With increased globalization people have seen the need to increase wealth creation especially within the underdeveloped Third World. It has also become evident that neither the government nor the formal sector can supply the necessary job creation without a sustained effort and partnerships between all sectors of the economy. One means of creating work opportunities will be the development of entrepreneurial and innovative skills within the country. The creation of such job opportunities by encouraging entrepreneurial innovation has been well illustrated by Dana, Korot and Tovstiga (2005:12) in Silicon Valley, Israel, Singapore and the Netherlands. These authors report that in the narrow 35 mile by 10 mile corridor within Silicon Valley 6,500 technology enterprises are located. Singapore is home to almost 100,000 entrepreneurs and had a per capita GDP of US$42,948.00 during 2004 and an annual growth rate of 8.8% (Singapore Statistics, 2006).
In addition higher education has become a prime export commodity of total world services trade, amounting to a staggering 3% (Grundling & Steynberg, 2006:5). With the increased interest in entrepreneurial innovation as an economic driver there is a need to develop expertise within this area. Thus there is a need to develop entrepreneurial innovation knowledge within higher education institutions to ensure the maintenance of a competitive edge in an under developed market. Dana, et al. (2005:10) define knowledge as “the integration of information, ideas, experience, intuition, skills and lessons learned that creates added value for a firm”. In addition Dana et el. (2005) define innovation as “the process by which knowledge is transformed into new or significantly modified products and/or services that establish the firm’s competitive edge aiou past papers“. It can thus be seen that it is imperative that higher education in South Africa actively pursue a policy to encourage entrepreneurial innovation to ensure the creation of expertise, the development of new industries and the empowering of students to establish themselves within an entrepreneurial innovative culture. Higher education will be required to become a key player in domesticating knowledge and diffusing it into the economy in order to serve as engines for community development and social renewal (Grundling & Steynberg, 2006:6).
The research question under discussion is formulated as What minimum requirements should be set in an entrepreneurial and innovation framework in order to support entrepreneurial and innovation knowledge creation at institutions of higher education?
This article attempts to develop a framework to encourage entrepreneurial thinking within a higher education environment, taking into account consideration policy and infrastructural requirements, knowledge creation fundamentals and institutional arrangements.
Policy initiatives within higher education institutions are essential to establish guidance for entrepreneurs, funding agencies, industry, labour in general and for students and institutions of higher education in particular. From a higher education perspective government as well as institutional policy requirements will be discussed in brief.
If this is to be accomplished it will require government intervention to construct policies which should include the reduction of taxation in the form of capital gains tax rate, providing incentives for increased spending on research and development, encouraging active venture capital markets, an alteration of the ‘hiring and firing’ labour regulations, and encouraging the spending on new technology shares (Da Rin, Nicodano & Sembenelli, 2005:8).
·The higher education institution policies
The higher education institution must provide a working atmosphere in which entrepreneurship can thrive. Venkataraman (2003:154) proposes that it is not merely the injection of capital that enhances the development of entrepreneurship. Rather, it is the tangible infrastructural essentials such as capital markets, advanced telecommunications, sound legal and transportation systems. In addition, intangible components must be in place. These intangibles are access to novel ideas, informal forums, role models, region specific opportunities, access to large markets, safety nets and executive leadership. As policy within the institution is developed it must consider and include a planning process to accommodate these essentials.
Policy must also augment the entrepreneurial culture within the higher education institution as a new mindset of students must be established from one of expecting to be employed, to one of providing work opportunities for others. Technology licensing offices (TLOs) must be established at the higher education institutions. Stanford University sponsored research expenditures of US$391 million generated 25 TLO start ups in 1997 (Gregorio & Shane, 2003:209). An investment in patent rights by the higher education institutions will ensure future capital investments into the institution. Intellectual property (IP) policies should be framed so as to capture the wealth generated and to distribute it equitably between investors, partners, the university and the entrepreneur. Such rewards will generate future interest for both the investors and the entrepreneurs. Policies, procedures and network contacts to capture venture capital must be established.
Research and Development policies in entrepreneurship must be refined and focused. Currently, the focus of entrepreneurial research at Tshwane University of Technology in South Africa falls within the three niche areas of business clustering, business development and management of innovation. In each of these niche areas it will be necessary to develop Masters and Doctorate programmes in entrepreneurship and innovation. This in turn will mean a need for the improvement of the staff qualification profile within these areas. Along with the Masters and Doctorate programmes, accredited research outputs must be produced in entrepreneurship and innovation (Grundling & Steynberg, 2006:6). In addition to the Masters degrees in Entrepreneurship and the Masters degree in Comparative Local Development, a Masters degree in Cognitive Reasoning should be considered for the future. Such a course should include a thorough foundation in finance reasoning along with creative thinking and business planning.