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Entrepreneurship learning: All university students can benefit

A study of entrepreneurship activity at 27 universities in Canada showed an increased interest in co-op work terms where students could work in their own start-up.



Learning to create value in environments of uncertainty with limited resources is something that can help all young people build their futures, especially amid the uncertainty of COVID-19. (Telfer School of Management, University of Ottawa), Author provided

Entrepreneurs, their associated startups and the subsequent growth of their companies have a vital impact on the health of our economy. In Canada, young adults have demonstrated a growing interest in entrepreneurship.

Entrepreneurship has historically been narrowly associated with business schools and traditional startups. But as the World Economic Forum has noted, “school systems must prepare students to work in a dynamic, rapidly changing entrepreneurial and global environment. This requires a complete paradigm shift for academia, including changing the fundamentals of how schools operate and their role in society.”

Students from all faculties can and should benefit from entrepreneurial skills, classically defined as learning to create value in environments of uncertainty, and with limited resources. Doing so will ensure our next generations are able to meet the challenges of tomorrow. This has never been truer than now, as we navigate effects of the COVID-19 pandemic. How the pandemic will interact with the changing landscape of work remains to be seen.

Entrepreneurship at universities

My team at the Telfer School of Management at the University of Ottawa conducted a review in summer 2021 of entrepreneurship activities at the largest 27 universities in Canada.

We set out to uncover the number and type of entrepreneurship courses available, the opportunities for students to learn this valuable skill set outside the classroom and the current practices in supporting student startups. We found some encouraging information and opportunities for improvement.

Surprisingly, we uncovered an average of 22 entrepreneurship-focused courses per institution. Examined together, these courses spanned many faculties (including engineering, science, arts and social science) and levels of study, from undergraduate to doctoral and post-doctoral studies.

A student at a computer.
A survey of 27 universities in Canada found entrepreneurship-focused courses running in faculties like engineering, science, arts and social science. (Telfer School of Management, University of Ottawa)

This is a dramatic increase in the number of entrepreneurship courses offered at institutions in the last decade. A similar 2014 review of entrepreneurship courses in 20 Ontario universities revealed an average of only 5.7 entrepreneurship courses per institution. In 2010, most institutions offered between one and five entrepreneurship courses.

Beyond business schools

Entrepreneurship is no longer strictly the domain of business schools. Many faculties are recognizing the importance of this skill set for students, and on average, 3.5 faculties per university teach entrepreneurship.

Our review found positive indicators related to the number and type of entrepreneurship courses available.

Most have moved beyond business planning courses as a default entrepreneurship offering. There are now courses that focus on the early stages of new ventures such as creativity, generating ideas, identifying opportunities and how to validate early ideas by talking to customers.

New ventures, social entrepreneurship

Universities are finding ways to customize traditional “big business” topics for brand-new ventures. Such approaches recognize that new ventures launched by students aren’t beginning with the money, staff or resources that larger firms have, in courses about marketing for entrepreneurs, entrepreneurship law and financing new ventures.

Additionally, courses that have not been traditionally taught outside of Engineering programs are emerging in other faculties. Examples include courses about design thinking and new product development, software venturing, making a prototype and others.

The course titles most often added in the last few years include those associated with social entrepreneurship — startups that seek to help solve societal problems and aren’t focused on just making a profit. Students from all faculties are looking to solve real-world problems with unique business models.

RBC Fast Pitch Competition showcasing top teams from two courses in entrepreneurial thinking at the Haskayne School of Business.

Traditional classroom study isn’t the only way educational institutions are able to influence students’ learning. Examples include experiential programming such as competitions where students can pitch ideas and meet possible business co-founders; skills training workshops (available at most schools); student-run conferences; student clubs promoting entrepreneurship in a variety of contexts and disciplines — from those selling art, starting a counselling practice or commercializing a health science discovery.

Read more: How to help artists and cultural industries recover from the COVID-19 disaster

Learning by doing

Providing students with experiential learning opportunities allows for experimentation, application of skills and valuable networking. These learning-by-doing activities have been found to trigger the development of many important entrepreneurial competencies.

Other encouraging non-credit learning programs exist, such as opportunities for students to hear from external entrepreneurs. Our data showed that between summer 2020 and summer 2021, co-op work terms where students could work in their own start-ups gained popularity. In 2020, only 43 per cent of schools we reviewed offered this kind of work placement, but in 2021, 70 per cent of schools are doing so.

The prevalence of support for student start-ups is encouraging. Each year a growing number of students start their ventures while also pursuing their academic studies.

Creating value

Almost all universities offer some sort of incubator services — programs that offer students access to mentorship, investors and other support to help them establish their very early stage companies. Most offer more than one such program. Beyond mentorship, support for students may include consultation services, funding, training and space to work from.

Read more: PhD students can benefit from non-academic mentors' outside perspectives

Many student entrepreneurs are selling valuable products and services in our communities and beyond and creating jobs: For example, in 2018, the University of Toronto reported that its nine incubators and accelerators at three campuses helped produce more than 150 companies over the preceding five years, and generated more than $500 million in investment. Students involved in such successful ventures are graduating into their existing businesses, and rather than looking for a job upon graduation, are creating their own.

Expanding access to all students

Student interest, donor funding and economic imperatives continue to drive both entrepreneurial interest and activity in universities, and there are some very good practices.

Still, much work remains for many institutions to ensure all students, regardless of their faculty or career aspirations, have access to essential entrepreneurship skills.

Universities must continue to look to redefine who they teach, establish what they teach and finally, improve how they teach.

Stephen Daze does not work for, consult, own shares in or receive funding from any company or organisation that would benefit from this article, and has disclosed no relevant affiliations beyond their academic appointment.

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Recession On Deck? BofA Slashes GDP Forecast, Sees “Significant Risk Of Negative Growth Quarter”

Recession On Deck? BofA Slashes GDP Forecast, Sees "Significant Risk Of Negative Growth Quarter"

With a panicking Biden likely to continue freaking out over soaring inflation, and calling Powell every day ordering the Fed chair to do somethin



Recession On Deck? BofA Slashes GDP Forecast, Sees "Significant Risk Of Negative Growth Quarter"

With a panicking Biden likely to continue freaking out over soaring inflation, and calling Powell every day ordering the Fed chair to do something about those approval rate-crushing surging prices...

... which in turn has cornered Powell to keep jawboning markets lower, with threats of even more rate hikes and even more price drops until inflation somehow cracks (how that happens when it is the supply-driven inflation that remains sticky, and which the Fed has no control over, nobody knows yet) we recently joked that the market crash will continue until Biden's approval rating raises.

Sarcasm aside, we are dead serious that at this point only the risk - or reality - of a recession can offset the fear of even higher prices. After all, no matter how many death threats Powell gets from the White House, he will not hike into a recession just because Biden's approval rating has hit rock bottom. It's also why we said, far less joingkly, that "every market bull is praying for a recession: Biden can't crash markets fast enough"

Which brings us to the current Wall Street landscape where some banks, most notably the likes of Goldman, continue to predict even more rate hikes while ignoring the risk of a slowdown, it's entire bullish economic outlook for 2022 predicated on households spending "excess savings" which they have spent a long time ago (expect a huge downgrade to GDP in 2022 from Goldman in the next few weeks as the bank realizes this), while on the other hand we have banks like JPMorgan, which recently pivoted to the new narrative, and as we reported last weekend, now sees a sharp slowdown in the US economy following a series of disappointing data recently...

... and as a result, JPM now "forecast growth decelerated from a 7.0% q/q saar in 4Q21 to a trend like 1.5% in 1Q22."

And while not yet a recession, today Bank of America stunned market when it chief economist joined JPM in slashing his GDP for 2022, and especially for Q1 where his forecast has collapsed from 4.0% previously to just 1.0%, a number which we are confident will drop to zero and soon negative if the slide in stocks accelerates due to the impact financial conditions and the (lack of) wealth effect have on the broader economy.

Harris lists 3 clear reasons for his gloomy revision, which are all in line with what we have been warning for quite some time now, to wit:

1. Omicron: The Omicron wave has exacerbated labor-supply constraints and slowed services consumption. All else equal, we estimate that services spending could slice 0.6pp off January real consumer spending, although a pickup in stay-at-home durable goods demand could offset some of the shock. This is consistent with the aggregated BAC card data: Anna Zhou has flagged a significant slowdown in spending on leisure services, and a pickup in durables spending. Meanwhile Jeseo Park finds that our BofA US Consumer Confidence Indicator has slipped further from already weak levels. All of this points to a slowdown in economic activity in January. With cases already down around 25% from their mid-January peak, however, we expect the Omicron shock to be short-lived. The data should improve meaningfully starting in February. This creates downside to 1Q GDP growth and upside to 2Q, given favorable base effects.

2. Inventories. Earlier this week we learned that inventories surged in December and contributed 4.9pp to 4Q GDP growth. Inventories remain depressed relative to pre-pandemic levels because of continued supply bottlenecks. And with demand surging, there is room for even more of an increase. However, it is important to remember that GDP depends on the change in inventories (not the level), and GDP growth depends on the change in the change in inventories. Therefore the $173.5bn increase in inventories in 4Q limits the scope for inventories to drive growth again in 1Q. So inventories create more downside for 1Q growth.

3. Less fiscal easing.  We now expect a fiscal package about half the size of the Build Back Better Act, with less front-loaded fiscal stimulus. We think it will boost 2022 growth by just 15-20bp, compared to our earlier estimate of 50bp. Our base case is that outlays will start in April: the delay in passage means that the growth impact relative to our earlier forecast will again be largest in 1Q. Given the deadlock between moderate and progressive Democrats, the risk is that nothing gets passed. We think that the retirement of Justice Breyer increases this risk because appointing his replacement will be a policy priority for Democrats, eating into the limited time they have before the midterm elections. If there is no further fiscal stimulus, we would expect modest downside to 2Q-4Q growth.

Putting together the Omicron shock, the expected path of inventories and our base case fiscal outlook, BofA has cut its 1Q growth forecast to 1.0% from 4.0% and ominously adds that "risks of a negative growth quarter are significant, in our view." To offset the risk of a full-blown technical recession (where we get 2 quarters of negative GDP prints) however, BofA has increased 2Q slightly to 5.0% from 4.0%: this would amount to only partial payback for various 1Q shocks. Growth remains unchanged for 2H 2022, but it would now be coming off a lower base. As a result, BofA's annual growth forecast for 2022 drops to 3.6% from 4.0%. But what about 2023?

The wildcard of course, is the fourth reason for a potential slowdown, namely monetary tightening. As a reminder, with Dems guaranteed to lose control of Congress, any further fiscal stimulus becomes a non-factor until at least the Nov 2024 presidential elections, meaning the fate of the US economy is now entirely in the hands of the Fed, especially if Biden's BBB fails to pass, even in truncated form.

Here the core tension emerges: while the US economy is slowing, BofA still sees inflation remaining quite sticky for a long, long time.

As such, and following the continued hawkish pivot at the January FOMC meeting, BofA now expects the Fed to start tightening at the March 2022 meeting, raising rates by 25bp at every remaining meeting this year for a total of seven hikes, and in every quarter of 2023 for a total of four hikes. This means that BofA's target for a terminal rate of 2.75-3.00% will be reached in December 2023. Harris explains the logic behind this upward revision to the bank's tightening forecast:

... the Fed is behind the curve and will be playing catch-up this year and next. We think the economy will have to pay some price for 175bp of rate hikes in 2022, 100bp in 2023, and quantitative tightening. Given the lags with which monetary policy affects the real economy, we think growth will slow to around trend in 1Q 2023, before falling below trend in 2Q-4Q. This compares to our previous forecast of slightly
above-trend growth throughout 2023.

As the chief economist also notes, at of this moment, the markets are now pricing in 30bp of hikes at the March meeting, 118bp for the year and a terminal rate of around 1.75%. In his view, "that is not enough. Markets underpriced Fed hikes at the start of the last two hiking cycles and we think that will be the case again (Exhibit 2). We now expect the Fed to hike rates by 25bp at all seven remaining meetings this year, and also announce QT (i.e., balance sheet shrinkage) in May. When you are behind in a race you don’t take water breaks."

But how does the Fed hike up a storm at a time when BofA admits the risks are growing for a negative GDP quarter in Q1? Well, as Harris admits, "the new call raises a number of questions."

  • Will the Fed hike by 50bp in March? We think this is unlikely. If the Fed wanted to get going quickly they would have hiked this week and ended QE. Moreover, we see the Fed continuing to gradually concede ground rather than suddenly lurching in a hawkish direction. Hence we think it is more likely that the Fed will quickly shift to 25bp hikes at every meeting.
  • Could the markets force them to do more? On the margin more aggressive pricing in the markets could nudge the Fed along. For example, if the markets start to price in a high likelihood of a 50bp move in March, the Fed could see that as a “free option” to start faster. However, the Fed is still in charge of the narrative. The sell-off in the bond market in recent weeks has been driven by more hawkish commentary out of the Fed. Powell is quite adept at dodging questions at his press conferences, but this week he left no ambiguity about the hawkish shift at the Fed, driving the repricing.
  • How will the economy and markets handle hikes? Clearly risk assets are vulnerable. One way to view the recent stock market correction is that with the Fed no longer in deep denial, markets have caught on to the idea that inflation is a problem and the Fed is going to do something about it. As the Fed pivot continues—and the bond market prices in more hikes—we could see more volatility. However, the stock market is not the economy. The fundamental backdrop for growth remains solid regardless of whether stocks are flat or down 20%. Even the hikes we are forecasting only bring the real funds rate slightly above zero at the end of next year

Then there is the question whether we worry about an inverted yield curve (spoiler alert: yes)?

As BofA notes, historically the yield curve slope — for example, the spread between the funds rate and 10-year Treasuries — has been the best standalone financial indicator of recession risk. However, as now everyone seems to admit (this used to be another "conspiracy theory" not that long ago), "the yield curve is heavily distorted by huge central bank balance sheets and US bond yields are being held down by remarkably low yields overseas, "according to Harris. As such, in an attempt to spin the collapse in the yield curve, the chief economist notes that if Fed hikes lead to smaller-than-normal pressure on long-end yields that is good news for the economy, not bad news (actually this is wrong, but we give it 2-3 months before consensus grasps this).

And while Harris caveats that the Fed could hike even more, going so far as throwing a 50bps rate increase in March "if the drop in the unemployment rate remains fast or if inflation cools much less than expected", we think risks are tilted much more in the opposite direction, namely Harris' downside scenario, where he writes that "our old forecast could prove correct if we have misjudged the fragility of the economy or if there is a serious shock to confidence from events abroad." Actually not just abroad, but internally, and if stocks continue to sink, the direct linkage between financial conditions and the broader economy will express themselves quickly and very painfully.

Bottom line: yes, inflation is a big problem for Biden, but a far bigger problem for the president and the Democrats ahead of the midterms is the US enters a recession with a market crash to boot. While this particular scenario remains relatively remote on Wall Street's radar, we are confident that as Q1 progresses and as data points continue to deteriorate and disappoint, there will finally be a shift in both institutional and Fed thinking, that protecting the economy from an all out recession (if not worse) will be even more important than containing inflation, which as we noted previously is driven by supply-bottlenecks, not demand, which the Fed doesn't control anyway.

Meanwhile, as David Rosenberg points out today, stocks are already in a bear market...

... and absent some assurances from the Fed, we could be looking at another Lehman-style crash in the coming months, especially if BofA's forecast of seven hikes in 2022 is confirmed.

In short, for all the posturing and rhetoric, we always go back to square one - when all it said and done, "it's not different this time", especially once inflation either fades away or its "adjusted" lower, and it will be up to Fed to keep the wealth effect buoyant, the dynamic observed without fail since 2009, and best summarized in the following tweet:

The full BofA report is available to professional subs.

Tyler Durden Fri, 01/28/2022 - 11:10

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Confidence In US Govt Policies At Lowest Since 2014; UMich Survey

Confidence In US Govt Policies At Lowest Since 2014; UMich Survey

After preliminary January data showed a further weakening in University of Michigan’s Consumer Sentiment survey, the final print weakened even further with the headline droppin



Confidence In US Govt Policies At Lowest Since 2014; UMich Survey

After preliminary January data showed a further weakening in University of Michigan's Consumer Sentiment survey, the final print weakened even further with the headline dropping from 70.6 in December to 68.8 flash to 67.2 final. Both current conditions and future expectations also deteriorated during the month

Source: Bloomberg

This is the lowest headline and current conditions print since 2011.

Democrats' confidence dropped to its lowest since the election and Independents confidence are at their weakest since 2012 (as Republican sentiment ticked up modestlY)

Source: Bloomberg

However all parties expectations worsened...

Source: Bloomberg overall confidence in government economic policies is at its lowest level since 2014, and the major geopolitical risks may add to the pandemic active confrontations with other countries.

Source: Bloomberg

Buying attitudes worsened to new record lows for large household durables and vehicles and housing buying attitudes limped back lower after a modest rebound....

Source: Bloomberg

Finally, and perhaps most importantly in the current environment, inflation expectations rose to 4.9% (for the next year) and 3.1% for the next 5-10 years - the highest since 2008 and 2011 respectively...

Source: Bloomberg

It looks like two years of "transitory" preaching has un-anchored the religious belief that The Fed has everything under control.

Get back to work Mr.Powell.

Tyler Durden Fri, 01/28/2022 - 10:11

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Real personal income and spending both decline in December; no imminent worry but evidence of softening

  – by New Deal democratNominal personal income rose 0.3% in December, while spending declined -0.6%. In real terms after inflation, personal income declined -0.1%, and personal consumption expenditures declined -1.0%. Nevertheless both remain well…




 - by New Deal democrat

Nominal personal income rose 0.3% in December, while spending declined -0.6%. In real terms after inflation, personal income declined -0.1%, and personal consumption expenditures declined -1.0%. Nevertheless both remain well above their pre-pandemic levels: 

Here is what the same information looks like using May 2021 as a baseline, after all the stimulus money had been expended:

Since then spending is up 0.9%, while income has declined -1.1%.

Comparing real personal consumption expenditures with real retail sales for December (essentially, both sides of the consumption coin) reveals both faltered for the second month in a row:

Because so many people front-loaded their Christmas spending into October, the subsequent decline is not too concerning. On the other hand, the quarterly graph below shows that real personal income declined in each of the last three quarters of 2021. I think this decline (along with COVID) explains most of the decline in the approval for Joe Biden and Congressional Democrats in general:

I have been expecting the economy to soften (although no recession at least through the middle of this year), and this morning’s income and spending data adds to the evidence.

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