Changing Higher Education

New on the for-profit higher education front

Apollo Global announced on April 29 that they are in discussions with BPP Professional Education, with an eye toward a possible purchase (for background, see my earlier report on Apollo's international activities). BPP Professional Education teaches a variety of professional development courses in areas such as accounting, finance, law, etc. The web site describes teaching centers in 11 countries (plus the UK), and many programs are also taught using distance learning. More notably, however, BPP contains the BPP College of Professional Studies, which in September 2007, became the first publicly owned private company in the UK to be awarded degree granting  powers.  The College is composed of a business school, and a law school. Should the discussions lead to a purchase, the price is estimated to be around $460M US.

On the home front, many smaller non-profit colleges have been struggling for years with declining enrollment, and increasing debt.  The current economic downturn is providing the "last straw" for some of them, and they are finding that the only practical solution is to be absorbed by a well-funded for-profit higher education corporation. In the past few weeks, Daniel Webster College, the College of Santa Fe, and Waldorf College have all taken steps in that direction.

On the 24th of April, Daniel Webster College announced that it had sold itself to ITT Educational Services.   Daniel Webster is located in Nashua, NH, and has about 1000 students, 750 of them residential. According to an article in the Nashua Telegraph, Daniel Webster had been considering a sale for several years because of financial difficulties.  According to this article:

Daniel Webster College President Robert "Skip" Myers said ITT has plans to eventually expand Daniel Webster into a regional and then national brand of schools.......
Daniel Webster College will remain autonomous from any of ITT's technology-oriented programs, with the faculty continuing to run academics and complete separation, Myers said. The name will remain except for a minor alteration: After the sale, it will be eventually known as Daniel Webster University. Distinction as a university will allow Daniel Webster College to not only increase students and faculty on the Nashua campus, but it would fit with the school's and ITT's goal to offer a "learning network" that will stretch across New England and eventually the country, Myers said.

This would be an interesting new strategy for ITT should it come about.

The College of Santa Fe has also been running a large deficit for considerable time. The College has only about 800 full-time students, and discussions with other non-profits regarding mergers,etc. had not worked out. Over a year ago, the College of Santa Fe entered into discussions with Laureate Education about a sale (see my earlier report on Laureate's move into the US).   Laureate was interested, but negotiations with creditors over existing debt apparently did not go well, so Laureate seemingly dropped out of contention. In December, it appeared that New Mexico Highlands University might take over the College, although there seemed to be no idea of where the necessary resources might come from.  The newspaper article describing the Highlands bid also stated that the faculty of the College had "surrendered" tenure "in order to court the for-profit education corporation, Laureate."  However, on May 1, Laureate rose like the Phoenix, and New Mexico Governor Bill Richardson announced a partnership between the State of New Mexico, the City of Santa Fe, and Laureate to "Save College of Santa Fe": 

The partnership envisions the City of Santa Fe, with support from the Governor’s Office, purchasing the college and then Laureate operating the college under a lease.

The Governor has pledged $11M to the deal. Even better of Laureate, the Governor has pledged his support in negotiating with creditors to bring the existing debt down to manageable levels.  So there is a reasonable chance that the College of Santa Fe will soon join the Laureate International Network.

Can for-profit education save the free press?

The Washington Post Company has just released its 2008 earnings report.  The Washington Post and Newsweek, like most other print media, are having financial difficulties under the two pronged attack of the digital revolution and the severe downturn in the economy.  The two had an operating loss of about $212 M in 2008, compared to an operating income of about $190M in 2007 .  The television broadcasting division also saw decreasing operating income (-13%), but still had a substantial positive contribution of  $123M to the company’s bottom line. On the traditional communications business side of the leger, the big winner was the cable television division, which achieved an operating income of $162M, or a 31% increase above 2007.

The most profitable and fastest growing division of the Washington Post Company was its division that has little to do with communication in the traditional sense - Kaplan.  Kaplan’s operating income was $206M, up 38% from 2007.  Education almost covered the loses of the company’s flagship print divisions!  

Unfortunately, the print divisions are losing ground faster than the education division can grow, so this rough balance is unlikely to persist unless the print divisions can make a major turn-around.  Thus, the answer to the question of the title of this post is probably “no”, at least insofar as the question relates to the Washington Post Company. However, the Kaplan division is obviously going to be a major component of the Company’s attempts to find a solution to its problems. 

The other information that can be gleaned from this is that at least one company in the for-profit education field is growing rapidly in these difficult times. Maybe every corporation should have a for-profit education arm?

A major contribution to our understanding of for-profit higher education

As I went over the not-done parts of my “to do” list from 2008, I found that I had never gotten around to a post about an excellent book on for-profit higher education written by two of my USC colleagues, Bill Tierney and Gib Hentschke.  So although it is a year late - I want to comment on what is now not -so-new, but still excellent New Players, Different Game: Understanding the Rise of For-Profit Colleges and Universities, by William G. Tierney and Guilbert C. Hentschke.

Few issues in higher education produce more heat than the role of for-profit higher education.  Extreme positions abound, generally based on statements of high principle that are only marginally related to real conditions.  Rational discussions based on reality and facts are hard to find.   In this charged atmosphere, Tierney and Hentschke (T&H) have done an excellent job of providing an even-handed, broadly ranging discussion of for-profit higher education that is based on real data involving both for-profit and non-profit worlds of higher education
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T&H begin by boldly stating on page 1 that “for-profit institutions represent a new, fundamentally distinct type of postsecondary education.” They then spend the next 200 pages comparing and contrasting the for-profit colleges and universities (FPCUs) with traditional non-profit colleges and universities (TCUs).  They look at customers, organization and governance, aspirations and missions, outcomes, etc. They describe strengths and weaknesses of each system with respect to a variety of  viewpoints and policy perspectives.  Importantly, throughout the book, T&H remind us that there is not “a” model either for FPCUs or for TCUs.  Rather, each system is notable for its considerable diversity in most of the parameters that they consider.

Along the way, they invoke Clayton Christensen’s powerful theory of disruptive technologies  to consider ongoing change within the TCUs as compared to the innovations being produced by the FPCUs.  In this context, T&H pose the theme for their work: “The question, then, is not simply whether for-profits are at work inventing and implementing disruptive technologies, but how these technologies will be manipulated and used in advancing a postsecondary education.” 

In order to answer this question, T&H consider the changing environment for higher education generally, and ways in which some of these changes have favored the for-profit sector. They provide solid data on growth in the for-profit sector - types of students, types of programs, degrees and certificates, revenues, etc.  They also look closely at differences in governance and finance between the two sectors, and how these differences drive many of the external aspects of the sectors. Important questions of  public policy relating to differing possible outcomes of higher education are raised and discussed at some length. 

The final chapter reinforces the five themes that have run through the book and that the authors believe will frame postsecondary education in the coming decades: the changing environment for higher education generally; innovation in higher education; issues of delivery and content; increasing amalgamation of cultures due to blurring borders between the FPCU and TCU sectors; and increasing differentiation between individual institutions.

Overall, this is an outstanding and, in many ways pathbreaking, contribution to our understanding of the ongoing evolution of postsecondary education in the United States.  I recommend it to all who are interested in more fully understanding the for-profit higher education sector.

Laureate keeps on building a global brand

Doug Becker, the CEO and Chairman of Laureate, has done a masterful job of inventing a truly global university.  He and his excellent team have built a very visible, positive global brand for Laureate, one that depends on more than their many campuses spread around the world.  He has understood the importance to his brand of working with international public agencies such as the World Bank, and having a visible presence at international meetings on higher education.  

This photo captures perfectly one of Becker's more recent steps in global brand building.  At the December 3, 2008 the Clinton Global Initiative Asia Meeting, Becker announced an international scholarship initiative for deserving teachers around the world to enable them to get an advanced degree in  education, business, or information technology. Laureate will award 1,000 scholarships in this program, which is named in honor of Richard W. Riley, former U.S. Secretary of Education during the Clinton Administration.  The scholarships will be to attend institutions in the Laureate International Universities network.  Because the network has universities in 20 countries, this program likely will both be widely visible internationally, and have local impact in areas where the awardees teach. Of course, because the network is so large and well developed, the marginal cost to Laureate of these scholarships will be small. Other competitors -all smaller- would have difficulty in getting such a beneficial impact/cost from a similar brand-building effort.  Another example showing that size matters, and Becker and his team are working hard to capture first-mover advantage in the field of global higher education .

New global higher education activities by the Apollo and Carlyle Groups

 

A little over a year ago, I noted that the Apollo Group (parent of the University of Phoenix) was partnering with the global investment firm Carlyle Group to form a joint education venture called Apollo Global.  At the time of the post, it was not at all clear what the strategy of Apollo Global would follow, although some analysts had suggested that it might be similar to that of Laureate.  So it clearly is time for an update on Apollo Global, and in the process, on the educational ventures of the Carlyle Group

On Feb 28, 2008, Apollo announced that Apollo Global had made its first move by agreeing to purchase a university in Chile:

Universidad de Artes, Ciencias y Comunicacion ("UNIACC"), an accredited, private arts and communications university in Chile, as well as its related entities. This includes the Instituto Superior de Artes y Ciencias de la Comunicacion, S.A. ("IACC"), the first online autonomous professional institute in the country which was founded in 1981.UNIACC, founded in 1989 and based in Santiago, Chile, has over 3,000 students and three campuses.....
UNIACC is one of the leading arts and communications universities in Latin America and is renowned for its high-profile faculty and state-of-the-art technology. Accredited by the Chilean Council of Higher Education, UNIACC offers 18 bachelor's and two master's programs. In 2004, UNIACC became the first university in Chile to teach a fully online undergraduate program, and today offers six fully online and one blended program, mainly serving the needs of working adults.

Earlier, in September 2005, The Carlyle Group bought a majority participation in a private university in Mexico, Universidad Latinoamericana, S.C. (ULA).  The Carlyle website indicates that in November 2006, it purchased the remainder of ULA. Finally, in August, 2008, Carlyle moved some of its ULA holdings "from one pocket to the other", when it sold 65% of ULA to Apollo Global (which it owns in part), retaining a 35% holding directly.  This then gave Apollo Global a majority stake in a Mexican university, ULA:

Founded in 1975, ULA is renowned for its dentistry, medicine and communications programs accredited by the Ministry of Public Education (Secretaría de Educación Publica, SEP) in Mexico. ULA carries authorization from the National Autonomous University of Mexico (Universidad Nacional Autónoma de México, UNAM) for its high school and undergraduate psychology and law programs. With four campuses throughout Mexico, including two in Mexico City, one in Tlalnepantla de Baz, and a fourth in the city of Cuernavaca, ULA offers 27 degree programs and has more than 4,000 students.

Thus over the past year,  Apollo Global has established a presence in both Chile and Mexico, and has done so following Laureate’s approach of purchasing existing institutions.  Of course, Laureate already has a very large presence in both Chile and Mexico - and around the world.  It will be interesting to see what Apollo Global does in the future to differentiate its strategy from that of Laureate - and to provide more substantive competition to Laureate globally.  Will Apollo Global make some use of the enormously successful model developed by its sibling the University of Phoenix as it moves forward?

Meanwhile, The Carlyle Group has made a new investment in global higher education. On November 27, 2008, it  announced a $50M (US) investment in Hao Yue Education Group, a prominent Chinese provider of private higher-education.:

Hao Yue was founded in 1997 by Mr. Zhou Jiting and his team. Since then, its flagship school has grown to more than 30,000 students with two campuses in Beijing and more than 200 hectares of campus area. It is now one of China’s largest private universities based on student enrollment, campus area and registered capital. There are more than 1,500 full time teachers among the nearly 30 secondary colleges and schools under the school, offering more than 130 majors....
The business model of Hao Yue’s university puts career training and development at the core of its service proposition, offering a career-oriented curriculum that equips its students with strong practical skills and puts them in touch with a wide employer network. It emphasizes internships for students to gain proper pre-employment training. During the last few years, Hao Yue’s university graduates have enjoyed a high employment rate of approximately 80%.

The announcement acknowledges the “global market turmoil”, but describes China’s education sector as “resilient”. It is nice to know that a group with money is still bullish on higher education!

Disruptive innovation and the market state lead to a collision between for-profit and non-profit medical education

There are those in non-profit higher education  who think that for-profit higher education moves in a different sphere, and can safely be ignored.  A news article today showed that that assumption is increasingly less correct, and showed a form of competition that certainly looks like it arises from a mixture of Clayton Christensen’s disruptive innovation and Philip Bobbitt’s market state.

But let’s begin earlier in the week with another, seemingly unrelated news article.  At the end of July, DeVry Inc. announced the purchase of U.S. Education Corporation, which owns Apollo College (not related to the parent of U. of Phoenix), and Western Career College.  Both of these entities are in the health care area, preparing students

“ for careers in healthcare through certificate and associate degree programs in such rapidly growing fields as nursing, ultrasound and radiography technology, surgical technology, veterinary technology, pharmacy technology, dental hygiene, and medical and dental assisting.”

There are over 8700 students at the two institutions. 

According to DeVry, this purchase fills a strategic need:

“The high quality programs and experienced management teams at USEC, Apollo College and Western Career College provide us the perfect opportunity to further expand our program offerings in the high demand healthcare industry"

That is, DeVry sees a good future in the healthcare industry, and is ramping up its offerings and strengths in that area.

Among the healthcare industry holdings of DeVry is Ross University, a medical school and veterinary medical school on the Caribbean isle of Dominica.  The medical school has about 6,500 graduates, and boasts of the opportunities offered its students:

“We are also proud to offer more clinical rotation spots in the United States than any medical school in the world, with over 5,000 opportunities available at more than 70 institutions nationwide.”

Which finally brings us to today’s news.  The New York Times reports that New York City’s Health and Hospitals Corporation, which runs the city’s 11 hospitals, has signed a 10 year $100M agreement to provide clinical rotations for students of a for-profit medical school in the Carribean.  The for-profit school in the news this time is St. George’s University School of Medicine on Grenada (remember our invasion of Grenada to protect medical students? The same.).  And the contract has a very interesting clause, according to the New York Times:

“The contract also bans the hospitals from providing clerkships to other Caribbean medical schools — a critical provision to St. George’s, which has faced heightened competition in recent years, particularly from Ross University on the island of Dominica, part of DeVry Inc., a publicly traded educational company, since 2003.”

Thus the growth in strength in the healthcare area of DeVry has increased pressure on one of its for-profit competitors, St. George’s, and the resulting competition has spilled into the world of the non-profit competitors

Laureate Education moves into the United States - a new direction?

 This week, the for-profit  leader in global higher education Laureate Education announced that it “has acquired NewSchool of Architecture and Design, based in San Diego, California, and has finalized its acquisition of Kendall College, based in Chicago, Illinois.”   Up to now, Laureate’s focus has been entirely on offshore institutions, and it has a physical presence in 18 countries - but not the US.  Do these new US acquisitions mark a shift in Laureate strategy?

I think the answer to this question is - no. I believe these acquisitions simply reflect another step in the roll-out of the existing strategy.  In a previous post, Interesting activity at the for-profit/non-profit interface: Laureate, I noted that Laureate had begun to seek US. accreditation for several of its off-shore institutions.  In the press release announcing the accreditation of Laureate’s Glion Institute of Higher Education and Les Roches Hotel Management School (both Swiss)  by The New England Association of Schools and Colleges Commission on Institutions of Higher Education, Laureate CEO Doug Becker noted that such “accreditation represents one of the highest standards for the assessment of universities”.  Thus Laureate is using internationally recognized US accreditation to support its strategy of branding itself as a high quality, medium cost higher education provider.  I think they strengthened this part of their strategy by adding  to their portfolio two existing, accredited institutions in the US.  Of course, the two institutions also need to fit into the existing network of universities in a way consistent with what we have seen of Laureate strategy, and we can hypothesize how these new purchases might be viewed in this context.

Interesting activity at the for-profit/non-profit interface: Laureate

In my most recent post, I looked at some interesting relationships between Kaplan and several traditional non-profit institutions of higher education.  In this post, I want to look at some of the relationships that Laureate is developing as it continues to evolve its globalization strategy.

Laureate Education, like Kaplan, has a branch accredited by the North Central Association - Walden University.  Walden (which incorporated the old National Technological University) is an exclusively on-line provider and so can be accessed around the world.  Walden is just one component of Laureate’s online stable which also includes Laureate online education, BV, OnlineLearning.net, and Canter.  However, the main thrust of Laureate’s strategy is bricks and mortar in the global arena.  It  has created its global network of institutions of higher education primarily by buying existing accredited private colleges and universities.  This network currently has nearly 250,000 students world-wide.  Laureate has begun to seek US accreditation for several of its offshore schools, and, for example, its Glion Institute of Higher Education and Les Roches Swiss Hotel Association of Hotel Management have both been accredited by the New England Association of Schools and Colleges.

Recently, Laureate has begun to expand into regions that either do not permit for-profit higher education, or that require local ownership.  This has led the company to create other types of arrangements than they have used in the past. One example is the November 2006 arrangement with Istanbul Bilgi University, a prominent non-profit Turkish university.  Turkey does not allow for-profit higher education, so a typical purchase agreement was not possible. In this case, Laureate, in partnership with parties in Turkey,  has provided 50% of the funding for a company that will provide technology, financial management, student and human resource services to Bilgi.  As part of this arrangement, Bilgi joins the Laureate University Network, which opens up opportunities for Bilgi students for study abroad and exchange programs at campuses of other members of the Network.  Additional goals of this partnership are reported to be expansion of Bilgi in Turkey, and creation of new campuses in other countries of the Middle East and Russia.  Thus, Laureate and Bilgi have found a cooperative arrangement that plays to the strengths or special advantages of each.  As a consequence, Laureate will gain a platform for entry into the Middle East, and  Bilgi will benefit from Laureate’s expertise in management and gain access to capital markets that will enable it to expand aggressively. One has to imagine that Laureate's experience in entering new markets will play a major role in Bilgi's expansion plans.  Could well be a win-win situation.

Interesting activity at the for-profit/non-profit interface: Kaplan

Conventional wisdom might suggest that for-profit and non-profit higher education institutions have nothing in common, and should stay clear of each other.  However,  there are some quite interesting areas where the two are beginning to work together, leveraging on each other’s strengths.  In fact, the arrangements look suspiciously like outsourcing of modules in the education chain.  Although there are many for-profits collaborating with the non-profits, I will focus on two of the largest for-profit higher education corporations, Kaplan and Laureate.   This post will look at Kaplan, and a subsequent post will consider a very different set of partnerships beginning to be developed by Laureate. 

For-profit Kaplan has its own North-Central-accredited undergraduate and graduate programs in both campus and online modes.  However, in addition, it runs numerous programs in partnership with traditional non-profit institutions of higher education.   One group of these programs is designed for international students whose preparation would not normally gain them admission into the partner institutions, or who feel that they need a transition period of cultural acclimation before entering the partner institutions.  Partnerships of this type are primarily with United Kingdom institutions: Nottingham Trent International College, Sheffield International College, Liverpool International College and Glasgow International College.  Each of these programs is housed on the campus of the partner institution. In each case, Kaplan provides international students with a one-year (two-year in some cases) course that focuses on building key academic skills and appropriate background work, as well as intensive English language instruction as needed.   Upon graduation from this partnership program, the student is guaranteed entry into the regular undergraduate or graduate programs of the partner institution.  For those going into regular undergraduate programs, entry is at either the first- or second-year level, depending on the specifics of the program.

Inventing the global university: the competition among the for-profits increases

Up until now, Laureate Education has been pretty much the only institution working to build a truly global university.  Most recently, Laureate was taken private by a group of heavy hitters (including the endowment funds of Stanford and Harvard) so that it could take an even more aggressive approach to creating the first really global higher education entity (see Doug Becker moves to China, July 26, 2007).   However, Apollo Group, which previously has had a relatively  unsuccessful venture into globalization, has now taken on a substantial partner itself with the goal of stepping up the competition with Laureate. 

Apollo has partnered  with the Carlyle Group to form a $1B joint venture called Apollo Global to invest in education services outside the US.  Details are scarce at the moment, but it appears likely that the focus of this new enterprise will be on China, India, and Latin America.  Brooke B. Coburn, Managing Director and Co-head of Carlyle Venture Partners III, L.P., said in a Carlyle press release, “Global demand for higher education is strong.  Apollo Group’s operational expertise coupled with Carlyle’s global network make this a powerful partnership.” Some financial analysts are suggesting that the approach taken by this new partnership will be similar to that taken by Laureate - buying existing schools in the target regions.   It will be very interesting to learn more about the strategy of this new player - and to watch the response of Laureate.

Doug Becker moves to China

I have long believed that real innovation in higher education will not come in the US, but from some area such as China or India where there are enormous higher education needs, and greatly constrained resources compared to those needs.  It is there that the very expensive US model of higher education will run prove most ineffective.  Apparently Doug Becker, Chairman and CEO of Laureate Education, is of the same opinion. He has just announced that he and his family are moving from Baltimore ( the home of Laureate) to Hong Kong so that he can establish a new Asia headquarters there.  Doug and his team have been incredibly innovative in the way they have built Laureate thus far, and I am sure they intend to bring that innovative spirit to Asia with them.   

In his announcement of his move to Laureate employees, Doug also noted that the investors behind the recent private equity buyout of Laureate included Paul Allen, George Soros, and the endowment of Harvard University (see also Can the stock market understand for-profit higher education? Feb.23, 2007).  Harvard must be hedging its bets on the future of higher education!

Can the stock market understand for-profit higher education?

The recent New York Times article concerning difficulties at the University of Phoenix and the earlier January 28, 2007 announcement that Laureate Education, Inc. was going to be taken private (for $3.8B)seem to share an important question for for-profit higher education: Is it possible to build a long-term viable, for-profit institution of higher education that is subject to the quarterly profit-growth demands of the stock market?

Simply making a good profit is insufficient for the market, which connects its rewards to steady, and significant, profit growth.  One can easily hypothesize that some of the problems of the University of Phoenix described in the NYT article arose because of efforts to sustain profit growth beyond some limits possible or acceptable in higher education. After all, higher education operates under some significant legal and ethical constraints, and producing consistent quality in such a human-intensive endeavor is not so readily scalable as some other enterprises.   

Laureate Education, on the other hand, is essentially inventing a new approach to globalization of higher education. One can imagine that there will times when creating academic sustainability of this new global educational enterprise will require more reinvestment and less profit than the growth-focused market can understand. In fact, Becker has stated," We have not taken dividends out of any of our universities around the world. They are free to build their excess revenues and to re-invest those funds in facilities or programs that benefit our students and grow our business."(p. 42)  It is certain that academic sustainability is not the same as financial sustainability, although the two are clearly tightly linked in the case of for-profit higher education. Could this be one of the drivers behind the Laureate decision to move out of the of the market with its very short time horizon?

Does the future of higher education belong to the for-profit sector?

My friend Joe Duffey very kindly called to my attention a very interesting article that I had somehow missed in Change Magazine.   It is  A Tectonic Shift in Global Higher Education, by John Daniel, Asha Kanwar, and Stamenka Uvalic-Trumbic.  Sir John Daniel is a person of wide experience in higher education, having headed Laurentian University and the Open University, and served as assistant director-general for education at NATO.  When he co-authors an article predicting a “Tectonic Shift” in higher education, it deserves some attention.

The authors point out that the number of higher education students worldwide is growing much more rapidly than was predicted, and will probably reach 120 million by 2010.  Not surprisingly, this growth is centered in developing countries.  For example, China passed the US in number of students enrolled in higher ed in 2005, and Malaysia plans to increase enrollments almost three-fold in the next four years.  This anticipated growth will require resources beyond those that developing countries can afford, and they will have to look for new approaches to the provision of higher education.  The authors point out that “developing countries will soon account for the majority of enrollments in higher education worldwide”, and that therefore the approaches adopted by these countries “will effectively define the global profile of higher education in the 21st century.” Daniel et al argue that the most likely provider - and therefore the group that most impacts the evolving global profile of higher education - will turn out to be for-profit higher education. 

For Profit and/or Non Profit future?

How do views on the future of higher education held by for-profit and non-profit universities differ? What aspirations do they hold in common, and where do their differences lie? Where do for-profits have an advantage over the non-profits?

I was very fortunate to have the opportunity to discuss some of these and other issues with Douglas Becker, Chairman and CEO of Laureate Education, Inc. as part of our joint presentation of the 2004 Earl V. Pullias lecture at USC.  The title of our presentation was Higher Education and the Global Marketplace: Entrepreneurial Activity in a Dynamic Environment.

 

How do views on the future of higher education held by for-profit and non-profit universities differ? What aspirations do they hold in common, and where do their differences lie? Where do for-profits have an advantage over the non-profits?

I was very fortunate to have the opportunity to discuss some of these and other issues with Douglas Becker, Chairman and CEO of Laureate Education, Inc. as part of our joint presentation of the 2004 Earl V. Pullias lecture at USC.  The title of our presentation was Higher Education and the Global Marketplace: Entrepreneurial Activity in a Dynamic Environment.