Can Schools Help Build the Entrepreneurial Economy?
Lessons from the REAL (Rural Entrepreneurship Through Action Learning) Experience
A Forum — October 18, 1996
This forum introduced the REAL (Rural Entrepreneurship through Action Learning) Enterprises Program. Rick Larson, National Director, REAL Enterprises and Executive Director, North Carolina REAL Enterprises gave the purpose and rationale for REAL and described the scope of the program with the assistance of Tyler Gardner, age 18, a 1996 graduate of the REAL program in Broadus, Montana, owner of Ty's Custom Furniture, and a student at Haywood Community College in North Carolina.
Why Teach Entrepreneurship?
Small businesses are a key part of the American economy, yet as a nation we do little to combat the 80 to 90 percent failure rate of small businesses. The failure rate is less for small businesses which begin with business plans. While definitions of small business vary, REAL focusses on "micro-enterprises" not needing much capital -- usually less than $25,000 -- and employing 5-10 people. School-to-work efforts in rural and inner-city areas can benefit from the development of small businesses to make up for a lack of large employers and a poor economic base.
All people need entrepreneurial skills which, according to Larson "are often called critical thinking and life skills, including reading, writing, solving problems, and doing research." In addition, REAL assists students who may feel "trapped" in rural areas, who have limited incentives to stay in their hometown, but who also have few skills necessary to succeed elsewhere.
The Scope of REAL Enterprises
REAL is a national model for fostering entrepreneurial thinking and action on the part of young people. The program currently operates in eight states and 160 schools nationally -- approximately 100 high schools, 40 community colleges, a few universities and several community-based organizations. It works predominately with rural high schools. REAL's criteria for rural has been: "if the community feels its rural." REAL, however, has also begun to work in urban areas including Cambridge, Massachusetts and Seattle, Washington.
REAL's general mission is to serve at-risk young people, but Larson feels the program is "more powerful when there is a mix" of academic ability and incomes among participating students. Therefore, all types of students in any participating community can be involved. Gardner says he was a "shop bum" with poor academic skills, yet some of his classmates had GPA's of 4.0. While only 40 percent of REAL students from 1991 to 1995 pursued a "college preparatory" curriculum, 80 percent self-reported their intentions to continue their education after high school once they became involved in REAL. Gardner, for example, chose a community college known for its fine woodworking and business management programs to strengthen his skills for running "Ty's Custom Furniture."
As part of the REAL curriculum, adopted by participating schools, students keep journals, assess their personal strengths and abilities, analyze the local community, inventory existing businesses, identify business ideas that meet community need, and research and write business plans for these ideas. After six drafts of his business plan, Gardner was finally ready to take it to the bank to secure a business loan. Thankful that he did not turn in his first draft, Gardner says he now realizes the importance of English and math and understands a lot more about finances and legal issues.
Gardner is among the 10 percent of REAL high school students who open and operate their own enterprises after high school. While starting an actual business is a program goal, it is not the highest priority for high school students -- "developing a life plan" comes first. For post-secondary students, starting a business is a higher priority. REAL provides a protective environment (a) to start a business, including access to a revolving loan fund for new enterprises and (b) to experience business failure -- though not desired but a valuable learning experience.
Another programmatic aspect is that REAL teachers -- often vocational educators, teachers from other disciplines, most with interests in hands-on learning or teachers with their own entrepreneurial ventures on the side -- are provided eight days of professional development on implementing REAL in the classroom.