IS ONE born an entrepreneur, or is it something that can be learned? That’s one of the longest running arguments among entrepreneurship experts and ordinary thinkers alike.
Recently US entrepreneurship expert Scott Shane, who is a professor of entrepreneurial studies at Case Western Reserve University, got the debate going again by arguing that some people have a genetic predisposition to become entrepreneurs.
In Born Entrepreneurs, Born Leaders, which came out in 2010, he caused a stir with his finding that the tendency towards starting ones own business is about 41% inherited.
Leaning on molecular research as well as studies using identical twins, he revealed how certain genes influence the odds that one will become an entrepreneur by fostering traits such as high activity levels, extraversion, emotional stability, self-esteem, conscientious and openness to experience.
However others have refuted the role of genetics. A 2010 survey by entrepreneur-turned-academic Vivek Wadhwa found that 52% of a group of 549 entrepreneurs he surveyed were the first to start a business in their immediate family.
More recently, a 2011 survey by Babson College in the US found that if business students take at least two core entrepreneurship classes that this can influence them to start a business.
Local experts are also not convinced that ones genes play so great a role.
Mike Herrington, professor at the University of Cape Town’s Graduate School of Business who heads up the Global Entrepreneurship Monitor (Gem) research, believes one can certainly teach entrepreneurship.
Herrington says though one might not be able to teach someone how to take risky decisions, one can, using academic course work and experienced mentors, help them to minimise the risk of starting a business.
He points to his business school’s various programmes and says most students who join the business school’s entrepreneurship programmes start out with the belief that they can’t start their own business, but that by the end of the programme about a quarter end up running their own business.
However figures from Elli Yiannakaris, director of the Raymond Ackerman Academy – which is based at the business school – dispute this.
Just over 10% or 35 of the 330 young graduates that have passed through the academy since its inception in 2005, presently run their own business. Most of these are micro firms with fewer than five employees.
Still, Paul Smith, who conducts business training for the academy, among others, stresses that studies have been less conclusive on evidence around traits that will predict business success, than they have been on the kind of environmental factors that can influence one to succeed as an entrepreneur.
Even Shane himself points out that gene research is still in its infancy and that twin studies are not foolproof, with scientists in Toronto having found that genes of identical twins don’t behave exactly the same way even though their DNA is identical.
The best predictors of entrepreneurial success, believes Smith, include ones education level, management and industry experience and the number of people in ones team – with start-ups with teams being more successful than businesses started by a single person.
But Nazeem Martin, managing director of small business financiers Business Partners, says that while someone can be assisted to develop certain traits needed to start and run a business, there’s a limit to the amount of nurturing one can provide them with. In this, motivation and drive play an important role, he says.
Keet van Zyl, co-founder of venture capital company Knife Capital agrees.
“Entrepreneurship can be taught, but like most career paths in life, if you are not passionate about it or don’t have matching characteristics you might not be good enough to be highly successful at it,” says Van Zyl.
If there are certain traits that predispose some to become entrepreneurs over others, it could have serious implications for South Africa when it comes to nurturing and developing more entrepreneurs.
Shane concluded that being aware of ones genetic predispositions will help one to compensate for them – by for example getting coaching or training to improve on those aspects that you are not as good in as others. It can also help you decide what kind of career one wants to have – be it a manager for a corporate or one’s own boss.
Chimene Chetty, director of Wits Business School’s Centre of Entrepreneurship, says identifying certain traits attached to successful entrepreneurs can be useful for schools, as they can then encourage those children who have such traits to develop them further.
Banks can also do more to identify traits linked to success as an entrepreneur when they decide who to lend to, rather than based their decision on the technical expertise someone has when deciding whether to finance them or not.
But Allon Raiz, chief executive of business incubator Raizcorp, says it’s wrong to think of entrepreneurs as being either born or made.
He points to a recent study which revealed that the most successful entrepreneurs – in terms of those that had the lowest failure rate – were those aged 60 or over.
This, he says, disproves both that becoming an entrepreneur is genetic or taught, and that there is rather something else at work when it comes to determining whether someone will become an entrepreneur or not.
Raiz says it might help that someone has certain characteristics, but ultimately certain conditions have to exist before they opt to become an entrepreneur.
Someone over the age of 60 has less risks holding them back – with their bond having likely been paid off and their children having moved out of the family home, he says. Older people also have more experience and training to fall back on.
Raiz lists various conditions. These include the presence of an opportunity or crisis, a tolerance for not giving in, a tolerance for risk, a belief that one can muster the resources necessary to start a business and the ability to learn from feedback and then adapt.
Ultimately determining who will start their own business and who won’t is difficult to predict, but the experts seem to be in agreement that there are key traits that help some entrepreneurs become more successful than others.
This article originally appeared in Wits Business School Journal in January 2013 (Issue 32).
Stephen Timm is a