Are business degrees pointless?
One of the interesting things about the business world is that a university education does not necessarily correlate to business success. In fact, when looking at people like Richard Branson, Deborah Meaden and Alan Sugar, you could argue that leaving school at 16 is more likely to lead to a glowing career as an entrepreneur. So, are business degrees are pointless? Business Leader investigated…
What percentage of entrepreneurs have a university education?
According to Startups.co.uk, the highest qualification held by owner-managers tends to be A Level or equivalent, with 29.4% of entrepreneurs falling into this category.
21.8% of entrepreneurs have a degree or equivalent, whilst 11% of owner-managers do not have any educational qualifications. Therefore, these statistics suggest that most entrepreneurs are not university-educated. So, is business acumen better learned outside of formal education?
We recently spoke to David Spencer-Percival, the Founder and CEO of Life Science People, who left school at 16, and his advice for young entrepreneurs starting a business is that focus and single-mindedness are what leads to success.
He comments: “I think I’ve been asked this question an awful lot, and I really only have one answer to it – and that is focus.
“The problem when starting your own business is that everybody has an opinion. I have never read a single business book in my life, I left school at 16 with no qualifications – I go with my instincts. And I am also incredibly single-minded. I don’t listen to the noise around me, because when you’re trying to build and run a business, there can be only one person running a business.
“You can’t run a business with a group of people moving in all different directions, in my humble opinion. You must have a single-minded visionary at the front. When it gets bigger, you build a board and get more people involved with decision-making, but you must be able to make decisions and stick by them and keep the focus. Otherwise, everybody is telling you how to run it and you will just lose the plot.”
In a previous interview with Business Leader, former Dragon Theo Paphitis, who also left school at 16, highlights the importance of passion and common sense, but he even suspected that his dyslexia is one of the factors behind his business success.
He said: “I don’t say the harder I work, the luckier I get for no reason. Success doesn’t just appear, you have to earn it, and many entrepreneurs I know live and breathe their businesses, so it doesn’t really feel like work, it’s just what you do. The two pillars I can hand on heart say have been a constant in my career have been passion for what I do and common sense!”
“There have been many factors, but I suspect I wouldn’t be where I was today without being dyslexic. When people ask whether I wish I didn’t have dyslexia, I think I haven’t done that badly with it!
“Dyslexia has made me create a whole new world for myself in finding alternative solutions from the norm for processing and analysing information, particularly in business. I know I’m not alone here. Buckets full of hard work, passion and a competitive nature have all certainly helped too.”
In the interview, Paphitis also said that he’d launched a school tuck shop at the age of 14, highlighting that his entrepreneurial journey started from a young age.
He’s not the only one either: Jody Riley, the CEO of PamperBook, said she’d be working in local charity shops, going to car boot sales and doing a paper round from the age of nine.
Both have gone on to enjoy considerable success since then, which might suggest that business ventures, and particularly those that occur at a young age, can also help create successful entrepreneurs.
How many university-educated entrepreneurs did business degrees?
Although it appears that entrepreneurs are less likely to be educated to degree level, of those who are, is a business degree the key to their success?
According to research from Utility Bidder, a business degree was the most popular amongst entrepreneurs in their study, with 28.77% of them having completed one. The second most popular was Economics (8.12%), followed by Accounting & Finance (7.66%), Marketing (7.19%), Law (5.80%), International Business (5.34%) and Computer Science (5.10%).
The fact that most university-educated entrepreneurs did a business degree is probably not going to come as much of a surprise, but what is it specifically about business degrees that are helping to create so many successful businesspeople?
Paul Little, Incubation Manager for Launch@SalfordUni, the purpose-built incubation space to help and grow start-up businesses, explains: “Doing a business degree means there are lots of routes available. That could be a broad or general overview of the landscape, or it could be something that gives you a specialist qualification, accredited by professional bodies. Some sectors demand this.
“You tend to hear about the entrepreneurs who stared with nothing because they make good stories, but you hear less about the ones who got a degree and worked for a few years before starting their own business. They are far more numerous.
“And being at university is about far more than the degree. You are gaining a collegiate experience; exposure to a diverse body and other disciplines, as well as the cultural benefits of gaining a wider overview of the world; making contacts and friends and joining societies, such as Enactus, which can give you a huge amount of business experience and help build contacts.
“Many universities will give you access to funded programmes too. For example, we have the Launch incubator, which has helped nearly 200 businesses so far. We provide access to finance, office space, mentors, pitching practice, etc. That is the kind of support you just wouldn’t get outside a university setting.
“Plus, once you leave, you still have access to the alumni network, again building networks and opportunities.”
Clearly, there are plenty of reasons why budding entrepreneurs should think about cutting their teeth at university, provided they have the qualifications to do so.
But what about the entrepreneurs who dropped out of university? There are plenty of success stories here too, including Bill Gates and Mark Zuckerberg, who both dropped out of Harvard University.
Kevin Leyes, The Founder of digital marketing agency Leyes Media, is another. He dropped out of university whilst studying for a computer engineering degree, and his business now turns over around $1.2m a year.
In an interview with The Mirror, Kevin said: “University degrees are no longer as important or worthwhile as they once were.
“Tycoons like Mark Zuckerberg and Elon Musk are no longer giving importance to hiring employees with degrees for their teams – that is a clear indication of how the game is changing.
“Not belonging to a university does not make you more ignorant, less knowledgeable or a ‘worse’ person – I read a lot and am always in the process of learning.”
The road to business success is different for everyone. Whether self-study, formal education, work, or even a combination of all three, is what helps someone along that road appears to, ultimately, depend on what works best for the individual.