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Can students in technology entrepreneurship courses help foster start-ups by the unemployed? (Watkins et al. 2008)

Citation

Watkins, T., Russo, J., & Ochs, J. (2008). Can students in technology entrepreneurship courses help foster start-ups by the unemployed? Journal of Small Business and Enterprise Development, 15(2), 348-364.

Highlights

    • The study’s objective was to examine the impact of participating in the Integrated Product Development (IPD) program on dislocated workers’ entrepreneurial activities.
    • The authors used data from a survey administered after one year of program participation to compare the prevalence of entrepreneurial activities among IPD participants compared with program applicants who were not selected to participate in IPD.
    • The study found statistically significant positive relationships between participating in the IPD program and several business development activities and outcomes.
    • The quality of causal evidence presented in this report is low because the authors did not demonstrate that the IPD and comparison groups were comparable before the program, nor did they control for potential differences in their analysis. This means we are not confident that the estimated effects are attributable to the IPD program; other factors are likely to have contributed.

Intervention Examined

The Integrated Product Development (IPD) Program

Features of the Intervention

The IPD program paired dislocated workers with multidisciplinary teams from business, engineering, and design arts programs at Lehigh University in Bethlehem, Pennsylvania. The teams worked with the dislocated workers to develop products and start businesses based on their product ideas. Participants worked with students in technology entrepreneurship courses and faculty advisors to prepare business and marketing plans, develop prototypes, seek investments, create products, file for and/or obtain patents, and work to launch a profitable business.

Participants were recruited through various forms of media, and eligibility was determined from interviews and questionnaires. Among 212 applicants, 11 participants were deemed eligible because they were dislocated workers or new workers, lived in the area, and had the interest and ability to participate based on several additional screening characteristics. All participants were male, had varying degrees of college education, and most had business training and/or had previous involvement in entrepreneurial activities (3 had been self-employed and 5 had parents with businesses).

IPD participants and a group of unselected applicants were surveyed a year following the program to assess key business development tasks. Seven IPD participants (64 percent) responded, and nine applicants (22 percent of those targeted) responded. The authors compared the outcomes of IPD participants and nonselected applicants and tested the statistical significance of differences in outcomes.

Findings

    • The study found positive and statistically significant relationships between IPD participation and several early and high-level business development activities, as well as higher rates of employee hiring and making a profit.

Considerations for Interpreting the Findings

The study did not demonstrate that the IPD participants and non-selected applicants were similar to one another before the IPD program began in their age or race and ethnicity. Neither did the analysis include control variables for these characteristics. This means that any observed differences in outcomes between the IPD participants and non-selected applicants might reflect underlying differences between the two groups, and not the effect of the intervention. In addition, the sample sizes in the study were very small.

Causal Evidence Rating

The quality of causal evidence presented in this report is low because the authors did not demonstrate that the IPD and comparison groups were comparable before the program, nor did they control for potential differences in their analysis. This means we are not confident that the estimated effects are attributable to the IPD program; other factors are likely to have contributed.

Reviewed by CLEAR

April 2016