like Project Welcome, students in this program will learn business skills by taking Virtual Enterprise courses and then apply those skills by working in the newly revitalized Coney Island.
Professional conferences, like the United States Association for Small Business and Entrepreneurship Annual Conference (USASBE), allowed IVE administrators to present their findings and "get the word out” about this transformative way of teaching business. No greater accolade for Virtual Enterprise could have been received other than USASBE's Innovative Entrepreneurship Course Award at USASBE's 2008 Annual Conference. (http://usasbe.org/about/awards/education.asp#course ) Virtual Enterprise methodology received the award and was finally recognized as being truly innovative by administrative bodies outside of CUNY and grant funding agencies.
Student Cohorts Served
Since its inception, Virtual Enterprise courses have been introduced to a variety of student cohorts. For example, VE is offered to students in the "My Turn” Program at Kingsborough. This program allows students over the age of 55 to take courses, free of charge, on a space available basis. My Turn students love the program because VE courses allow them to socialize as well as learn business skills they previously did not have. A small Coleman grant supported this endeavor, and created many senior-aged entrepreneurs. Most of these students wound up creating their own E-Bay based businesses because the VE courses gave them the confidence to believe they could succeed.
The Virtual Enterprise program has also been administered in over 40 countries, and the amount of international collaboration is growing. Each year, the Institute for Virtual Enterprise holds a Virtual International Trade Show. At the trade show, VE firms make real sales pitches via teleconference. Students from around the world make their sales pitches; then time is given for the students to buy and sell their products. (At the last iteration of this conference VE firms from Australia, Ghana, Belgium and Austria participated. (http://ive.cuny.edu/viewarticle.php?sid=154 ) Obviously, this is not an easy feat to accomplish due to time zone differences and language barriers. However, the videoconferences build student presentation skills, and communication skills in general, as they have to learn how to overcome those barriers to sell their products.
Educators who are interested in the methodology can go online at: http://www.ive.cuny.edu to view some of the activities and initiatives associated with Virtual Enterprise. A teaching tool kit is available for all professors that utilize Virtual Enterprise methodology. Instructors collaborate with a VE staff member to facilitate access to the various tools such as The MarketMaker financial software, the online shopping mall, and the banking program. VE instructors then allow their students to research the VE marketplace and create their own virtual businesses.
For anything to be transformative, by definition, it must change something dramatically. The old way of teaching business courses is a recipe for failure for our students. There is a 1996 quote from D.H. Hammond et al that states: "Many professors still require students to memorize their course materials and then complete closed-book examinations. We could find no record of a business meeting in which the CEO said, 'Please put all your books and notes under the table and take out a clean piece of paper; we are going to make a business decision.'”
This quote remains the inspiration for Institute for Virtual Enterprise administrators to bring VE methodology worldwide. Business should not be a discipline that requires students to memorize and regurgitate facts and theories. Business is learned by doing. This is true just as much for failing businesses as well as successful businesses. Sometimes, VE students learn more through what they did wrong as they do from what they did right.
The Institute for Virtual Enterprise will continue to profess the benefits of Virtual Enterprise methodology. IVE's successes are clear that VE methodology works. From funding, to awards, to faculty development, to the creation of well-prepared business students, Virtual Enterprise is truly a transformative teaching methodology.
Pierce, J. W., & Jones, B. F. (1998). Problem-based learning: Learning and teaching in the context of problems. In Ohio State University College of Education and Bowling Green State University, Contextual teaching and learning: Preparing teachers to enhance student success in and beyond high school. Information Series, No 376. (pp. 75-106). Columbus Ohio: ERIC Clearinghouse on Adult, Career and Vocational Education, pp. 75-106.
Academic Innovations web site. All data retrieved on September 16, 2010, from: http://www.academicinnovations.com/report.html
The Institute for Virtual Enterprise web site. All data retrieved on September 16, 2010, from: http://www.ive.cuny.edu/
Kingsborough Community College Project Welcome Web site. All data retrieved on September 16, 2010, from: http://www.kbcc.cuny.edu/announcement/project_welcome.html
The United States Association for Small Business and Entrepreneurship Web site. All data retrieved on September 16, 2010, from: http://usasbe.org/about/awards/education.asp#course
Various Institute for Virtual Enterprise Web sites. All data retrieved on September 16, 2010, from: http://ive.cuny.edu/viewarticle.php?sid=154, http://ive.cuny.edu/leadership/aup.phphttp://ive.cuny.edu/sustain/, http://www.ive.cuny.edu/viewarticle.php?sid=147