New MYOB study says tertiary students aren't ready for the modern business world

The education system has more work to do to prepare tertiary students for the job market, according to a new survey of small business owners.

The latest MYOB Business Monitor survey of more than 1,000 small-to-medium businesses reveals that 44 percent do not believe that the education system gives students the skills they need to work in their business. Only 18 percent said it does.

MYOB New Zealand’s head of SME, Ingrid Cronin-Knight, says these figures are hugely concerning. “The education system needs to ensure that it is providing students with the skills they need to succeed in their chosen career,” she says. “This survey should serve as a wakeup call.”

That “wakeup call” is especially important given widespread skill shortages, Cronin-Knight explains. “Many businesses report they are facing skill shortages,” she says. “Having people come through the education system that aren’t work ready only makes that situation worse. It also tightens the job market, with many students potentially struggling to secure a job in their first year out of study, meaning they are competing with progressive waves of graduates.”

Within the survey, the construction and trades sector are the most concerned about the unpreparedness of students, with more than half (56 percent) saying they did not believe that students left study with the necessary skills. The retail and hospitality sector, however, were the most confident in the abilities of graduates, with 37 percent of respondents reporting students were appropriately skilled.

Concerns about entrepreneurialism and innovation

When asked if the education system gives students the skills they need to be entrepreneurs and innovators, almost half of all businesses surveyed said they believed it fails to do so, versus just 16 percent who said that they think it does.

“This is disappointing. The students of today will be the innovators of tomorrow,” says Cronin-Knight. “We need a strong education system that teaches students about the theory of business management, provides them with hands-on experience, as well as developing the critical faculties that drive innovation and entrepreneurialism.”

Startup incubators are helping, she says, but it’s not enough to combat what may be a systematic issue. “New Zealand is making real progress here with the likes of Lightning Lab, Icehouse, the Ministry of Awesome and other entrepreneurial programmes at many of the country’s tertiary institutions. However, we need to look at the whole system to see if there is something more we could be doing.”

She adds that MYOB works closely with various education institutions around the country to help the next generation of students develop the skills they need to be successful. “We are involved with several activities through various tertiary institutions to help give students an understanding of the business world. This includes supporting the National IT Challenge, Brand Challenge marketing competition, running hackathons, graduate programmes and sponsoring several awards.”

Several tertiary institutions around the country are also doing their part to enhance entrepreneurial opportunities for students. For example, the University of Canterbury’s Centre for Entrepreneurship opened in February. Centre manager Michelle Panzer says it is focused on building students employability, innovation skills and entrepreneurship. “Ever since the earthquakes, the university has looked to provide courses that ensure our students are ready to succeed in the business world,” she says. “Within the Centre for Entrepreneurship we now have an incubator programme to help students get their own business ideas off the ground. In 2017, we will introduce a new ‘Enterprise in Practice’ course to give students the chance to apply their academic skills and knowledge to managing a practical project for a new or existing for-profit business or social enterprise venture.”

That’s not all that’s going on, she says. “In addition, the university offers the Summer Start-Up Scholarship. It provides a successful student with a $5,000 grant to work on a business idea of their own. There are several opportunities out there for students who are looking to get extra experience in business. All tertiary institutions around New Zealand have programmes to help students learn the practical realities of commercial life.”

The University of Canterbury in Christchurch.

Business ownership

Only nine percent of SME operators surveyed said they believed students entered the workforce with the skills required to run their own business. Businesses based in the Hawkes Bay (73 percent) and Wellington (61 percent) were the most pessimistic, with a large majority reporting they did not think students had what it took to become successful business owners. Within the industries, 65 percent of construction and trade SMEs felt the same way.

“While these statistics do come as a shock, there’s plenty of ways to fix the problem,” says Cronin-Knight. “There are many great examples of young people starting up their own businesses, so it’s not all doom and gloom. Take James Koo for example, he started his own university printing business and it has become so successful it has recently moved into larger premises.”

Koo co-founded Auckland-based Niesh last year, with the ambition to make life easier for students by offering them a free printing service. “At Niesh, each student gets 100 free pages of printing per month, funded with a banner advertisement along the bottom of each page,” he says.

Koo adds that it was the plight of fellow students that got the innovation ball rolling. “One of our co-founders had limited funds in the lead up to exams and was caught between the decision to print past papers for his study, or buy food. He chose to feed himself but later wondered if he could have achieved better marks in his exams if he’d opted for the printing.”

Since its launch, Niesh has grown rapidly, from a small operation borrowing the space of a friend’s shop, to a fully-fledged business occupying its own premises and there are ambitions to grow it even larger. “We think there are three key elements that make for successful students: being financially stable, achieving academic excellence and building solid connections,” says Koo. “We would like to spend time focusing on the latter two here at Niesh.”

As a student, Koo studies a double degree in commerce and science at the University of Auckland. He says he believes the New Zealand education has some way to go before it can adequately prepare students for the world of work. “For specialised occupations such as lawyers, doctors, accountants, university study is essential,” he says. “But for the likes of business students, I’m not sure the fit is quite right. At university a lot of what you learn is theory based with limited opportunities for hands-on education. Being in business myself, I’ve learned that often the theories you’re taught can’t be implemented straight away anyway. Really, the best way to learn is from experience.”