How Does Skill Preparation in Higher Education and its Cost Influence Alumni’s Entrepreneurship Career Choice?

The SNAAP survey includes questions for alumni to rate both how important the skills they learned in school have been for their careers (perceived importance), and how well their alma maters helped them develop these same skills (perceived preparedness). Survey results and previous SNAAP Data Briefs (see Frenette, 2020) suggest a gap between alumni’s sense of perceived importance and perceived preparedness (the skill preparation gap). Using three logistic regression models, this study investigates the impact of perceived preparedness and skill preparation gaps on three approaches of arts alumni entrepreneurship: freelancing, founding an arts-related venture, and starting a business of any kind. The study also examines other factors such as family resources, race, and student loans in determining whether someone will start a new venture or work as a freelancer to compare with the influence of university training.

The SNAAP survey asked alumni about the training they received from their degree-granting institutions in 16 skills, and the importance of these skills in their careers (see Column 1 of Table 1). Alumni may have developed these skills in arts-focused courses or other programs offered by their alma maters. Although the SNAAP survey includes one item specifically listed as ​“entrepreneurial skills”, we conceptualize entrepreneurship skills using a holistic perspective. Mitchelmore and Rowley (2010; 2013) developed a comprehensive entrepreneurial competence framework that includes four constellations of competencies, suggesting that entrepreneurship skill is a multidimensional concept constituted by a variety of managerial, conceptual, and relational skills. Therefore, we conducted a factor analysis of all the other 15 skills in the survey to identify latent entrepreneurship skills. The analysis reduces the 15 skills into four latent factors (see Column 2 of Table 1).

The results of the same logistic regression models indicate the significant impact of financial, social, and cultural capital on entrepreneurial career choices by taking racial identity into consideration:

• White alumni are about 42% less likely to found an arts-related venture than alumni of other races.
• The level of student loan debt is negatively associated with the probability of founding an arts-related venture and positively associated with the probability of freelancing.
• In terms of the interaction effect of race and student loan debt, across different races, alumni with either a relatively low level of student loan (None-$10,000) or a high level of student loan (more than $40,001) are more likely to found an arts-related business (Figure 1). Alumni at either extreme of student loans may tolerate the financial risk because the students with little financial burden can afford the risk and the students with large financial burdens have little to lose (Krishnan & Wang, 2019).

• Parental educational attainment is positively associated with the three entrepreneurial choices of arts alumni (Freelancing, founding an arts-related venture, and starting a business of any kind).
• Having family members with an arts career is positively associated with arts alumni choosing the three entrepreneurial paths.
• An interaction effect of race and family member career path exists. There is a dampening effect of identifying as white on the probability of an alumnus being an arts business founder, such that white-identifying alumni are less likely to be a founder of an arts business, even among alumni whose family members were or are professional artists (see Figure 2).

• Academic institutions should investigate how they are providing the training necessary for self-reliant careers.
• Race, as well as the intersection of race and other factors, may play a role in the likelihood that alumni start self-reliant careers.
• Academic institutions should consider:
  • How to offer training in both the arts and arts entrepreneurship without creating financial barriers to careers in the arts. Can more arts entrepreneurship training be included in arts curricula to reduce the need for additional tuition? Can institutions provide internship structures that encourage and support entrepreneurial experience?
  • The offerings and support that are available to first-generation college students and students who do not come from arts-focused families. Can institutions provide guidance and examples of long-term careers in the arts? Can institutions increase networking opportunities specifically tailored to arts students?