Editor’s Note: For now over 75 years, The Baylor Line has been publishing vivid storytelling from across the Baylor Family. I don’t think our archives full of deep, inspirational features should live solely on shelves, so we are bringing them back to life in BL Classics. This November 1980 Classic highlights the creation of Baylor’s expansive entrepreneurship major and prioritizing the growth of the students studying it.
In 1978, Baylor was among the first universities in the nation to establish a Center for Private Enterprise and Entrepreneurship. Today, Baylor’s center is the most active one in the nation.
A Center for Private Enterprise and Entrepreneurship. So what’s that?
Refer to an economics textbook and you’ll read that private enterprise is the economic system that seeks to encourage individual freedom. The means of production, the businesses and factories, are owned by individuals rather than by the government. Individual initiative is not only allowed, it is encouraged; and the system relies on private decision making rather than on public planning.
“The private enterprise system is also the economic system that has made the United States the most prosperous nation on the earth,” according to Dr. Richard C. Scott, dean of the Hankamer School of Business.
What about entrepreneurship?
What’s “entrepreneurship,” besides a long word of French derivation?
Entrepreneurship is what an entrepreneur does. An entrepreneur is the individual who takes the risk of starting a new venture, moving an existing organization in a new direction or beginning a new product line. Entrepreneurs may be the owners and managers of small businesses or the managers and members of expansion teams within large corporations.
“The process of entrepreneurship is particularly viable within the private enterprise system, providing the individual the opportunity to participate in the system,” explained Scott. “Because most of the innovations come from entrepreneurial ventures, entrepreneurship is essential to the health and well-being of the private enterprise system.”
Baylor’s Center for the Private Enterprise and Entrepreneurship is committed to preserving the competitive private enterprise system, to promoting the entrepreneurial spirit by stimulating economic development through new business ventures, and to increasing the understanding of the operations and benefits of the private enterprise system.
“The private enterprise programs are external programs, designed primarily for those outside the university community. Among the primary participants are teachers on the elementary, secondary and junior college levels and students in elementary grades and secondary schools,” said Scott.
While practicing entrepreneurs participate in Baylor’s entrepreneurship programs, the programs have been designed primarily for undergraduate and graduate students. In 1979 Baylor became one of the first universities in the nation to offer an undergraduate program in entrepreneurship. Currently, only one other university offers undergraduate and graduate programs in entrepreneurship, as does Baylor.
“While private enterprise is a concept that permeates all our business courses, entrepreneurship is an academic discipline. Through the entrepreneurship program, students learn how to identify and evaluate new ventures, to acquire capital and other resources; and to start, develop and divest a business interest,” said Scott.
The Center for Private Enterprise and Entrepreneurship evolved from Baylor’s long history of involvement in private enterprise and a continuing interest in small business management at the Hankamer School of Business.
Throughout its 135-year history, Baylor has been a private enterprise.
Today, the university’s six schools and five hospitals are privately owned and operated without direct state or federal grants for construction or operating purposes.
“Baylor is and always has been a proponent of the private enterprise system both by its example and through its educational programs,” said Scott.
The first courses in small business management were taught at Baylor in 1952 by Dr. H. N. Broom, professor of management. At that time, less than three percent of the nation’s colleges and universities offered courses in small business management.
One of the nation’s first textbooks in small business management was coauthored by Broom and Dr. Justin Longenecker, now Baylor’s Chavanne Professor of Christian Ethics. Released first in 1961, the textbook has been the foremost text in the field through twenty years and five revisions. The sixth edition will be available in 1983 with the addition of Dr. Carlos Moore, Baylor’s associate professor of marketing, as a third coauthor.
The idea for the Center for Private Enterprise and Entrepreneurship began in 1976 as the brainchild of Scott, Longenecker and John Schoen, then a lecturer in management. Schoen, who has a special interest in family-owned businesses and family succession, did the initial fund raising for the center and taught the first entrepreneurship course in new venture initiation. Schoen has since left academia to enter private business.
“Herman W. Lay, a distinguished corporate executive and entrepreneur, was the first to make a commitment to the center through the endowment of the Herman W. Lay Chair in Private Enterprise,” said Scott. Lay, the recently retired chairman of the Executive Committee of PepsiCo Inc., entered business in 1932 as a one-man distributor for a snack food company and founded Lay’s Potato Chips, which was merged with Frito, and later into PepsiCo.
“The center was established formally in 1978 when Dr. Calvin Kent came to Baylor as the Herman W. Lay Professor of Private Enterprise and director of the center,” said Scott.
“Cal Kent is a superstar in private enterprise, and he has far exceeded our expectations for him. In 1980, Cal was awarded the coveted Freedoms Foundation Award for Excellence in Private Enterprise Education,” said Scott. “The award is the Heisman Trophy of economics, and Cal received it for the activities of his first eighteen months at Baylor.”
While the productivity of the American economy may have declined in 1979, Cal Kent maintained his usual supercharged, highly productive pace.
During his first eighteen months at Baylor, Kent gave more than 200 speeches throughout Texas and in fifteen other states. His audiences ranged from a fifth grade class at Waco’s Midway Middle School to the annual meeting of the American Economic Association in Atlanta, Georgia.
Wherever or whenever Kent speaks, he speaks up for the American private enterprise system. Actually, the people who knew Cal Kent as a boy in his hometown of Springfield, Missouri, find it rather remarkable that he speaks publicly at all about anything. As a youth he had trouble speaking a full sentence without stuttering. “I had years and years of speech therapy.” he said.
Those speech therapists in Missouri have reason to be proud. Not only did their client overcome his speech disabilities, but he went on to win both state
The mainspring of the center is Dr. Calvin Kent, a ‘superstar’ in private enterprise who has received the Freedoms Foundation award for his work at Baylor.
and national awards in debate and extemporaneous speaking during his high school years. As a member of the Baylor debate team, Kent shared the 1963 Hamilton Award as the nation’s outstanding collegiate debater with Mike Henke, his debate partner, who is now an attorney in Washington, D.C.
Kent’s interest in economics developed through Baylor debate. “After I did a beautiful job defending an illogical point, Glenn Capp told me I would be a good debater if I only knew what I was talking about,” said Kent.
“In my junior year, I began taking economics courses to become a more effective debater. All the public policy options seemed so much clearer after I had an understanding of economics,” he added.
After graduating from Baylor in 1963, Kent married the former Nita Sue Davis, and the couple moved to Columbia, Missouri, where Kent entered the doctoral program at the University of Missouri. He completed a Ph.D. in political economy, public policy and finance/taxation in a record four years. Kent wrote a 385-page dissertation in three months, further evidence of his high productivity.
The Kents left Missouri to move to Vermillion, South Dakota, where Kent accepted a position on the faculty of the University of South Dakota. He quickly became involved in the state’s legislative process, particularly in the areas of taxation and public finance, the areashe refers to as his “areas of least incompetency.”
Kent served as chief economist to the South Dakota legislature for nine years and held too many committee appointments to list. His responsibilities kept him away from home approximately 190 nights a year. During some of those nights, he was snowed in at the state capitol. During most, he was speaking or fulfilling committee responsibilities.
The Kents and their two daughters, Tina and Anna, moved to Waco in 1978. In winter, Kent still wears the funny tweed cap and scarf of a person who has known colder climates.
Kent’s hobby is and always has been his work, as he readily will admit. “I am most miserable when I don’t have a deadline,” he confessed.
Nita Sue confirms the truth of her husband’s statement. On a recent twelve-day vacation visiting friends and relatives in three states, Kent wrote part of a textbook, prepared four reports, gave two speeches, made a television appearance and dictated thirty letters. His secretary forwarded correspondence to destinations in both Kansas and South Dakota. A lay preacher for First Presbyterian Church in Waco, Kent also taught a Sunday School class and conducted a worship service while on vacation.
Another aspect of Kent’s lifestyle is his grassroots involvement in the community in which he lives and around the state. After all, who would expect a Ph.D. economist to take the time to speak to a class of fifth graders?
Nevertheless, Kent, wearing a bright sportcoat with a windowpane plaid pattern and Captain Kangaroo pockets, has enthralled and entertained a classroom of fifth graders as effectively as Mr. Green Jeans or Miss Piggy, Speaking on “What Is Money?,” he pulled beads, ancient coins, candy bars and dollar bills from his large pockets to illustrate his points.
No group is too small, no group too young, and no group too unimportant for Kent to accept the speaking engagement. His philosophy is that economic education should begin in elementary school — as early as kindergarten — and be integrated into the existing curriculum in elementary and secondary schools. The private enterprise programs of the center implement this philosophy.
Nancy Timmons, supervisor of 150 secondary school teachers in the Temple Independent School District, is one of more than 1,000 Texas school teachers who have participated in the teacher education programs of the Center for Private Enterprise and Entrepreneurship.
Mrs. Timmons attended the 1980 American Heritage Program, a six-credit-hour summer school course on foundations of the American economy and basic American documents. Funded through a grant from the Texas Bureau of Economic Understanding, the program is designed to demonstrate how the principles of private enterprise can be taught in a variety of classroom situations.
“The program provided me with an excellent learning experience of a very practical nature. Through the course, I developed four different programs for in-service training workshops that I’ll present in the coming year and a game simulation for tenth grade students,” said Mrs. Timmons.
The workshop programs are on basic economic principles, using the newspaper to teach economics, the U.S. Constitution and the Bill of Rights. Th game simulation is entitled “All the World’s a Marketplace” and deals with the concepts of a favorable balance of trade.
“It is of utmost importance that teachers be prepared to teach students to be economically literate. The price of economic illiteracy is too costly, and if the schools don’t teach it, it won’t be taught,” said Mrs. Timmons.
In addition to the American Heritage Program, the center staff has conducted workshops in 168 school districts, consumer economics forums, and seminars on environment and economics. The Texas Bankers’ Association selected the center to conduct twenty-two regional workshops throughout Texas on money, banking and the economy.
Dr. John Pisciotta, formerly the chairman of the economics department at the University of Southern Colorado, joined the Baylor staff last summer as the director of economic education and the E. M. and Thelma Stevens Professor of Private Enterprise. Shirley Love Thomson is the assistant director for economic education.
If you want some tips for trading on the stock market, contact the thirteen students at Medina Valley High School in Castroville, Texas, who won first place in the statewide Stock Market Game Competition. The competition was co-sponsored by the Center for Private Enterprise and Entrepreneurship and the Securities Industry Association-Texas District.
The Medina Valley students were among 3,000 high school students throughout the state who made daily transactions on the “Big Board” through the Baylor computer. Each team was given a hypothetical balance of $100,000 at the beginning of the ten-week competition, and the teams realizing the most return on their investments won cash prizes. The winning team at Medina Valley High School realized a return of eight times the original investment.
“In addition to developing an understanding of financial markets, the stock market game teaches the fundamentals of capital formation as well as supply and demand.” said Mrs. Thomson, who directed the 1980 competition.
“Students also learned to analyze the effects current events have on the economy. During the competition, the students avidly read the newspaper and many financial news publications in search of tips for trading stocks,” she added.
What does an entrepreneur do with his time? Baylor senior Bruce Benton can tell you from firsthand experience. Last summer, Benton served as an intern to Bruce Bowles, president of the Baptist Church Loan Corporation in Dallas, an independent company that raises capital and makes loans to churches.
“An entrepreneur’s day is varied, with no set patterns or routines. Things are always changing, and the entrepreneur often has to deal with the unexpected,” said Benton.
“During the summer, I worked directly with an entrepreneur, even attending meetings with the board of directors, attorneys and accountants. I accompanied him on an out-of-town business trip to check on construction, and I was in on making the biggest decision facing the company this year,” he said.
“So many of the things I had learned in school that were floating around my mind were confirmed as I saw the way things happen in everyday life,” Benton added.
Through the internship, Baylor students majoring in entrepreneurial studies have the opportunity to work directly with entrepreneurs in cities throughout Texas for a ten-week period.
“Although students may acquire the skills in the classroom, entrepreneurship must be experienced to be learned,” said Dr. Donald Sexton, director of entrepreneurial studies and the Caruth Professor of Entrepreneurship.
Sexton himself has spent quite a bit of time outside the classroom. Before entering academia, he had a distinguished sixteen-year career in industry. In business, Sexton earned a reputation as a “turned-around” artist, an executive who takes a failing operation and turns it into a profit maker. He dramatically brought four failing operations into the black, each in less than eighteen months.
While the classroom curriculum includes courses in venture finance, venture accounting and taxation, new venture marketing strategies, and strategies for the management of growth, the entrepreneurship programs provide opportunities for students to work in the field on class projects through the Venture Program, as well as through summer internships.
Through the Venture Assistance Program, teams of students working under the supervision of the center’s staff have assisted forty businesses in Central Texas. The teams consult with individuals initiating new ventures and counsel existing businesses as well.
Jerry Smith, a student and one of the students participating in the Venture Assistance Program last spring. He conducted a comprehensive analysis of Republic Tank and Supply, a Temple-based company manufacturing tank trailers for transporting oil by-products. The company’s management was impressed with Smith’s work, so impressed that they hired him as a controller when he completed his degree last August.
Cory Emmert, owner of Airfre Filter Service, decided to expand his business of maintaining filtering systems in air conditioning units to include manufacturing room air purifiers for people with allergies. He called on the Venture Assistance Program for help in testing and marketing the new product.
“The students did a comprehensive study of the market, doing things I didn’t know how to do,” said Emmert. “Now, two of the students want to market the room air purifiers locally,” he added.
The Venture Assistance Program provides a valuable resource for businesses as well as learning experiences for students, as Vicki Smith, owner of Heritage Soap and Candlemakers in Marlin, can testify. In 1979, the energy crisis put a tight squeeze on candlemakers because wax is a by-product of oil. The energy crisis, coupled with minor business problems, prompted Mrs. Smith to call on Sexton and the students. With their help, she was not only able to cope but to expand the business in 1980.
In addition to providing assistance to businesses in the start-up phase, the Center for Private Enterprise includes an Entrepreneur in Residence and an innovative Evaluation Program to assist inventors test the idea and economic feasibility.
“For $50, an inventor can get an evaluation to determine the commercial potential of his or her product idea before investment are made to patent, develop or market the product,” said Sexton.
The evaluation process begins with an extensive questionnaire dealing with criteria essential to successful innovation. Answers to the questionnaire analysis and an evaluation by a team of experts, including manufacturers, marketing representatives and members of the financial community.
“Baylor’s evaluation was prompt and right to the point,” says George Montalba of Torrence, California, who has had two innovations evaluated through the program. Both of the innovations are construction tools, a screwdriver and a wrench redesigned for increased effectiveness and convenience.
“The evaluation was also impartial, something an inventor appreciates. Most of the organizations offering innovation evaluations need inventors on set up as much money as possible. Because Baylor has no interest in the new product after the evaluation, its service is impartial,” said Montalba.
Sexton confirmed that an inventor could spend as much as two thousand dollars getting comparable consulting services from a commercial firm. “Baylor’s innovation evaluation service is the only one of its kind available in the southern part of the country at a modest cost,” said Sexton.
Why is Baylor doing what it’s doing in private enterprise and entrepreneurship education?
“Baylor is a participant in the non-profit part of the private sector. As a private institution, the university does not feed at any government trough. Actually, Baylor’s survival and prosperity are linked directly to the survival and prosperity of the private sector of the economy,” said Kent.
There is a second, more philosophical reason for Baylor’s active involvement in private enterprise and entrepreneurship education.
“Freedom of enterprise is as basic as any other freedom,” said Kent. “There is not a nation on earth where freedom of enterprise has been restricted without restriction of other freedoms as well.”
“Actually, the First Amendment is misleading. There are not four types of freedom. There is just freedom,” said Kent.
“Maintaining free enterprise is crucial to the preservation of freedom,” he added.
An approach to teaching economic theory that’s all wet
Economics is anything but a dry subject when Dr. John Pisciotta, Baylor’s director of economic education, is lecturing. Pisciotta uses a water-powered teaching aid that runs on fifteen gallons of water circulated by hydraulic pumps. He invented the teaching aid, called an economics tank, to make complex economic policy and theory easier to explain and easier to understand.
Formerly, Pisciotta relied on the standard graphs and mathematic representations for introducing economic theory and policy. “From the outset of my teaching career, I sensed the inadequacy of this approach. As a result, I began searching for ways to get the point across to students, and I came up with the idea of representing the various economic factors with water flows,” said Pisciotta.
The economics tank has three water faucets representing the three categories of spending — consumption, business investment and government purchases. The tank incorporates the three water flows to show the economy’s production or real Gross National Product (GNP), demand-pull inflation, cost-push inflation, monetary policy and fiscal policy. It also has indicators for showing the economy’s production capacity and the unemployment rate.
By manipulating the water faucets, Pisciotta can demonstrate the ways various aspects of the economy respond to changes in
consumer confidence, business expectations and government policy. For example, Pisciotta uses the economics tank in explaining the tax policies of Carter and Reagan. Both politicians are proposing large tax cuts for both businesses and consumers that are designed to stimulate business investment and consumption purchases.
Pisciotta illustrates the effects of the tax cuts by turning up the “investment” and “consumption” faucets to increase the flow of water into the tank. In response, the economics tank adjusts to the increase in demand. For example, the water level, which indicates the capacity utilization rate or the percentage of the economy’s production facilities in use, begins to rise. The real GNP dial turns to the right, indicating more production, while the gauge for the unemployment rate drops to a lower level.
The economics tank is completely portable and can be transported easily. Pisciotta uses it in his Baylor classes as well as in presentations to teachers, business and civic groups and professional organizations. Pisciotta has taken the model to Toronto, Canada, where he demonstrated it to members of the Canadian Foundation for Economic Education and to its American counterpart, the Joint Council for Economic Education.
“While the economics tank may not point the way to ultimate solutions for our economic problems, it is a tool for understanding the nature of the problems and the policy choices we have before us,” said Pisciotta.
