New Economy Means New Entrepreneurs

Business school students are turning to entrepreneur courses during the recession rather than working toward landing a job with a Wall Street firm or a hedge fund, another sign that the U.S. has entered into a so-called new economy.

With a $787-billion stimulus package and the second part of an enormous financial bailout both set to offer benefits to small businesses and entrepreneurs, the trend could persist for some time.

Following the collapse of Bear Stearns and Lehman Brothers, as well as massive layoffs at several financial firms, students have seen fewer opportunities being offered and even some offers revoked. Even firms such as Goldman Sachs (GS Quote), Morgan Stanley (MS Quote), JPMorgan Chase (JPM Quote) and Citigroup (C Quote) have reduced headcounts.

The Kauffman Foundation, which touts itself as one of the world's largest foundations devoted to entrepreneurship, has observed that prior to the recession that started just over a year ago, there had been a great expansion in interest on college campuses in entrepreneur courses.

"We haven't yet seen the hard evidence whether that's translated into more kids starting businesses because there's a huge lag effect," said Bob Litan, vice president of research and policy at the Kauffman Foundation and senior fellow at the Brookings Institute. "We find that most successful entrepreneurs are people that start their businesses in their mid-to-late 30's."

Students Making the Shift

There are signs, though, that students are turning their focus to small business and entrepreneurship programs to get a quicker start. Hyuk-Jeen Suh, Ph.D. and a member of Yale School of Management's class of 2009, said that entrepreneurship courses have been so attractive due to the cross-functional skills required to run a business.

"I believe taking entrepreneurship classes is the best way to prepare myself to be a CEO someday, whether it is at a small company or a Fortune 500 company," Suh said. "Despite the risk and challenges of entrepreneurship and starting a business, I also find it an extremely rewarding thing to do, especially if you can succeed."

As one of the co-chairs of the Entrepreneurship Club at Yale, Suh said that the club staff servicing the Yale School of Management community alone has increased from three students to 15 in a year.

"In addition, Yale recently created the Yale Entrepreneurial Institute to help entrepreneurs start businesses, and many professors involved with entrepreneurship and venture capital joined [the School of Management] in recent years," Suh said, adding that the entrepreneurship courses have always been very popular and are seeing increasing demand.