Int. J. Entrepreneurial Venturing, Vol. X, No. Y, xxxx Effectuation and causation in entrepreneurship education Soili Mäkimurto-Koivumaa* Kemi-Tornio University of Applied Sciences Technology and Business, Tietokatu 1, FI-94600 Kemi, Finland E-mail: Soili.Makimurto-Koivumaa@tokem.fi *Corresponding author Vesa Puhakka Department of Management Oulu Business School University of Oulu P.O. Box 4600, FI-90014 University of Oulu, Finland E-mail: vesa.puhakka@oulu.fi Abstract: Entrepreneurship refers to development and enactment of entrepreneurial opportunities at the intersection of venture creation and market creation. The present study approaches entrepreneurship education as effectuation of possible futures and causation of relevant knowledge in the creation of entrepreneurial opportunities. Through emphasis on the role of effectuation, a creative process view of entrepreneurship education is advocated. It builds on the cognitive and social-psychological schools of entrepreneurship and cognitive, contextual and creation views on entrepreneurial opportunities. As a result, we suggest a model in which effectuation could be used systematically together with causation in entrepreneurship education. Effectuation in entrepreneurship education is proposed to open a new pedagogic view and context to increase student awareness of their ability to create societal impact rather than to accomplish the effective establishment of a company. Keywords: entrepreneurship education; effectuation; opportunity. Reference to this paper should be made as follows: Mäkimurto-Koivumaa, S. and Puhakka, V. (xxxx) ‘Effectuation and causation in entrepreneurship education’, Int. J. Entrepreneurial Venturing, Vol. X, No. Y, pp.000–000. Biographical notes: Soili Mäkimurto-Koivumaa has 20 years experience in engineering education and is currently Education Manager at Kemi-Tornio University of Applied Sciences in the Department of Technology and Business. She has taken her Master’s degree in Economics at the University of Oulu in 1985. At the moment she is finishing her doctoral studies at the same university. Her main research interest is in entrepreneurship education and action based learning methods. Vesa Puhakka is a Professor of Management and the Head of Department of Management at the University of Oulu’s Business School. His research concentrates on opportunity-creating processes, international entrepreneurship and strategy practices of new ventures. Copyright © 200x Inderscience Enterprises Ltd. 1 2 1 S. Mäkimurto-Koivumaa and V. Puhakka Introduction Entrepreneurship education has been at the centre of political discussions for at least two decades and is regarded as one of the key issues in the economic development of nations (Kickul and Fayolle, 2007; Kyrö and Carrier, 2005). However, entrepreneurship education has been found to face at least two intertwining challenges: First, the level of entrepreneurial activity and interest in entrepreneurship education among higher education students is rather low (see Heinonen and Poikkijoki, 2006). In practise, some students act towards entrepreneurship but are not motivated to keep up a sustained, long-term entrepreneurial career. This relates to the second challenge, namely a highly turbulent and dynamic business environment in which making predictions based on earlier experiences is difficult (Sarasvathy, 2001). In this type of dynamic or even chaotic environment, the economy develops through experimentally organised new ventures (Eliasson et al., 2004). This global uncertainty has caused many students to fail and expectations for their education were proven to be too optimistic (see Gibb, 2002). As a whole, the career expectations are changing and, therefore, students need a new type of entrepreneurial skills (cf. Alvarez and Barney, 2007; Davidsson, 2004). They should be able to construct and realise entrepreneurial opportunities and use dynamism as a possibility to create new economic activity and also give direction in the truly uncertain environment (Collins et al., 2004; Kirby, 2007). There seems to be, therefore, a need for the development and renewal of the premises where entrepreneurial education is offered (Kickul and Fayolle, 2007). On these grounds it is not surprising that entrepreneurship education has attracted a lot of interest among researchers (e.g., Kolvereid and Moen, 1997; Matlay and Carey, 2007; Seikkula-Leino et al., 2010; Sequieira et al., 2006; Solomon, 2007). Many theories about entrepreneurship education have been proposed but none of them has been widely approved by academic society (Fayolle and Gailly, 2008; Fiet, 2000; Gibb, 1993; Krueger and Carsrud, 1993; Kuratko, 2005). On the basis of prior research we know about quite a variety of different factors and mechanisms that influence entrepreneurship education but as a whole our knowledge is limited and fragmented (Gibb, 2002). To advance our understanding of entrepreneurship education more attention should be paid to the consideration of the nature of entrepreneurship as a phenomenon. Researchers and educators tend to approach entrepreneurship as a linear phenomenon that can be described through causal relationships (cf. Sarasvathy, 2001). Consequently, we are able to speak-about and describe entrepreneurship but cannot transfer or create an understanding of why, where and how entrepreneurship emerges (Bruyat and Julien, 2000; see also Gibb, 2002). Instead, entrepreneurship could be seen as a multi-layered transformation where entrepreneurship is created in events, which over time create the phenomenon itself (Van de Ven and Engleman, 2004). This type of entrepreneurship view would bring to the core of education necessary causality, generalisation based on versatility and flexibility of explanations, temporal order and discontinuations of explanations and layers of causalities (Sarasvathy, 2008, see also Van de Ven and Poole, 2005). Therefore, entrepreneurship education is not only a pedagogical issue but an ontological and epistemological issue of how to approach the creative and constructive behaviour of human beings in truly uncertain business environments. In the present study, we contribute to research on entrepreneurship education in three particular ways. Firstly, we demonstrate that entrepreneurship is inherently about change and thus should be approached in education using processual pedagogical methods. Effectuation and causation in entrepreneurship education 3 Secondly, we suggest that the concept of effectuation could meet the objectives of entrepreneurship education as a processual phenomenon and be used as a learning approach. In the end, our aim is to propose a model in which effectuation could be used systematically together with causation in entrepreneurship education. The paper is structured as follows: In the second section we examine recent research on entrepreneurship as a process of creation. The purpose is to portray the inherent nature of entrepreneurship for the sake of understanding the reason why effectuation is proposed to be a relevant approach to entrepreneurship education. In the third section we elaborate on effectuation and show how effectuation relates to the process of creating entrepreneurship. This section brings forth the central elements of effectuation, on which the basis the entrepreneurship education could be built. In the fourth section we illustrate the effectual experiences in developing entrepreneurial behaviour and mindset. The fifth section discusses effectuation-based entrepreneurship. The aim is to form a future direction and open up new avenues for research and practise of entrepreneurship education. We conclude by suggesting applicable methods for effectuation-based entrepreneurial education. 2 Entrepreneurship as a process creation Recognised as the creation of business opportunities, entrepreneurship comprises ideas, beliefs and actions directed toward reaching a goal that emerges gradually as the process continues (Sarasvathy et al., 2003). “What economics and other social sciences take as given, the entrepreneur actually constructs” (Sarasvathy, 2004). For a long time, entrepreneurship was construed in terms of managing a small business or being the owner-manager thereof. However, entrepreneurship is not directly associated with this particular context; it is essentially context-free organisational creativity (Gartner et al., 2003; Görling and Rehn, 2008, Hjorth, 2003, 2005; Sarasvathy, 2001; Steyaert and Hjorth, 2003). It is equally likely to be present in large corporations’ renewal efforts and in the identification of new markets and technologies as in the development projects of public organisations or, for that matter, in the reorganisation of universities (cf. institutional or social entrepreneurship). At the core of entrepreneurship lies the creation and realisation of entrepreneurial opportunities regardless of context (Shane and Venkataraman, 2000). Entrepreneurship is a creative activity taking place when neither the goal nor often the initial conditions are known at the start, but constructed during the process (Sarasvathy, 2001; Steyaert, 2007). This happens, because there is no single right or best solution, and even the starting situation may be so complex and constantly changing that it is difficult to analyse it reliably to the extent necessary. Bearing in mind the discussion above, this study uses the term entrepreneur to refer to an individual or a community of individuals (organisation) that create new business in its operational environment (cf. Hjorth, 2003). Entrepreneurship is, thus, an everyday practise in all kinds of organisations but is gratuitously glorified to be a characteristic of heroic business people (Christensen and Raynor, 1997). The latest empirical research on entrepreneurship has shown that entrepreneurship is episodic (event-based) especially in the use of resources, in the level of commitment and in risk taking (e.g., Sarason et al., 2006). Entrepreneurship is also about taking affordable risks (Sarasvathy, 2001). This means taking risks that, despite 4 S. Mäkimurto-Koivumaa and V. Puhakka resulting in failure, could be endured. Gradual construction of shared goals among participants is also a key element of entrepreneurship (Mainela and Puhakka, 2009). An important way of accomplishing this is to build strategic partnerships in order to understand a market place, customers, technology and to create trade, for example. In summary, it is building a common understanding among stakeholders and convincing them of the correct direction. Entrepreneurship also seems to be about the acceptance of unexpected events and seeing them as possibilities – without surprises there is no entrepreneurship (Sarasvathy, 2004; Van de Ven and Engleman, 2004). In contrast, the theories in management and economics have traditionally used causation as an approach when explaining the operations of a new business venture. In case he/she wants to create a new business, the most common process includes defining the total market (segmentation), choosing the target market (targeting) and choosing the position for the new company in the target market (positioning) (Sarasvathy, 2001). Sarasvathy (2001) depicts the causation process as time consuming and requires collecting detailed material. The process is based on the logic of prediction and, thus, the entrepreneur has to be able to estimate the size of the target market and the market share he/she expects to reach. By collecting a lot of details from different sources (statistics and market research, for instance) the entrepreneur attempts to minimise the risks of the decision process. As Sarasvathy (2001) illuminatingly puts it “...the current paradigm suggests that we proceed inward to specifics form a larger, general universe-that is, to an optimal target segment from a predetermined market”. The causation process proceeds by going through such steps as defining the goal or decision to be made, deciding the set of alternative means, consideration of possible constraints and specifying the criteria for selecting between the means (Sarasvathy, 2001). Often it is thought that entrepreneurship and entrepreneurial opportunities are born like this. Also, entrepreneurship education widely follows this logic (see Honig, 2004; Kyrö and Tapani, 2007). This is a serious mistake in our thinking concerning entrepreneurship (e.g., Sarasvathy, 2004). Genuine entrepreneurship is the creation of entrepreneurial opportunities where both the initial and the end situation are largely unknown (Sarasvathy et al., 2003). Here in this study we are interested specifically in genuine entrepreneurship. It is known that with entrepreneurs and entrepreneurship goals constantly change as you go along (Alvarez and Barney, 2007). Decisions are quickly made and tried without great analyses because the causal logics of the affecting elements cannot be known in advance. Thus, entrepreneurs rather search for partners with whom things can be thought over and done. Therefore, commitments are created, potential customers are identified, even to sell solutions that do not exist yet, and to identify potential customer needs. This type of practise could be seen to be related to the ability to accept the unexpected as part of everyday life, and even seek out the unexpected, because these events provide a new direction. At the centre of this type of effectuation logic is the ability to make a quick commitment to activity with stakeholders so that mistakes can be endured. Finding partners is crucial in order to create understanding and to be able to collectively bear unexpected events (Sarasvathy, 2001; 2004; Sarasvathy et al., 2003; Sarasvathy and Kotha, 2001). The original French term ‘entreprendre’ reflects well what entrepreneurship is fundamentally about (see Hjorth, 2003). It is stepping into a space where it is known that a new business is wanted, but the type of business needed is not known. It is perceiving the character of a new business as well as identifying an opportunity that is then Effectuation and causation in entrepreneurship education 5 implemented by using other business behaviours (e.g., leadership and marketing). If we think of this spatiotemporally embedded space and creating an entrepreneurial opportunity in it, it is not detached from its surroundings, nor is it a closed internal process from which opportunities emerge. This space is a process where the mental creation and surroundings of the entrepreneur are in strong and continuous interaction with each other. Inside this entrepreneurial space something is happening that is absorbing influences from present business activities and that results in causing economic irregularity (see Roininen and Ylinenpää, 2009). By arguing this, we claim that entrepreneurship education should take more deeply into consideration the inherent nature of entrepreneurship. In a cause-based process, the entrepreneur would be able to collect all information that has relevance to the present situation, gain an overview of it and all of its elements, and then look for a solution based on existent, definable and selectable operations. Entrepreneurship in real life suffers from the constraints discussed above, hampering the rational, logical approach. Somehow the entrepreneurial mind must sweep the situation and apply creative thinking to arrive at a viable solution. The above portrays entrepreneurship as the activity of solving problems that have no clear answers (Knight, 1921). Individuals usually try to avoid true uncertainty and, thus, they prefer risky or known situations over unknown or uncertain situations (Sarasvathy, 2001). However, the truly uncertain situation is not able to be solved by rational cause-based forecasting but based on effectuation in which there is an attempt to control the present through creating collaborative action. 3 Effectuation in developing entrepreneurial behaviour and mindset If the goal of entrepreneurship education would be to ensure that students learn theories and certain technical tools for management, causation can be used. Traditional teaching methods such as lectures, exercises, case studies and a business plan are common in this type of entrepreneurship education (see Gibb, 2002; Heinonen and Poikkijoki, 2006) and assist in delivering knowledge. Effectiveness of the business plan, for instance, has been criticised (Honig, 2004; Kyrö and Tapio, 2007). The main reason for using it in education is that it offers a clear causal model for covering the different elements of the planning process, operations and strategies associated with starting a new business. Even though business plan enables delivering a lot of information and data, there is not much proof that it can develop the above outlined entrepreneurial skills or have influence on the performance of the established new venture (Honig and Karlsson, 2004). As Honig (2004) depicts, entrepreneurship is rather an inductive process when various products, services and ideas are examined, modified and delivered. Actually, the business plan does not help the students that much in choosing to become entrepreneurs, though it can be used to provide information for understanding business operations (Honig, 2004). In contrast, the effectuation process is based on the logic of control instead of prediction. The entrepreneur operates in the opposite way than in the causation process by selecting the available causes or means. In case the person is creating a new business by using the approach of effectuation, he/she could start the process by finding partners to cooperate with and to support him/her in the entrepreneurship process. The choice of partners can be based on personal contacts or creating new ones. By involving more people in the process, he/she might be able to increase the number of possible means 6 S. Mäkimurto-Koivumaa and V. Puhakka needed to create a business in some field. When using the effectuation approach the person, a future entrepreneur, does not necessarily know what kind of business he/she is going to start. In practise, the options remain open and versatile and it is possible that the entrepreneur is actually choosing between different possibilities. The process of effectuation uses the strategy of many to one – many possible means can be used to reach the expected effect or goal (e.g., a new venture) (Sarasvathy, 2001). The effectuation approach can be explained by using Sarasvathy’s (2008) effectual reasoning process, in which the entrepreneur answers the following questions: Who am I and who do I know and what do I know? What is the knowledge corridor – where am I? What is my social network? According to Sarasvathy (2008, p.65), entrepreneurs are seen too often as mythical visionaries who are able to see the future better than other people. The assumption might be valid when the decision making situation is simple (for example, there is a clear need for a coffee shop because there is not one and the entrepreneur is able to organise the offering). An entrepreneur often faces other challenges because the opportunity for entrepreneurship has to be created or designed on the basis of the means the person has. Entrepreneurs, instead of locating market gaps, in reality start with their experience and practical knowledge as a means to open up new entrepreneurial opportunities [see Sarasvathy, (2008), p.12; Read and Sarasvathy, 2005]. The second part is needed to raise the entrepreneur’s awareness of possibilities and opportunities – means at the personal level. The docility includes the entrepreneur’s ability to persuade others and their skill to involve more actors to create the venture (Harmeling, 2005). By inviting more stakeholders (creating a wider social network) the entrepreneur can create more means for the future process. When comparing the processes of causation and effectuation, it can be seen that causation is effect dependent and effectuation is actor dependent (Sarasvathy, 2001). In causation the entrepreneur chooses the means on the basis of the characteristics of the effect. In effectuation, instead, the effects are chosen on the basis of the characteristics of the actor. Thus, the entrepreneur is leveraging the possible future by counting on people. When the aim is to teach and deliver previously defined and widely accepted law-like knowledge, the causation process could be used. However, if the objective of entrepreneurship education is to enable students to be able to create and realise entrepreneurial opportunities, the effectuation process should be recommended. In addition, when the entrepreneurship candidate only has a general idea of a business, the effectuation process opens up more possibilities to operate and can even bring up opportunities that were not thought about in the beginning of the process. According to Sarasvathy (2001), effectuation can develop competencies in creating and exploiting contingencies and help the entrepreneur to see things from different aspects. Entrepreneurship education is expected to lead to entrepreneurial behaviours or entrepreneurial mindset as depicted in Table 1. If summarised, the purpose of using effectuation is to stress the need for finding a creative way to use an individual’s abilities. In addition, effectuation emphasises the need for building networks. Thus, at the beginning of the process it is important to analyse the existing network and to create new ones. The effectuation process seems to include the creation of the opportunity as part of the implementation of the entrepreneurial process. The effectuation process consists of elements such as specifying a given set of means, clarifying a set of effects/ operationalisation of aspirations, defining the constraints on effects/ operations and defining the selection criteria between effects (Sarasvathy, 2001). Therefore, entrepreneurship education needs to operate at different levels: through Effectuation and causation in entrepreneurship education 7 learning about entrepreneurship; in and through entrepreneurship by using different pedagogical methods; for entrepreneurship by supporting the establishment of new ventures (see Heinonen and Poikkijoki, 2006). The above analysis of the central elements of effectuation logic and their use in entrepreneurship education calls for a new type of methods used in education, which are based on the process of ontology and the emerging nature of knowledge. Table 1 Elements of entrepreneurial behaviours and entrepreneurial mindset Entrepreneurial behaviours Entrepreneurial mindset Gibb (1993, 2002): Ireland et al. (2003): • Opportunity seeking and grasping • A growth-oriented perspective through which individuals promote flexibility, creativity, continuous innovation and renewal • Taking initiatives • Solving problems creatively Comment [t1]: Author: Please provide full reference or delete from the text if not required. • Managing autonomously • Taking responsibility for (and ownership of) things • Seeing things through • Networking effectively to manage interdependence • Putting things together creatively • Using judgment to take calculated risks Heinonen and Poikkijoki (2006): Haynie et al. (2010): • Identifying opportunities • The ability to be dynamic, flexible and self-regulating in one’s cognitions given dynamic and uncertain task environments • Creatively breaking patterns • Taking and managing risks • Organising and coordinating resources • Interaction with the environment Kyrö and Tapani (2007): • Creativity • Opportunity recognition • A prior assumption of a proactive action in complexity 4 Effectual experiences in developing entrepreneurial behaviour and mindset Developing and learning entrepreneurial behaviour is a long and challenging process which requires new approaches (see Kirby, 2007; Kyrö and Carrier, 2005; Politis, 2008). Many researchers emphasise the role of the actor (learner) and participation or enactment in the process (Johannisson, 2002; Sarasvathy, 2001). Some new approaches for renewing learning environments of entrepreneurship (e.g., virtual laboratories and entrepreneurship boot camps) and increasing experiential elements (e.g., role-play, Comment [t2]: Author: Please provide full reference or delete from the text if not required. 8 S. Mäkimurto-Koivumaa and V. Puhakka behavioural exercises and design thinking) have been taken into use (Fayolle and Gailly, 2008; Taatila, 2010). These types of learning methods relate to effectuation logic which is based on process ontology and socially constructed epistemology. However, we argue that students also need, because of their lack of experience and social networks, causation-based methods to learn entrepreneurship. Delivering theoretical information and prior experiences without unnecessary trial and error through causation can be organised by using traditional methods such as lectures, exercises and case studies. Thus, it is evident that there are advanced methodologies for use in building an effectuation type of experiential exercises and a causation type of knowledge delivery. What is actually problematic and challenging is to combine both of these: how is it possible to support the explorative and exploitative nature of learning in entrepreneurship education. In the following we propose a model in which the effectuation could be used more systematically in combination with causation. Figure 1 Effectual entrepreneurship education (see online version for colours) Effectuation thinking starts from the idea that human beings construct their context and thus can leverage many kinds of futures based on the given means. Therefore, in the first learning event students need to become aware of their personal skills and capabilities. This follows the first part of effectual reasoning (Who am I? What do I know? Whom do I know?). For raising self-awareness such tools as personal SWOT can be used, with which students need to analyse their personal skills, work experience and hobbies. Teachers and fellow students could support the first phase with personal consultation and team discussions. In addition, students define the goal for their studies (in entrepreneurship, in their major) and prepare a personal learning agreement or study plan (or career plan) with the timeline and milestones to make progress. This part of entrepreneurship education could consist of three elements: increasing entrepreneurial awareness in/through entrepreneurship, education for starting a new venture about/for Effectuation and causation in entrepreneurship education 9 entrepreneurship and operations as an entrepreneur. The same division has been used by Liñàn (2007) and Heinonen and Poikkijoki (2006). To support the development of entrepreneurial skills, i.e., to train students in or through entrepreneurship, various experiential methods need to be used. The main objective of the whole process is to place the student in the centre and open to him/her possibilities to take responsibility for the whole process. The person in the effectual entrepreneurship process can expand his/her abilities through education. When the person operates in some of the entrepreneurial arenas, he/she can converge his/her possibilities and redefine the goal (What do I need? What do I want?). If the person operates in the entrepreneurial arena and finds the need for expanding abilities, he/she continues with the route of education which always starts with the step of self-awareness. Learning entrepreneurship cannot be solely based on theories: it requires experiential elements as well. Politis (2008) has used Kolb’s (1984) theory of experiential learning when defining ways to support entrepreneurial learning – the kinds of events that support the personal development of an acting entrepreneur. However, Politis (2008) argues that “entrepreneurial learning can be regarded as an experiential process in which entrepreneurs develop knowledge through four distinctive learning abilities: experiencing, reflecting, thinking and acting.” Johannisson (2002) sees that entrepreneurship is strongly connected with creativity and change in society. Entrepreneurship means actualisation, not merely linguistic or intellectual exercises. The actor, his/her ways to operate and make decisions, are at the centre of entrepreneurship. According to Sarasvathy (2001), the majority of entrepreneurs use effectuation in decision making processes in practise. On the basis of the above argumentation, entrepreneurship education has two tasks. On one hand, it should be able to increase the level of knowledge and skills needed in working life. On the other hand, it should find a way to raise students’ interest. Desire and passion to use acquired knowledge, possibly by creating new ventures, has an effect on their intentions. Entrepreneurial mindset in general includes such elements as creativity, ability to manage risk and uncertainty and entrepreneurial self-efficacy, for instance, which refers to an individual’s beliefs in their ability to reach their goals as a result of their own actions (see Peterman and Kennedy, 2003; Sequeira et al., 2007). By using different pedagogical methods, learning environments and approaches it is possible to meet the needs of entrepreneurship education. When discussing entrepreneurship with students, a typical negative comment they usually express is that risk and uncertainty is a part of an entrepreneur’s life. However, avoiding risk, being risk-averse, is a cultural factor, which can have some influence on the need for certainty and to reduce uncertainty. In some cultures there seems to be a higher need for certainty (Honig and Karlsson, 2004). Leskinen (1999) has studied students’ concepts of entrepreneurship and risk-taking. She has created the concept of a risk-field, in which failures and successes are experienced by creating special situations through which students are exposed to real or possible risks. According to her findings, action is the basis for learning risk-taking, and students can be trained for risk taking and uncertainty (see also Kyrö and Tapani, 2007). By using an effectuation-based framework throughout their education, students could be trained for uncertainty. Using causation or causal models can be effective in teaching general principles and skills for business management and administration (see Honig, 2004). As mentioned earlier, causation is a traditional way to make decisions. Human beings tend to use 10 S. Mäkimurto-Koivumaa and V. Puhakka causation to minimise risk and uncertainty (see Gibb, 2002; Honig, 2004; Kuratko, 2005; Sarasvathy, 2001c). As Sarasvathy (2001) has stated, causation is “excellent at exploiting knowledge”. It has an important role in learning entrepreneurship. However, because entrepreneurship is more about creating than about exploiting, entrepreneurship education also needs effectuation types of processual learning logics in which the knowledge, desire, networks, tools and the business expand over time through active behaviour, cognitive sense making and social interpretation. Cooperation projects or assignments with companies, research or public organisations (stakeholders) could be examples of experiential elements, for instance. The objective of using external stakeholders is to open new contacts for students and expand their social network. These contacts can later be used in case a student decides to start a company. There have also been successful experiments in an incubation process in higher education institutions. In addition, the learning environment needs to be open consisting of the above-mentioned external stakeholders, working life in general, but also virtual tools. The main format for studying should be cooperative work among students. The teacher’s role is to create the framework and opportunities for learning and act as a coach or supporter in the process (Johannisson, 2002). By regularly providing students with challenging problems and new situations, creative thinking and risk-taking, and thus learning, can be supported. Real problems or projects offered by stakeholder companies could assist with this as well. Rather than solely educating students about predetermined factual content, educators have an important role in fostering experiential learning. Creating effectuation-based entrepreneurship education requires a renewed way of teaching, thinking and organising education by reconstructing the curriculum as a whole. In order to achieve results, developing entrepreneurial skills and mindset is not possible during one project or assignment. Learning entrepreneurial behaviours can be compared to learning foreign languages: it is possible to create a limited vocabulary within 40 hours but to develop active language skills takes many years of active work. Therefore, it can also be stated that entrepreneurship education should be a continuous process starting from the first years of education – this also concerns higher education institutions, and especially non-business students. It is also important to point out that learning entrepreneurial skills cannot be owned by business studies only – all the courses included in the curriculum need to be carried out to support the learning process. Using effectuation as the learning approach requires that teachers operate in the same way: they must adopt the entrepreneurial way of teaching. In practise, creating a supportive learning environment for effectuation could require that teachers cooperate intensively between educational organisations and different stakeholders. 5 Discussion of future direction of entrepreneurship education This paper kicked off with a discussion on the nature of entrepreneurship. A crucial distinction was drawn between the traditional notion of entrepreneurship as the management and/or ownership of a small or medium-sized enterprise and the perspective adopted here. Building on work originally conducted by Schumpeter (1934), this perspective focuses on the entrepreneur’s ability to recognise new business opportunities and innovate solutions, thereby creatively destroying existing business models and solutions. Having gained considerable support from recent research on entrepreneurship (e.g., Davidsson, 2004), this view does away with the notion that entrepreneurship is not Comment [t3]: Author: Please provide full reference or delete from the text if not required. Effectuation and causation in entrepreneurship education 11 a valid function for already established business ventures. On the contrary, entrepreneurship is always present when an individual or a community creates a new business, regardless of whether it takes the form of setting up a new venture or expanding an existing firm using, for example, novel technology (Davidsson, 2004). In this research, the creative process is regarded as an effectuation system through which entrepreneurs, as members of their organisational environments, interpret the evolutionary potential offered by their environment’s business dynamics and take action to create outcomes that the market values. A burning desire to pursue perceived business opportunities is either ignited or extinguished by the organisational community. In the former case, the entrepreneurial personality first channels its motivation and energy to understanding and interpreting the business situation and then focuses on giving a concrete shape to the opportunities. Creating an entrepreneurial opportunity involves three different types of activity (Sarasvathy, 2001; 2004; Sarasvathy et al., 2003; Sarasvathy and Kotha, 2001). Firstly, it includes social activity, because entrepreneurs are embedded in their own social communities, drawing from it influences, ideas, operational models, resources and encouragement. Moreover, this social community offers a forum for exchanging ideas about what kind of business is being conducted and what the current needs are and creating visions and dreams for business. Secondly, the creation of an entrepreneurial opportunity involves cognitive activity with the entrepreneurs attempting to understand ideas about entrepreneurship and business in their organisational environment and cultural heritage. In effect, they are striving to control and manage complexity. The third type of activity intrinsic to the creation of business opportunities is entrepreneurial actions. Entrepreneurs perform pragmatic tasks in searching for and devising the best possible solution to their problem. In absolute terms, this solution, a business opportunity, may not be the most innovative or best, but for a particular entrepreneur in a particular situation and organisational setting, it is the most viable and valid option. Here in this study we argue that these intertwining processes are the core that entrepreneurship education should deal with. Why should entrepreneurship education be regarded as a creative effectuation activity? Numerous studies show that the innovative activities of individuals produce changes in reality (see Amabile 1988; Woodman and Schoenfeldt, 1989). Creativity, manifesting itself in the form of unexpected, original and unique results, is a force that generates something that is better than what existed before. Csikszentmihalyi (1988) has maintained that creativity is called for in the face of complicated novel problems for which no established solutions are readily available. Findings such as these seem to suggest that entrepreneurial opportunities are results of creative entrepreneurial activities, and that they can be considered as expressions of creativity, because their generation requires complex information processing and they lead to unpredictable and original solutions. This line of thinking has been followed by researchers such as Sarasvathy (2001), who has asserted that opportunities arise from creative behaviour and that the generation of new business invariably involves a creative component. Such a component can also be found in the work by Schumpeter (1934), for he has stressed the importance of creative destruction in entrepreneurial ventures. Also Leibenstein (1966) and Kirzner (1997) have emphasised the role of creativity in entrepreneurship. What consequences does all this have on research focusing on entrepreneurship education? At the very least, we may conclude that since entrepreneurial opportunities 12 S. Mäkimurto-Koivumaa and V. Puhakka are unique expressions of organisational creativity, they are quite hard to investigate and promote. Complex and multidimensional, the task facing the researcher could be described as follows: entrepreneurship is like joining a game halfway through without knowing what the game is all about or what its goals are, and yet you are expected to grasp its essence and figure out what problem needs to be solved – and then solve it. In other words, entrepreneurship is not an activity, where all the pieces are known before the game begins, and the right solution is arrived at simply by arranging the pieces correctly (as in a jigsaw puzzle). Rather, it is a game, whose name, pieces, rules, logic and outcome have to be made sense of and given meaning while it is in progress. Having the skills needed to play the game is a crucial success factor in the dynamic organisations of the digital age, but academic research and conceptual understanding of the phenomenon is lagging behind. As a result, this paper proposes that research and practise of entrepreneurship education should focus attention and resources on such a dynamic process as entrepreneurship. 6 Conclusions and implications Learning and developing an entrepreneurial mindset requires experiences and an experiential learning environment. Dew et al. (2009) has studied decision making processes between novices and experts in entrepreneurship. They have found that entrepreneurial expertise is related to a set of factors related to framing decisions in a different way than novices. Even though the paper was based on studying acting entrepreneurs and novices, it supports the view that practising and training for entrepreneurial decisions is relevant to future success. When used systematically, effectuation-based entrepreneurship education could open an arena for that purpose. Entrepreneurship requires availability of information about business opportunities, networks at different levels and practical experiences (see Roininen and Ylinenpää, 2009). Teaching students to discover, create and exploit opportunities requires cognitive properties (see Shane and Venkatamaran, 2000), availability of information and ability to take risks. Effectuation-based entrepreneurship education could be built on action-based learning methods such as problem-based or enquiry-based learning, which can support the whole learning process. They enable the use of traditional learning methods (lectures, exercises and case studies) to build upon theoretical understanding using a causation approach, while including activating methods (e.g., projects) to support the mode of effectuation as well. To ensure a holistic effectuation-based learning, the whole curriculum should include effectual experiences from the beginning of education. Students should study in heterogeneous teams to build up a social network and create contacts with different organisations. The main responsibility of learning should be given to the students themselves. The role of teachers should be as activators and facilitators of the learning process. Students should be faced with, at least on a weekly basis, new situations, problems and challenges that they must solve themselves. The toolkit for effectuation-based learning already exists – waiting to be utilised. Table 2 introduces some views on how to integrate causation and effectuation with illustrative educational tools (cf. Sarasvathy, 2001). In addition, it includes the combining features of entrepreneurial behaviours and mindset, and the main entrepreneurial actions to emphasise their connection with causation and/or effectuation. Effectuation and causation in entrepreneurship education Table 2 13 Causation, effectuation and educational tools Entrepreneurial behaviours, mindset and actions Causation (CAU) or effectuation (EFF) Educational tools (examples) Behaviours and mindset • Opportunity recognition EFF/CAU • Creativity, flexibility and proactive behaviour EFF Projects, problem solving exercises EFF/CAU Projects, lectures with assignments EFF Projects, guest lectures, mentoring, visits CAU Business plan, lectures with assignments/exercises, case studies CAU/EFF Business plan, exercises, role-play, lectures with assignments • Risk-taking and uncertainty • Networking Projects, visits, mentoring Actions (examples) • Planning • Management • Leadership EFF • Organising CAU/EFF Projects, role-play, exercises Projects, lectures with assignments, exercises The effectuation-based entrepreneurship education framework leads to the process of change, which should involve teachers, the administration of the educational organisations and teacher education. 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