In this post
The Relationship Between VET and Entrepreneurship
The vocational education and training (VET) system is integral to developing entrepreneurial skills and can be moulded to play a stronger role in developing the Australian workforce.
With globalisation and technological change accelerating, the National Centre for Vocational Education Research (NCVER) finds in their recent report that economies need to be entrepreneurial and knowledge-intensive in order to thrive.
Entrepreneurship is widely considered to be one of the key 21st Century Capabilities necessary for future jobs and sustainable careers.
The contributions of the VET system to entrepreneurship in Australia, therefore, needs to be explored further, with entrepreneurial skills being necessary for the development of society and the economy.
While Australia has a strong small business culture, entrepreneurial education has not been standardised or formalised. So why is entrepreneurship important for the nation, and how can the VET system play a stronger role?
The importance of entrepreneurship
Entrepreneurship is critical to the progression of modern economies. Defined as the ability to create something from nothing, entrepreneurship is characterised by:
- Initiating, doing, achieving and building an enterprise or organisation.
- Sensing an opportunity that others may not see.
- The ability to build a founding team to complement your own skills and talent.
- The know-how to find and control resources.
- The willingness to take calculated risks.
Firstly, global competition is rising due to more rapid knowledge flows and open markets becoming the norm. Greater investments are also being made in new knowledge creation, such as through research and development (R&D), increasing the potential for innovative products and processes to be developed.
Information and communication technologies (ICT) have also unlocked an enormous potential for innovation and entrepreneurship. Finally, employment is generated through the growth of new businesses, benefiting local communities.
A recent World Economic Forum report found that the top 1% of early-stage companies contribute
of total sector revenues created in the fifth year of a company's life
While the top 5% contribute 72%. The results for job creation are also similarly impressive.
Finally, in the words of Eurydice (2012), the European Commission’s network for lifelong learning, a new generation of entrepreneurial young people is required for economic growth:
“A dynamic economy, which is innovative and able to create the jobs that are needed, will require a greater number of young people who are willing and able to become entrepreneurs … who will launch and successfully develop their own commercial or social ventures, or who will become innovators in the wider organisations in which they work.”
Skills needed for a thriving entrepreneurial ecosystem
A Business Council of Australia discussion paper found that businesses are concerned the technical skills offered by vocational education and training programs do not meet their needs for skills like problem-solving, creativity, initiative and oral business communication.
The Council also identifies other entrepreneurial skills that need to be embedded into VET training programs such as business management, economic and financial literacy, and the practical exploration of entrepreneurial opportunities.
This demonstrates that simply improving workers’ vocational and technical skills will not be enough for the workforce of the future – instead, systems that build skills will also have to flourish.
According to NCVER in “The role of VET in the entrepreneurial ecosystem”, the VET sector needs to increase its participation in the entrepreneurial ecosystem, with registered training organisations (RTOs) needing to actively position themselves as partners in this ecosystem.
Because education is key to shaping young people’s skills, attitudes and culture, entrepreneurship education needs to be addressed from a young age.
Opportunities for VET in the entrepreneurial ecosystem
For the VET sector in Australia, NCVER recommends a focus on strategy development. This strategy should be developed with reference to international and local experience and focuses on bottom-up initiatives.
Any national programs should also support local area efforts through business plan competitions, co-working spaces and the like. Enterprise skills also need to be made a key component of VET courses, particularly in IT qualifications.
The approach to developing entrepreneurial skills also needs to focus on practice-based learning by involving experienced entrepreneurs who will help to make VET students aware of the opportunities in their communities.
VET providers will, therefore, need to build connections with entrepreneurship support organisations like incubators, mentoring bodies and business service providers.
Students with an entrepreneurial mindset are unlikely to enjoy 3-4 years completing a university degree, instead of wanting to pursue higher education on their own terms. The VET system is brilliantly positioned to provide entrepreneurship programs and inject enterprise skills across numerous other training programs to better the Australian workforce.
Your Ultimate Guide to a Successful Career in Bookkeeping
Embarking on a career in bookkeeping is not just about dealing with numbers, it’s about playin...
How to Grow Your Bookkeeping Career in 5 Simple Steps
Financial literacy and accountability for decision-making are key to the success of many small to me...
Xero vs MYOB: Which Course is Right For You?
When it comes to bookkeeping and accounting software, the debate often boils down to Xero vs MYOB. B...
Want to read more?
These 3 Trends are Shaping the Future of Higher Education: What Do They Mean For You?
What's in store for the future of higher education? These three critical trends will reshape the way...
The Federal Budget and the Opportunities for Young Learners in Australia
The results of the Federal Budget are in favour of high school grads, young people and the unemploye...
5 Reasons VET Priorities Make Economic Sense
Wondering why there’s so much debate over VET and TAFE funding? Find out here why making VET a prior...