Venturing Into the Real World : UCI Program to Help Entrepreneurs Start Businesses : TIFFANY S. HAUGEN : Q & A

Since she was 13, electroplating dipsticks for U.S. Army tanks in the basement of her family’s Wisconsin home, Tiffany S. Haugen has been intrigued with small businesses and innovative operations.

Her parents founded 8-K Finishing Co. as a way for their eight children to work after school and earn money for college. The 8-K stood for “eight kids.”

Haugen, now 40, has helped many other small businesses get started, first as a lawyer with a master’s degree in business administration, then as a teacher.

She recently was signed by UC Irvine to direct a new academic venture tentatively called the Center for Innovation and Entrepreneurial Studies. Her job is to develop a program for the center, which will be part of UCI’s Graduate School of Management.

Haugen envisions a program that would provide research and education for professors and students as well as a system to help real-life entrepreneurs get their businesses going. Ultimately, the program is intended to help speed the transfer of knowledge and technology from academia to industry.

In her former job as executive director of the Business Research Bureau at UC Riverside, Haugen authored a nationwide study of business incubators, which are office buildings where private consultants or governmental entities foster the growth of new firms. Santa Ana, for instance, sponsors a business incubator in a downtown building.

Haugen, in a recent interview with Times staff writer James S. Granelli, explained the concept of entrepreneurship studies and her hopes for building a multifaceted educational and resource center at UCI.

Q. What is an entrepreneur?

A. There are many definitions. But I think the definition we’re looking at is someone who creates some sort of innovation and turns it into a business.

Q. The traditional view is that they are the idea people, the risk-takers who get their companies going and then call in the business executives to run the companies. Is that view still viable?

A. I think they comprise a part of it. I think there is starting to be a distinction made between a person who starts up a small business in which there is not necessarily an innovation component. An example is a person who starts up a local grocery store simply because there is a market need. That really does not include an innovative component, there is simply a market need there.

Q. What makes the study of entrepreneurship different from more traditional business studies?

A. In the traditional business education, we’re actually studying administration. In the study of entrepreneurship, what we’re studying are different components--the risk component, the strategic planning component and so forth. It’s a picture of innovation risk that is definitely different than an administration type of picture. It includes different ways of approaching business.

Q. Why is there a need to study entrepreneurship and entrepreneurs?

A. Well, I think the whole need for it arises out of the recognition that jobs and economic development are coming from the small start-up ventures. Research by David Birch, a professor at MIT (Massachusetts Institute of Technology), studied the creation and dissolution of firms and job creation from 1969 through 1985. It showed that firms with fewer than 20 employees were creating most of the new jobs in the United States, whereas the larger firms with over 500 employees were actually having a net loss in jobs.

Q. Has his study been a spark for studying entrepreneurship?

A. He did a longitudinal study. It took 12 years and in the process, there were papers published. In other words, bits and pieces were being released. The final book came out in 1987. His work was largely known by the time the book came out. I think his study has made a big contribution.

Q. In what ways?

A. One of the things that has happened after his study came out is that federal, state and local governments started taking note of the fact that if they wanted economic development and they wanted jobs that they should be looking at some of the systems to foster the businesses. And so they have been pumping money into small businesses to help this.

Q. Is the study of entrepreneurship so new that the professors are basically researching it as they’re teaching it?

A. Well, hopefully that’s always going on. You’re supposed to be researching and teaching at the same time. There is a decent amount of research going on in the field at this point. It’s a totally new, developing field. There is a limited number of texts currently available in the area. And people are just learning how to teach this. There’s some question yet in the research whether you can actually teach students to become entrepreneurs or whether they’re born entrepreneurs.

There have been a lot of studies about entrepreneurs--personality studies, background studies. They’re trying to say who is this person. I looked at a lot of the studies and they’re not necessarily consistent. I would say at this point that there is probably a high likelihood that, given the right environment, you in fact can teach entrepreneurship.

Q. How many schools across the nation offer courses in entrepreneurship?

A There are only a couple of schools which have a Ph.D. emphasis in entrepreneurship. There are probably 10 or 12 that offer an emphasis in the MBA. And then many schools simply offer a single course in entrepreneurship.

Q. What schools offer an emphasis in the Ph.D. programs?

A. We have one out in Babson College in Wellesley, Mass. It offers a degree. USC is considering offering a Ph.D. in entrepreneurship. It has had an MBA in entrepreneurship for a few years. And there may be others that offer a Ph.D. To a certain extent, some of the job of developing our program here is a lot of sleuthing to find out what other people are doing.

Q. What kind of student would take these courses and what could they expect to learn from them?

A. I think the students probably fall into two categories. One is the type of student who simply wants to start his own business. In fact, many of them who walked into entrepreneurship programs already have a product or a service, and they really want to learn how to take it off the ground and just start their own business.

Q. Do they already have a college degree or operate a business?

A Sometimes. Sometimes, in fact, they’re very young students. They’re in their early 20s and they have decided that they want to go into their own business.

Q. What is the second general category?

A. There are other students who are interested in it from an innovation standpoint. In other words, how does innovation come about within a firm. There’s an interest level there without a desire to actually start a business.

Q. You’ve just started work on developing UCI’s entrepreneurship center. What are you doing at this stage?

A. We are looking at putting together the appropriate components to have an MBA emphasis. First, we are going to be studying what other people have done, meeting with advisory groups, making recommendations, starting to delineate the type of program that UCI would like to have. Then, probably six to nine months from now, something like that, we’ll have a more formal plan for the type of academic course of study we’ll be offering. So we really are in, shall we say, the pre-start-up or feasibility stage.

Q. What is your role?

A. What I will be doing is working with faculty here in the graduate school of management and with other faculty in other departments on campus. We’re also going to be working with business leaders in the community to determine what their needs and desires are and what valuable input they might have.

Q. In the long run, what would UCI’s Center for Innovation and Entrepreneurial Studies do?

A. Ideally, the center will fulfill two major functions. One is to provide a strong leadership position in terms of academic research and teaching in the study of innovation and entrepreneurship. The other is to provide a strong linkage between the university and the business community in terms of different sorts of business assistance, which would include a technology transfer component, or getting the technology off the campus into businesses to make us globally competitive.

Q. How long do you think it would take to reach that goal?

A This is not a set goal; this is a developing process. Some of the things we are looking at right now include developing databases to make linkages between, for example, investors and inventors. That will be one level of service, like a computerized matchmaking type of service. We also anticipate that as we go along there might be additional contacts that could made. There could be seminars. There could be industry-university forums. There’s all sorts of different things that could be done in terms of linkages.

Q. What could be done academically?

A. There are all sorts of things that can be done from an academic point of view. For example, we could develop an MBA program that could simply be the study of entrepreneurship. We could add on a practicum course that would link students to actual entrepreneurial businesses. That’s a mutually beneficial type of arrangement because the student would be learning about an entrepreneurial business and the business would be gaining the assistance of a student who is being trained in the area to help out in some of their things. And we’re hoping to support research in entrepreneurship and innovation.

Q. In linking up with new business concerns to provide entrepreneurs with services, won’t you be competing with the multitude of business consultants, venture capitalists, lawyers and accountants who make a living by trying to do many of the same things?

A. Not at all. In fact one of the things we’re going to be doing in the process of putting this particular unit together is studying what the other service providers out there are doing. We are not at all trying to compete. What we’re trying to bring into this whole process is the appropriate university role into that whole system.

Q. Let’s say I have an idea and a rough plan, but I don’t have much money. And I don’t know anything about business. Ideally, once UCI is set up, would I be able to learn everything I would need to learn and to meet the people I need to meet in order to get my business off the ground?

A. I would say, first of all, you probably would be able to learn here from an academic standpoint the basics of entrepreneurship and what exactly starting a business means. So that would be totally from educational standpoint you would be able to do that. You’re asking whether or not we would provide individual consulting services. I would say at this point that that type of service, unless it conformed with particular innovation or technological entrepreneurship role that we’re looking at, is something we probably would not provide you with. However, we are anticipating putting together some sort of system whereby we would refer you to other types of groups who may help you. For example, there is a small-business development center that may offer the type of things that could help you out. There’s probably a number of service providers, private ones, who might talk with you for a few a hours.

Q. You would set the center up, in other words, as a resource center for the community?

A. Yes, more of a resource center. I think it’s very important in this process to recognize that there are a lot of very good groups out there, both public and private, that are already offering good services. We intend to complement those groups in fulfilling a proper university role in that endeavor.

Q. Would the center be acting as an incubator for new enterprises in a county that already has been a hotbed of small business activity for some time and has the apparatus in place to nurture developing companies?

A. I don’t know if I would use that particular word--incubator. The University of California system, in general, is intensely interested in developing an effective technology transfer system. We’re in an age where we see increasing global competitiveness and quicker obsolescence of technology. We can no longer sit still with a detached university attitude that says, “Let’s do some research, and we’ll wait until somebody discovers it and decides to put it to use.” What we’re saying is, “How can we accelerate that process? How can we facilitate this?” This has always been the land-grant university, and as such, its role has always been to help educate the labor force, to increase research and to do some community service. So what we’re looking at is largely a new means, new methods, to do that. The university is also recognizing here, in this area, that one of the largest groups that we’re looking to help is the entrepreneurs. Southern California is basically the place in the United States for entrepreneurial business.