Entrepreneurship is the lifeline of economic growth, and bold innovative minds are the driving forces behind societal progress and economic prosperity. This is a reality which, although commonly acknowledged, is not always prioritised in the academics or regulatory spheres. Belgium in particular, has a way to go in developing a culture of entrepreneurship. A study from 2016 found that, amongst the 15 EU member states, Belgium ranks last in the category of “entrepreneurial culture”.
In order to foster an entrepreneurial culture, we must understand the mentality of an entrepreneur.
In general terms, successful entrepreneurs are often the most rebellious forces in their field of business. It takes a specific type of individual to successfully pursue an entrepreneurial venture, and adhering to the rules simply won’t cut it. The corporate world encourages positive rule breaking behavior by advocating the use of “out-of the-box” thinking to generate new ideas, new products and new markets.
Academics have studied this phenomenon and found a relation between modest rule breaking behavior during adolescence and entrepreneurial aptitude and ambition. Modest rule breaking consists of delinquency and family and school offenses. This relation is driven by the time consistency of risk tolerance of soon-to-be entrepreneurs. If confirmed, this “life-course persistence” of risk prone behavior could be used to foster and stimulate entrepreneurial potential in society.
In an attempt to verify rule breaking behavior as a predictive indicator of entrepreneurship, I performed a qualitative study on entrepreneurs active in Belgium-based online service start-ups. The sample group of entrepreneurs and non-entrepreneurs were submitted to a lottery game to examine their risk taking behavior and participated in extensive semi-structured interviews to gauge their rule breaking behavior in adolescence.
As is generally the case, the truth is not as clear cut as the hypotheses often suggest. The data suggests that risk behavior is not monolithic. The variation amongst entrepreneurs and non-entrepreneurs is highly dependent on the type of risk. Non-entrepreneurs exhibited higher risk tolerance with regards to recreational, social and health related risks, while entrepreneurs scored higher on financial and career risks. Thus, it seems that entrepreneurs are more willing to take financial risks, yet are wary of compromising their social status and health. Furthermore, in contrast to existing literature, data showed that entrepreneurs did not exhibit more modest rule breaking behavior as an adolescent than non-entrepreneurs.
One explanation for these unexpected results may be that previous studies were skewed by social desirability bias. Secondly, the scale used in our study was based on previous studies performed in the United States, and the cultural differences between the United States and Belgium could make this particular measurement scale of rule breaking behavior inappropriate for the context of Belgian culture. For instance, teenage beer and marijuana consumption are considered as somewhat serious criminal offenses by American norms, whereas the Belgian society holds a more lenient stance.
Lastly, the data suggests the existence of industry conditioning. The online service industry constantly re-invents itself, innovative technological advancements are constant and internet attracts new competitors with new ideas on a daily basis. All these external pressures might imply that for a start-up to be successful, it must be operated by individuals unafraid to push the existing boundaries. Startups active in the online service industry would then not only attract entrepreneurs, but employees with rule breaking behavior as well.
A final interesting finding is the mediating factor of the perception of money. Participants of the lottery game noted that their decisions were influenced by how much they valued money, rather than their tolerance of risk. Meaning that an individual raised in a financially deprived household could develop a more conservative attitude towards financial risk taking, without having any impact on their general risk proneness.
Why does this matter? Policy makers stress the importance of promoting and fostering entrepreneurial aptitude amongst the youth in order to develop the next wave of entrepreneurs. The educational challenge is to connect with teenagers without discouraging their natural tendency towards risk taking.
- Laura Valles