Intercultural experience sparks entrepreneurialism

April 24, 2016

What has long been an integral part of the WU Executive Academy's MBA programs has now been scientifically proven by Prof. Nikolaus Franke, the head of WU Vienna's Institute for Entrepreneurship & Innovation: He recently carried out a research project examining the effects of moving from one cultural setting to another. The results speak for themselves: Intercultural experience significantly improves people's ability to spot entrepreneurial opportunities.

Andrew Carnegie (steel tycoon), Sergey Brin (Google) and Attila Doğudan (Do&Co) are only a few examples of successful innovators and entrepreneurs with migration backgrounds. According to recent research findings, their achievement of extraordinary success can be attributed mainly to selection effects. Those who emigrate and embrace new lives are also more inclined to take entrepreneurial risks.

Prof. Nikolaus Franke is pleased with the research results.

Intercultural experience is important in itself

In a remarkable first, Prof. Nikolaus Franke and Dr. Peter Vandor of WU Vienna's Social Entrepreneurship Center have explored a different explanation: They hypothesized that intercultural experience had an effect in itself. The more people get into contact with different cultural settings, the larger a pool of knowledge and experience they can draw from, and this in turn is the single most important asset as far as the ability to recognize entrepreneurial opportunities is concerned.

In order to test their hypothesis, the two researchers developed a special test method and measured the entrepreneurial skills of WU Vienna students before they went to study abroad for a term and after they returned. More than half of WU Vienna's students spend a term abroad as part of their training. Prof. Franke and Dr. Vandor also measured the skills of controls who had stayed at home during the same period of time. The results of the comparison speak for themselves: While the entrepreneurial skills of the first group had improved by 17%, those of the second had even gotten slightly worse.

In order to find out more about the reasons for this increase, the researchers carried out a so-called priming study with entrepreneurs from migrant families. In the test group, they used a small task to make the entrepreneurs remember their intercultural backgrounds. In the control group, they did not. At 26%, the difference between the two groups was even bigger than that in the first study.

“Two effects make intercultural experience so important: First, you have more ‘experiential building blocks’ at your disposal that you can combine in novel and creative ways, and, second, you can transfer from abroad products, services and business models that already exist there but whose potential has not yet been harnessed in your country,” explains Prof. Franke, who is also the academic director of the WU Executive Academy's Professional MBA Entrepreneurship & Innovation.

The MBA—a classroom-based microcosm

MBA classes promote intercultural exchange.

In Prof. Franke's view, the two studies clearly show why the special setting of the WU Executive Academy's MBA programs is hugely beneficial in terms of fostering students' innovative spirit and entrepreneurial mindset:

“The MBA is a microcosm, if you like, that brings together executives from various cultural, industrial and functional backgrounds. Basically, we simulate what it means to move from one culture to another and to embrace new experiences—and we do this in a very intense and highly structured manner.”

Alumna Rana Grillberger shares an idea she recently had while talking to one of her former MBA colleagues:

Rana Grillberger

  • Research Scientist in Exploratory and Preclinical R&D and an alumna of the Professional MBA Entrepreneurship & Innovation

Recently, I met an MBA classmate who comes from Iran. He told me that he enjoys pressing oranges with old manual machines to drink freshly made drinks and that in his childhood he liked to watch his mother pressing delicious fresh oranges. I told him that in the ‘souks’ of Tripoli, a city in Lebanon where I come from, local farmers have mobile cars where they transport kilograms of local oranges and press them on demand and sell the juice for cheap prices. This service was very normal for me but turned out to be very attractive for my Austrian husband who enjoyed this service during the hot summer holidays in Tripoli.

We came with a funny business idea that is installing a distributor of oranges and an old fashioned manual orange pressing machine along the WU campus where students purchase their own oranges and enjoy pressing by themselves their fresh oranges. Now, with the help of an Austrian beverage company, this business idea could be easily implemented at the WU Campus. When I analyze the way we identified such an opportunity I can say that exchanging ideas about various cultures can indeed generate potential business opportunities in new markets.

Tomasz Pilewicz, who is also an alumnus, has had the same experience:

Tomasz Pilewicz

  • Public Affairs & Government Relations Manager bei Philips und Professional MBA Entrepreneurship & Innovation Alumnus

It was really amazing to see what happens when more than 100 students from over 30 countries get together to share their professional experience, cultural characteristics and personal views with one another: The quality of the discussions in general and the results of the individual projects in particular have provided me with completely new perspectives, giving my career a big boost.

Prof. Franke again: “Internationality is fundamentally important in this context: This applies to students and lecturers as much as it applies to curricula. During international residencies, for instance, our students vastly broaden their horizons—they get to discover fresh perspectives and develop a completely new understanding of entrepreneurial opportunities. Moreover, they learn to take cultural differences into account and can familiarize themselves with the special characteristics of local markets in the course of company visits. Faculty is crucial too: The more international the expert faculty, the greater the variety, the impetus for thought and the inspiration. This in turn boosts participants’ creativity and motivation to implement (professional) ideas together. Experiencing the familiar from an unfamiliar perspective requires students to readapt—and thus reflects the realities of today's business world.”

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