Development and initiation of an online master of science degree in economic development and entrepreneurship.

Summers, David F. ; Holm, James N. ; Summers, Cynthia A. 等

INTRODUCTION

The primary foundation of economic development is based on the "three legged stool" of starting new businesses (entrepreneurship), growing and expanding existing businesses, and attracting outside businesses to a community, region, state, or nation (Swager, 2000). In addition, starting, growing and expanding, and attracting businesses to an area must be supported by environments that provide the capacity to support business growth. The ultimate goal of economic development is more than business growth, however. It is to provide a higher quality of life to all citizens (Swager, 2000).

It is becoming clear that the traditional economic development notion of chasing new industry to come to an area is giving way to the realization that entrepreneurship is a vital part of economic growth (Baumol, 2005: Baumol, 2004; Drabenstott, 2005; Formaini, 2001; Holcombe, 2003; Walzer & Athiyaman, 2007). In addition, business attraction and entrepreneurial activity are facilitated by business supportive communities (Markley, Macke, & Luther, 2005). Consequently, current economic development is a combination of traditional firm attraction, the innovative creativity of entrepreneurial activity, and a healthy dose of community development. Using the "three legged stool" model of economic development and responding to a call by Donald Iannone (1995) for higher education to become involved and work more closely with economic development professionals, the University of Houston-Victoria (UHV) developed and implemented a Master of Science in Economic Development and Entrepreneurship (MSEDE) degree.

An extensive search of existing graduate programs found award-winning graduate entrepreneurship degree programs, such as the ones at the Kelley School of Business at Indiana University and the program at Western Carolina University, or quality programs focusing on economic development, such as the University of Southern Mississippi program, but no program was found that formally combined both economic development and entrepreneurship. This is not to say entrepreneurship is not part of quality economic development programs or economic development is ignored by entrepreneurship programs. It is just that no program was found that had both on an equal footing. Considering the emerging "three legged stool" model, UHV - through its School of Business Administration - created and implemented a program that equally integrates entrepreneurship and economic development into a single, unified course of study. The combined program takes a holistic view of the contemporary economic development model. The final unique feature of the program is that it is delivered totally online.

This paper describes the process used to develop the program and the structure of the program that emerged from the process. The program was formally approved by the Texas Higher Education Board in the summer of2006 with the first online classes offered in the fall of 2006. The first graduates completed the program in the fall of 2008.

DEVELOPING THE PROGRAM

Initial Conditions

Several initial conditions shaped how the new program was designed and delivered. The University of Houston-Victoria is an upper division university which means that only junior and senior undergraduate classes and graduate classes are offered. The university uses local community colleges to supply the first two years of undergraduate education. Consequently, the graduate programs are a primary focus. In fact, in the School of Business Administration, where the new MSEDE program is offered, graduate students outnumber undergraduates by about a three to one margin. Therefore, the decision was made to offer the new MSEDE program at the graduate level. The current university president, who is the former provost of the University of Southern Mississippi, has a passion for economic development. His desire to see the UHV more involved in economic development activities and his willingness to supply the necessary resources provided the springboard for developing the MSEDE program.

The Association to Advance Collegiate Schools of Business International (AACSB) accredited School of Business Administration (SoBA) was chosen to develop the program because it has taken a lead in the university's outreach and new program development. In addition, both the current entrepreneurship and economics faculty are part of the SoBA.

For over 10 years, the university and the SoBA have been developing quality, online delivery of both graduate and undergraduate education. In fact, the AACSB accreditation team gave special recognition to the quality of the SoBA online courses. Online delivery has become a primary method for delivering quality education with a little over 60 percent of the university's semester hour credits being delivered online. Quality online classes combined with the geographic limitations of Victoria, Texas - the location of UHV's main campus - made online delivery of the new MSEDE program necessary. There are just not enough potential students in the Victoria area to support such a specialized program. The use of the online method was the only alternative. Consequently, the program had to be totally online with no face-to-face component.

There was a consensus among the university president, dean of SoBA, and faculty that the program would be designed with input from both academics and practitioners representing the interests of entrepreneurs and economic development professionals. Combining academics and practitioners would produce a program that is academically sound and yet relevant to the target student.

A search of people involved in both economic development and/or entrepreneurship revealed no significant pattern of undergraduate degree specialization. Consequently, the program would be available to anyone with an undergraduate degree (minimum 2.5 GPA preferred) from an accredited university program and a GMAT or equivalent GRE score that meets university requirements. Under certain conditions, students could petition for a GMAT/GRE waiver. No "leveling" courses would be required.

It was assumed that a primary target student of the program would be economic development professionals. The TEDC is one of the largest associations of economic development professionals in the nation. Before any serious program development was done, the degree concept was presented to Carlton Schwab, Chief Executive Officer of the TEDC. His initial reaction was extremely positive and his continued support eventually helped pave the way for approval from the Texas Higher Education Coordinating Board.

Initial research indicated that combining economic development and entrepreneurship into a unified curriculum was the direction to take the program. The holistic "three-legged stool" model that economic development is the result of business creation, expansion and retention, and attraction combined with strong communities became the basic foundation.

The Process

The process was designed to be in three phases - initial design of the MSEDE program, development of a detailed proposal complete with justification and specifics of the curriculum design, and finally the approval by UHV, the University of Houston System, and state agencies.

A design committee was formed consisting of academics from the SoBA and the School of Arts and Sciences that houses the non-profit leadership program (the community development component) and a representative from each of the following organizations - the Small Business Development Center (SBDC), the Council of Governments, the Victoria Economic Development Corporation, and the Victoria Chamber of Commerce. Drs. Jim and Jo Ann Carland, the architects of Western Carolina University's award winning graduate program in entrepreneurship, were brought in to facilitate the process. After two days of intense discussion, the basic structure began to emerge. The new 36 semester-hour program would consist of 10 core courses and 2 electives. The committee agreed that both entrepreneurship and economic development are processes and the basic curricula design would follow a process approach. The core would consist of an introduction course that would lay the foundation for the holistic view of the relationship between economic development and entrepreneurship, a four-course block of entrepreneurship-focused courses, and a four-course block of economic development-focused courses. The consensus of the committee was the program should have a "hands on" component. Consequently, a capstone course consisting of either an approved economic development project or an approved entrepreneurship project was included. The two electives were specified to include one entrepreneurship/business-related course and one economic development-related course. The specific details of the program design are provided in the program description section of this paper.

The second phase of the development process was to develop the detailed program proposal. The proposal included specific information about the curricula, program need, and program cost. The proposal became the primary document for the approval process.

Approval was needed at three primary levels--UHV, the University of Houston System, and the Texas Higher Education Coordinating Board. The program went from conception to final approval and the first offering of classes in 18 months.

PROGRAM DESCRIPTION

The final program design is found in Figure 1. As mentioned above, the basic program structure included an introductory course, four entrepreneurial-focused courses, four economic development-focused courses, two electives, and a capstone project course. The unique structure provides the student with two separate lenses to look at the "big picture" of economic development. The entrepreneurial lens allows the student to view the world from the viewpoint of an entrepreneur/business owner. This lens allows the student to understand what it takes to build a successful business and what should be expected from the economic development professional. The economic development lens provides the student with the ability to evaluate the role of economic development in firm creation, growth and expansion, and attraction. Knowing how the entrepreneurial mind works and what is important to the entrepreneur allows the economic development professional to design programs and strategies to best foster business growth and business attraction.

[FIGURE 1 OMITTED]

Although there are two separate lenses, there are many shared areas of core knowledge between the entrepreneurship and economic development blocks of courses. Figure 2 highlights the core areas of common knowledge. The knowledge categories are drawn for the core body of knowledge required for economic developer certification by the International Economic Development Council (IEDC) (2007). Integration of the entrepreneurial-focused knowledge and economic development-focused knowledge is designed into each core course.

[FIGURE 2 OMITTED]

Course Design Criteria

The program takes the process approach to course design. Figure 3 provides a diagram of the entrepreneurial and economic development process used to structure individual courses. The process is divided into four phases: 1 - conception of the business idea, 2 - evaluation and development of the idea, 3 - gathering the resources, and 4 - growth of the business. The entire process rests on a stable foundation of strong business-supportive high quality of life communities, regions, states, and nations. The process in Figure 3 provides a rich foundation for building the MSEDE program. Courses were designed to expose students to each phase of the process and the underlying need for strong business-friendly communities. The first three phases describe the activities of getting the doors of the firm open and phase four describes firm growth.

[FIGURE 3 OMITTED]

All business must start with solid business idea that appears to be economically viable. The merging of the entrepreneur and the business idea, phase one, starts firm creation. Phase two highlights the need to properly assess the business viability of the idea and, if found viable, turning the business idea into a formal business plan. Business plans are not businesses, however. The plan must be made operational by gathering and employing resources to finally get the firm in operation, phase three. Once firms are started, phase four, the growth of the firm can take a variety of paths. Carland, Hoy, Boulton, and Carland (1984) described the difference between small business ventures and entrepreneurial ventures. Small business ventures were described as independently owned and operated firms that were not dominant in their field and did not engage in marketing or innovative practices. These closely align with the lifestyle business shown in Figure 3. The scholars described entrepreneurial ventures as firms interested in using innovative strategic practices for growth and profit. These firms closely resemble the high potential and gazelle firms shown in Figure 3. Both small business ventures and entrepreneurial ventures provide economic benefit and are included in the MSEDE program.

For course development purposes, phase four is divided into two parts, growing the fledgling business to about 100 employees and growing the more mature firm beyond the 100 employee mark. By the time a firm reaches the 100 employee mark, the entrepreneur usually finds that he/she is unable to manage the firm without professional help. In fact, a study by the National Federation of Independent Business (Dennis, 2004) found that shifting management responsibility to others may be well under way in firms with as few as 20 employees. During the latter portion of phase four is often when the firm becomes large enough for a major expansion or relocation. Firms at this point in their growth are the traditional target of traditional economic development professionals. Consequently, the MSEDE program includes a block of courses dedicated to traditional economic development activities of retention, expansion, and attraction.

Finally, strong business-supportive communities are necessary for starting, growing and retaining, and attracting businesses (Figure 3). Consequently, the MSEDE program includes a substantial component dedicated to community development. The following section will describe each course in the program and how it relates to the process in Figure 3.

Individual Courses and Relation to Entrepreneurial and Economic Development Process

Introduction to Economic Development and Entrepreneurship (EDE 6350) is designed to give the student an overall view of how the economic development process works and how entrepreneurship is a vital part of economic growth. The student is introduced to a wide variety of literature describing current thinking about economic development and entrepreneurship. The structure of the course was influenced by an article by Ronald Swager (2000) that provided a comprehensive framework of the economic development process and by a Ray Perryman (2006) article describing more traditional economic development thinking Overall, the course gives the student the "big picture" of the MSEDE program.

The entrepreneurship block of four courses is designed to address the four phases of firm development. Each course specifically addresses a particular phase(s) of the process. Each course contains all the traditional topics such as financing, marketing, strategic management, etc., but at the level appropriate for the phase of growth. For example, the early courses would emphasize topics such as "bootstrap" financing while courses for the more mature firm would emphasize financing using an initial public offering. Obviously, topics would overlap, but each course emphasizes how the topic relates to the specific level of growth. The following courses make up the entrepreneurship block and cover specific phases of the firm growth process.

Fundamentals of Entrepreneurship and Innovation (EDE 6351) covers phase

1 and phase 2 to the point of producing a viable business idea.

Developing the Business Plan (EDE 6352) develops phase 2 through producing a formal business plan and phase 3, gathering sufficient resources to open the door of the firm.

Nurturing and Growing the Fledgling Venture (EDE 6353) emphasizes growing the business from the day the doors open to 100 employees.

Growing the Successful Venture (EDE 6354) develops the firm beyond 100 employees.

The economic development block of courses recognizes that at a certain point in the growth cycle firms become large enough to expand or relocate and, consequently, become the target of traditional economic development efforts. Therefore, courses in this block focus on economic development activities. In addition, economic development cannot be fully implemented in nonbusiness supportive communities with a poor quality of life. Consequently, the economic development courses also include techniques to build strong business-supportive communities that foster firm growth and provide a high quality of life for their citizens.

The economic development block takes a slightly different approach to the process methodology. Two bodies of knowledge were considered critical to student success - applied statistical methods and a working knowledge of resource sources for both community and business development. The following two courses were designed to provide both bodies of knowledge.

Economic Development and Entrepreneurial Finance (EDE 6355) emphasizes resource sources for both business and community development. The course investigates both public and private resource sources at the national, state, regional, and local levels. Traditional sources of business financing are covered in the entrepreneurship block of courses.

Methods in Economic Development (EDE 6356) provides students with the applied statistical methods needed for economic development.

The final two courses recognize the changing landscape of economic development. While each community is concerned with the economic wellbeing of its local citizens, contemporary economic develop recognizes that economic development is a regional matter (Drabenstott, 2005). Therefore, the final two economic development block courses investigate local and regional development.

The Practice of Local Economic Development (EDE 6357) focuses on the development of local economies and the community's capacity to foster business growth and provide its citizens with a good quality of life.

The Theory and Practice of Regional Economic Development (EDE 6358) concentrates on developing and coordinating regional efforts for economic development.

Students are allowed to select one elective that is business/entrepreneurship focused and one elective that is economic development/community development focused. Most students select the business/entrepreneurship elective from the courses offered in either the Strategic MBA or Global MBA degree programs. The economic development/community development elective is normally selected from graduate economics courses or graduate courses from the Non-Profit Leadership degree plan. Students may petition to have a course that is not in the approved list counted as an elective. This allows the student the flexibility to select courses that fit their particular situation or interests.

Economic Development and Entrepreneurship Project (EDE 6359) is the capstone course. The overwhelming consensus of the program design committee was that the program must include a "hands on" project that is either economic development-focused or entrepreneurship-focused. The project must be something that substantially furthers economic development and/or entrepreneurship at the regional or community level. The student must have the project approved before enrolling for the course. The project may be completed in the community or region where the student lives. Examples of projects completed by students include the strategic plan for a business incubator in a high-income community, the plan for a business incubator in an economically depressed area of a large metropolitan area, a community specific curricula for teaching potential entrepreneurs to start and develop businesses, and a study of the economic impact on the area surround the proposed location for an expanding university.

The MSEDE course offerings provide a comprehensive and integrated view of the entrepreneurial and economic development process. The process structure allows the student to understand the relationship between entrepreneurship and traditional economic development from both an integrative perspective and as economic development professionals or entrepreneurs.

CONCLUSIONS AND IMPLICATIONS

There is no doubt that the critical role of entrepreneurship in the overall economic development process is being recognized. It is also true that universities need to become more involved in developing leaders in economic development and entrepreneurship (Iannone, 1995). Finally, excellent graduate programs in entrepreneurship and economic development already exist and include elements of both economic development and entrepreneurship. Considering these facts, there are three primary reasons why the UHV MSEDE program described in this paper is important.

First, considering the recognized relation between economic development and entrepreneurship, no other program appears to fully integrate the two into a unified curriculum. The UHV MSEDE program addresses this possible shortcoming by providing a holistic view of the entrepreneurship and economic development process by formally recognizing the contribution of each area. Second, because the program was designed by both faculty and practitioners, the program is academically sound and useful in equipping leaders with the skills and knowledge to be effective in the global economy. Third, the online delivery makes the program available to many qualified students who could not leave career or family commitments to pursue graduate education. By making graduate education available to many, the call for more university involvement in economic development and entrepreneurship education is addressed. Overall, the program offers a unique opportunity for students interested in economic development or entrepreneurship to continue their education.

As mentioned in the introductory section, the program received final approval by the Texas Higher Coordinating Board in the summer of 2006 with classes beginning in the fall of 2006. Currently, there are about 65 students who appear committed to the program with 124 total students declaring MSEDE as a major (fall 2008 data). Many students are located throughout Texas, but at least 22 states are represented. The first graduating class completed the program in the fall of 2008. The program has two full-time faculty with one devoted to the entrepreneurship component and one to the economic development component. From time to time, other School of Business faculty and faculty from other disciplines participate in the program.

Obviously the program is in the infant stages and it may make several years to fully develop its potential. Over the coming years, many improvements and changes are expected. At this time, potential student interest in the program remains high and outside support is consistent. By all measures, the program has a bright future.

REFERENCES

Baumol, W. J. (2005). Entrepreneurship and the economy, an interview with William J. Baumol. Understanding Entrepreneurship: A Research and Policy Report. Ewing Marion Kauffman Foundation: 22-24.

Baumol, W. J. (2004). Entrepreneurial cultures and countercultures. Academy ofManagement Learning & Education. 3(3): 316-326.

Carland, J.W., Hoy, F., Boulton, W. R. & Carland, J. C. (1984). Differentiating entrepreneurs from small business owners: A conceptualization. Academy ofManagement Review. 9(1): 354-359.

Dennis, J. W. Jr. (2004). Business structure. NFIB National Small Business Poll. 4(7): 1-20.

Drabenstott, M. (2005). Rethinking federal policy for regional economic development. Economic Review, (91): 115-142.

Formaini, R. L. (2001). The engine of capitalists process: Entrepreneurs in economic theory. Economic and Financial Review. (4th quarter): 2-11.

Holcombe, R. G. (2003). Progress and entrepreneurship. The Quarterly Journal of Austrian Economics. 6(3): 3-26. Iannone, D. T. (1995). Economic development education: Future developments and directions. Economic Development Review. 13(3): 31-40.

International Economic Development Council. (2007) How to become certified. http://www.iedconline.org/?p=Certification_Process, fist accessed July, 2007.

Markley, D., Macke, D., & Luther, V. B. (2005). Energizing entrepreneurs: Creating a course for rural communities. Lincoln, NE: RUPRI Center for Rural Entrepreneurship and Heartland Center for Leadership Development.

Perryman, R. M. (2006). The market for prosperity: Understanding the economic development process. Texas Economic Development Council. (January).

Swager, R. J. (2000). Contemporary economic development. Economic Development Review, (Fall): 62-74.

Walzer, N., & Athiyaman (2007). Introduction and overview. In N. Walzer (Ed.), Entrepreneurship and Local Economic Development: 1-19. New York, NY: Lexington Books.

David F. Summers, University of Houston-Victoria

James N. Holm, University of Houston-Victoria

Cynthia A. Summers, University of Houston-Victoria