When Truthiness Prevails

Entrepreneurial education for kids won’t work
May 1, 2014

Truthiness, a term coined by U.S. pop culture icon Stephen Colbert, refers to a personal opinion or belief that must be true, not because of the facts or data, but because you can feel it in your gut. In watching the launch of Manitoba’s new Building Futures curriculum, one can’t help but note its truthy origins.

The Building Futures project for Grades 4 to 10 was developed by the province’s department of education in partnership with the Canadian Foundation for Economic Education (CFEE), and is partly funded by the Investors Group, whose logo features prominently on all promotional material.

According to the website, Building Futures “aims to integrate a basic economic and financial education into the Manitoba curriculum,” and “to help teachers develop students’ enterprising skills.” Manitoba’s Minister of Education James Allum says the program will help meet “our commitment to providing high quality economic and financial education to children and youth.” He stresses it “will reflect a rapidly changing marketplace.”

It’s not just Manitoba jumping on the K-12 entrepreneurial bandwagon. CFEE President Gary Rabbior claims to be in talks with other provinces to roll Building Futures out across the country. It would join other Canadian entrepreneurship initiatives underway including the Aboriginal Youth Entrepreneurship Program (AYEP), Ontario’s Specialist High Skills Major, the Young Entrepreneur Make Your Pitch contest (run jointly by Ontario’s Ministry of Economic Development and the Ontario Centres of Excellence to support the province’s Youth Jobs Strategy), British Columbia’s Young Entrepreneurship Leadership Launchpad and Okanagan Valley Entrepreneurship Strategy, and New Brunswick’s Youth Entrepreneurship Camp and Youth Entrepreneurship Challenge.

Why all this interest in B-school for kids? Youth entrepreneurship programs are touted as a solution to Canada’s high youth unemployment rate (see Armine Yalnizyan on page 16), a means to bolster economically depressed regions, and a solution to the ill-defined “changing marketplace” facing youth. A National Post headline about entrepreneurial education even suggested it could be “A cure for youth joblessness.” Many politicians and journalists say it willtake care of Canada’s lackluster education ranking in EY’s G20 Entrepreneurship Barometer.

The reasoning goes something like this: because small businesses represent 98 per cent of Canadian companies, produce 30 per cent of GDP, and account for 45 per cent of employment, promoting entrepreneurship would result in more small businesses start-ups, higher GDP and lower unemployment. This entrepreneurial economy, says one proponent, has to be built “slowly and carefully, brick by brick, and each one of those bricks is a young entrepreneur.”

It’s apparently quite simple. If you teach entrepreneurialism from Kindergarten to Grade 12, students will naturally learn it, retain it and then apply it when starting new businesses years later. Two Canadian premiers believe in their guts that this is true. Ontario’s Kathleen Wynne argues that “building creativity and entrepreneurship needs to start well before high school,” and New Brunswick’s David Alward announced his government’s priority is “to develop entrepreneurship among young people in the province” at the launch last year of a K-12 French-language entrepreneurship curriculum.

The arguments may sound compelling, even luxurious in their simplicity. Here’s the truthy part of the story: there is no reason to believe that entrepreneurial education works. In fact, common sense and research suggests it is not very effective.

First of all, the logic behind programs like Building Futures requires a high proportion of young learners to retain what they are told by their teachers. If only this were the case!

Think back to everything you learned between Kindergarten and Grade 12. How much do you still remember? If you’re anything like me, it’s probably not that much. It would be the same case for entrepreneurship education. Beyond the simple issue of remembering facts, research on the integration of career learning and business concepts among younger learners calls into questions its developmental appropriateness.

Assuming learners recall what they’re told in grade school, they then have to apply it in the desired way, namely by starting a new business. But research shows entrepreneurial education is not especially important in leading to business start-ups or the intention to start businesses in the future. Relatively recent large-scale research involving pairs of identical twins seems to suggest that genetics and personality play a significant though not exclusive role in entrepreneurial action — something that education cannot alter.

Next, there is the claim that once youth learn about entrepreneurship, and apply that miraculously retained knowledge to start a business, the successful new self-employment will solve Canada’s high youth unemployment problem. That would certainly feel good (in the gut) but the reality is more complicated.

Given that between two-thirds and one-half of Canadian businesses fail in the first five years of operations, many new entrepreneurs (and their employees) will find themselves among the ranks of the unemployed despite their best efforts. Even among those businesses that survive, most entrepreneurs do not look like the wealthy captains of industry conjured up to pitch entrepreneurial learning. Statistics Canada reports that the median income of Canadian entrepreneurs is about 19 per cent lower than those employed by other people or companies, and as a group entrepreneurs work longer hours for less pay.

It is also true that last-ditch entrepreneurship (i.e. starting a business to escape unemployment) doesn’t help much. According to a 28-year study spanning 23 OECD countries, high unemployment rates can lead to more entrepreneurial activity, known as the “refugee effect.” However these start-ups do not effectively reduce unemployment compared to “entrepreneurial effect” start-ups — companies established while unemployment is already low. Canada’s move to introduce youth entrepreneurship programs to address unemployment is a “refugee effect” tactic.

What does all this research tell us? It strongly suggests that entrepreneurial education’s alleged value is more truthiness than truth. Canadians need to challenge the straw man arguments our politicians, business groups and media are using to promote these curriculums.

The Building Futures project in Manitoba, like other K-12 financial education and entrepreneurial programs across Canada, draw attention away from more important problems such as the changing nature of work, the creation of meaningful work for the young, and social justice. The real danger of entrepreneurial education is that it locates problems in individuals and schools rather than government policy, and the failure of businesses in Canada to generate meaningful jobs with opportunities for success.

Laura Elizabeth Pinto is a faculty member at the University of Ontario Institute of Technology’s Faculty of Education and recipient of a 2009 Governor General’s Gold Medal. Her book, Curriculum Reform in Ontario: ‘Common Sense’ Policy Processes and Democratic Possibilities (University of Toronto Press, 2012) was recently short-listed for the Speaker’s Book Award.