Co-working Spaces:

How Latin America universities are seizing entrepreneurship as their path to the technological future

Introduction

A good share of my last responsibilities while still working at the Competitiveness, Technology and Innovation Division at the Inter-American Development Bank consisted of setting up and manage to fruition a couple of comparative research projects on universities in Latin America.

One of these projects had the objective of collecting best practices in the realm of making entrepreneurship education and promotion a part of university life. In other words, how leading universities in Latin America had built diverse paths towards getting better integrated into entrepreneurship ecosystems in their cities and countries.

The project`s kick off took place at a workshop at OECD headquarters in Paris in July 2019, with participation of the project`s sponsors, the IDB and UNIVERSIA-Santander, a number of representatives of Latin American universities, and OECD colleagues from the OECD`s Center for Entrepreneurship, SMEs, Regions and Cities who would eventually become the leaders of the outstanding research team to carry out the study, Raffaele Trapasso and María Sobron Bernal.¹ At the workshop, it was decided that the study would take the form of a collection of case studies, each one of them dealing with a specific university. The focus would be on how the functions of entrepreneurship education and knowledge exchange were being fulfilled by each institution, in the particular context of the entrepreneurial ecosystems in which they operate. The subject would be approached using the HEInnovate framework developed at the OECD for the European Union.

The publication containing the results of the project, Entrepreneurial and Innovative Universities in Latin America, is available both at the IDB and the OECD web sites. I encourage you to read it. This note is not intended as a synthesis of the rich content you can find in the report itself, but it rather has a double purpose: first, to reflect on why the main theme of the project was -and still remains-  a key issue, and second, to share some of my own takeaways: over the past 18 months I have been invited to participate in several international meetings² in which I have been asked to share my thoughts on what was done and its significance, and I will try to reflect my words at those events here.

Universities` relevance in a changing world

The underlying premise of the project was that universities, as we know them, are subject these days to growing competitive pressures that they need to respond to if they want to remain relevant. I plan to expand on this in a future note, but suffice it to say that at least two major sources of pressure have come to affect most universities around the world, and institutions in Latin America are not an exception.

One is the proliferation of non/university or at least non/traditional sources of advanced training. Corporate universities (i.e.Amazon University), coding bootcamps, on line education aggregators (i.e. EDx or Coursera), and international campuses of foreign universities have all come to produce a rapid diversification in the supply of complex skills that now compete in particular locations with traditional universities.

The other one has to do with evolving student preferences and expectations. Currently, students tend to have a stronger preference for shorter, on line, closer to the labor market courses, and many of them contemplate careers in which they will become their own masters rather than employees in established companies or bureaucracies.

Both trends are closely linked to accelerating technological change. More specifically, they are related to the expansion of digital technology into all sectors of the economy, an expansion that has altered the skills in high demand, the way business is done, how research and innovation is organized and, in general, it has opened entirely new channels through which knowledge flows.

Concerned about the impact of these trends on universities in Latin America, the IDB in partnership with UNIVERSIA convened a consultation meeting in October 2018, at the IDB headquarters in Washington DC. About a dozen institutions of different size, affiliation and nationality spent a full day trying to find answers to two questions: Is rapid technological change affecting your university? And if so, how is the university responding to the emerging challenges?

The format of the meeting emphasized the free flow of ideas, so there were no formal resolutions or conclusions adopted at the end of the day. My own takeaways were clear though: to the first question, the answer was yes, we see clearly that the digital revolution is knocking at our doors in so many ways; to the second question, not a lot.

Here we had gathered academic leaders of the region that were fully aware of the radical technological changes taking place in the world around them, yet a variety of economic (scarcity of resources), regulatory (both internal rules and external regulations) and political (highly politicized institutions with very strong vested interest) circumstances tied the hands of rectors when it came to produce a significant response. Add to this the very weak links of universities to outside forces, since, in Latin America, governing bodies are almost without exception integrated by elements internal to the institution -no trustees or external boards as characteristic in anglophone institutions-. Links to businesses and local or regional economies were in bad shape, with a few exceptions.

All in all, plenty of reasons for concern.

The universities` dash towards entrepreneurship education

One thing stood out at the Washington meeting, in sharp contrast with the general paralysis: most participating universities reported that they were in the process of setting up initiatives aimed at boosting entrepreneurship education within their institutions. In fact, several of them were already well advanced along this road. This was a result of a combination of two factors: it seemed an attractive proposition to new cohorts of students, and, notably, there were no regulations or major obstacles standing in the way. Entrepreneurship education turned out to be an unregulated area, perhaps because it was new, perhaps because it was not easy to regulate, perhaps because it did not obviously touched any of the major interest groups within the institutions of higher education. Whichever the reason, several universities were moving in the same direction across various countries and institutional types, without having coordinated their actions.

Thus, after the consultation meeting, it emerged that universities` engagement with entrepreneurship constituted a high potential avenue for exploring ways in which a constructive and timely response to technological change could be generated from within institutions of higher education. A meeting of minds of the IDB, UNIVERSIA and OECD resulted in the study. The preferred approach to the issue ended up being, after debate at the Paris kick off seminar, a comparative case study design, focused on universities, both public and private, both national and regional, that had already accumulated a considerable trajectory in getting involved with entrepreneurship education and practice in a number of Latin American countries. The goal was to gather whether this was producing the expected outcomes in terms of internal change, and affecting positively key functions of the universities, such as knowledge exchange.

Beyond advancing our knowledge, the case studies were expected to benefit the participating institutions, by providing a mirror in which to see reflected what they were doing and, hopefully, improving on it. Above all, the idea was to have an impact in many other institutions providing modeling and inspiration to those lacking the experience of the institutions included in the research project.

The study, carried out against the difficulties imposed by the pandemic, achieved these results admirably. Significant impacts have already become tangible on several fronts: its content has been an input for several of the deliberations of an international network, EECOLE, dedicated precisely to deepen the link between entrepreneurship and education; universities have gotten inspired by it to initiate or expand actions in the area of entrepreneurship; in part due to the original partnership between the IDB and UNIVERSIA in the support of this study, an on line course on entrepreneurship for rectors of Iberoamerican universities was launched in 2023 with additional support from UNESCO/IESALC.

As asserted above, rather than discuss the study`s conclusions and results in detail, I will move on to sharing some personal takeaways. Needless to say, these are entirely my own responsibility, they aspire to add to and not to substract from the conclusions included in the report, and do not represent necessarily those of the researchers or the sponsoring organizations.

What does it all mean:

The transformative effect of entrepreneurship in universities

The study, first and foremost, supports in my view the notion that entrepreneurship has the potential to be a transformative issue for universities. The case studies included in the publication can be read as a collection of examples of this assertion.

Entrepreneurship aims at the center of the dynamics of technological change. It is in sync with the dissemination of the tech-based startup as the dominant form of business organization. It is linked to research and innovation, and to the search for creative solutions for business and social problems. And it is a set of skills that need not only to be taught in a traditional university course setting, but it is above all a practice, that leads universities naturally towards setting up business incubators and accelerators, to being concerned about intellectual property, patenting and licensing and, in one sentence, to becoming active members in the local entrepreneurship ecosystem.

If contemporary technological change represents a serious challenge for universities, a new line of activity that facilitates knowledge exchange with their business and social environs, bestows new and relevant new skills to the students and opens opportunities for technological leap frogging, represents nothing short of a key new avenue that institutions of higher education need to get engaged with. And entrepreneurship, if well implemented in a university, can be all that.

Do not take for granted that you are important

The other very important theme that jumped at me by reading the report is that the function and centrality of universities in the context of the entrepreneurship ecosystems in which they operate varies considerably.

The case study work by OECD was complemented during the research process by input from both UNIVESIA and the IDB. In the case of UNIVERSIA, there was an ongoing partnership with the MITD-Lab in a research project aimed at mapping entrepreneurship ecosystems in several Latin American cities. In the case of the IDB, the Competitiveness, Technology and Innovation Division had independently advanced in mapping still other Latin American ecosystems using a different methodology that was also very useful for the OECD research team. These contributions allowed each university included in the analysis to be placed in the context of its entrepreneurial ecosystem in analytical and visually compelling way.

Even a cursory observation of the ecosystem maps in the publication points at the fact we are highlighting here: in some ecosystems -i.e., in the context of a visual rendition of the ecosystem that includes not only universities but all sorts of entities such as incubators, public innovation agencies, accelerators, venture capital funds and yes, other universities- the university under study occupies a central position, its weight and reach evident from the size of the symbol representing it and the multitude of lines linking it to other institutions in the ecosystem. Yet in other cases, the respective university is located in a more peripheral position, and its links with other actors in the ecosystem are less numerous or intense.

One implication is that universities are not automatically important to entrepreneurial ecosystems. Universities have to earn their place. They cannot take for granted that they are indispensable for the ecosystem`s functioning. In a way, the ecosystem is more important for universities than universities for the entrepreneurial ecosystem. A lot depends of what and how much the institution invests in the ecosystem.

The university-ecosystem link in an evolutionary perspective

A related issue emerges by looking at ecosystems that are seemingly at different stages in their development. Evidence has accumulated pointing to the fact that ecosystems do not appear overnight, but rather evolve over years and decades, maturing and becoming more populated, complex and differentiated in their functions and membership. Universities can play multifaceted roles in a ecosystem. In a fully developed, mature ecosystem, they can probably focus themselves into knowledge transfer and networking functions, in addition to their core contribution in terms of skill acquisition.

The study, however, looked at a few cases of young ecosystems, not fully developed yet. As a general observation, universities were more important in terms of centrality to young entrepreneurial networks of their cities than universities located in older, well-established ones. Their presence was critical for functions such as incubation, acceleration; even early stage venture funding was not entirely ruled out. I have personally witnessed a process of this kind playing out in the case of the ecosystem in Lima -not included in the study-, in which several universities started incubation activities and then, at a later moment, public policy provided a big push to the entrepreneurial ecosystem through funding by ProInnóvate Perú, the public innovation agency.

All this suggests that institutions should tailor their contributions to their respective ecosystems fully aware of the age and complexity of the specific location they are in, rather than according to an abstract ideal model of the entrepreneurial university.

Outlook

Seen in perspective, all this means that getting engaged with entrepreneurship can indeed be a powerful avenue for universities to respond to the challenges of rapidly advancing technology.

Beyond the boundaries of universities, entrepreneurship has gained importance within national and sub-national policy agendas as well among business leaders. Lately, technology-driven start-ups in the Latin American region have shown remarkable growth, and the value of such start-ups has significantly increased over the last decade.  There is a growing traction for opportunity-driven entrepreneurship in Latin America​​ that matches the intense attention that entrepreneurship education and practice is gaining in academic institutions.

At the very minimum, as technology continues to drive global markets and societal change, the potencial of universities for fostering an environment where tech innovation and entrepreneurship can flourish is inmense. From offering specialized courses and mentorship programs to providing access to state-of-the-art facilities and networking opportunities, universities may have a pivotal role in shaping the entrepreneurs of tomorrow.

The challenge, however, is not uniform accross institutions and countries. Different universities face different realities. Their responses must be nuanced, tailored to the maturity of their local entrepreneurship ecosystems. While some may become hotbeds for startup incubation, others might focus on providing research and policy insights, or perhaps just focus on providing a state of the art education in entrepreneurial skills for all their students. Such diversity isn't a weakness but a strength, highlighting the multifaceted roles universities can play.

As I have observed, timely and well contextualized contributions by universities can be instrumental in accelerating the evolution of local ecosystems: they can disseminate the entrepreneurial mindset, they can temporarily fill a variety of empty spaces in the institutional and social network needed for entrepreneurship to flourish, and then they can become far more effective at sourcing ideas for innovation, enhancing the ecosystem’s deal flow. Every single one of these points is very important for the future of innovation in Latin America, a region in which relative scarcity of entrepreneurial skills and a weak deal flow are repeatedly singled out as barriers to economic growth.

The IDB-UNIVERSIA-OECD report is full of examples of good practices about connecting universities and entrepreneurship. Reading it one more time made me think, above all, that, if institutions of higher education follow up and turn entrepreneurship into a mainstay of their activity, they may even move past the much overdue adaptation to technological change, thus becoming a force shaping the future.

1. Before moving on with this note, I want to recognize the key contributions to the study of Javier López, from UNIVERSIA, whose brilliant insights and unwavering commitment represented a key part of our success, as well as of Isabel Vicentini, then my colleague at the Competitiveness, Technology and Innovation Division at the IDB. Gonzalo Rivas, in his role as Division Chief, never had doubts about the importance of this project. Esther Rodríguez-Fernández, at the IDB office in Europe, was instrumental in keeping the Bank`s partnership with UNIVERSIA and OECD moving forward. Adriana Tortajada, then Global Head of Entrepreneurship at Santander-Universidades, facilitated the project’s interface with the MIT and otherwise constituted a highly valuable partner for the research team.

2. A selection of such occasions include the Second EECOLE Roundtable held in Toronto on December 1st, 2023, as well as the event on Higher Education Institutions Promoting Entrepreneurial Ecosystems Italian Academic Center of University of Naples Federico II at the Tata Innovation Center, Cornell University, New York City.