Stimulating new business creation through system dynamics education

Abstract

Purpose The international community recognizes the role of entrepreneurship education in fostering economic growth and sustainable development. However, preparing the next generation of entrepreneurs is not an easy task, since today’s complexity requires the creation of skills and capabilities for which the traditional programs reveal their inadequacy. Some scholars remark how entrepreneurship education and entrepreneurial intention are not necessarily related and, in line with policy makers’ concerns, call for educational programs more routed in financial skills’ enhancement. The purpose of this paper is to explore the potential of system dynamics (SD) for entrepreneurial education, investigating the relationships between financial and entrepreneurial skills’ formation and business development. Design/methodology/approach The paper introduces the main elements of SD, describes literature streams of SD applications fitting the entrepreneurial education spheres and proposes an SD’ insight model based on selected literature and declined in terms of stock-and-flow and causal loop structures. Findings The study provides a causal model capturing the links between the processes of entrepreneurial skill formation and firms’ start-ups and closures. Such model introduces a double effect of financial literacy on entrepreneurial orientation and locates the contribution of simulated entrepreneurial decisions in formal and informal educational contexts. Originality/value The paper displays how SD can contribute to entrepreneurship and presents an original causal model highlighting the accumulation of financial and non-financial skills through education and experience, their impact on business development and the usefulness of SD methodology for skill achievement.