Can entrepreneurship be inherited?

Many people wonder whether entrepreneurs are born or made. Recent studies suggest that some individuals are indeed genetically predisposed to entrepreneurship. Prof. Nikolaus Franke, an MBA Academic Director at the WU Executive Academy, takes a closer look at these research results and explains what impact this has on entrepreneurship programmes.

Children of entrepreneurs become entrepreneurs

When I ask a class of 100 entrepreneurship students how many of them have at least one parent who is or was self-employed, usually more than half of them raise their hands. In Austria, the self-employed make up only 9% of the working population. But many international statistics bear out this observation. However, this alone does not mean that an inclination towards entrepreneurship and the capacity to be an entrepreneur are in the genes and get passed on from one generation to the next. It goes without saying that children whose parents are self-employed get great exposure to self-employment as a career option early on in their lives. What is more, parents are important role models; they teach their children fundamental values, and by making resources available to them, they can influence their career choices. All of these factors also play a role in the decision to become an entrepreneur.

A better method of investigation: twin and adoptive studies

Therefore, other approaches are needed when it comes to investigating whether entrepreneurship is in the genes. The advantage of twin and adoptive studies is that one can analytically eliminate, or at least significantly reduce, environmental factors. Researchers have investigated, for instance, whether identical twins (who have the same genetic make-up) are more similar to each other in terms of entrepreneurship than non-identical ones. Studies have also been carried out to see whether identical twins who grow up apart behave differently. And last but not least, biological children have been compared to adopted ones. A key assumption in all of these cases is that the chosen approach makes it possible to distinguish between environmental factors and genetic factors. Usually, the degree of genetic predisposition is expressed by what is known as “heritability”. If a trait has a heritability of 0, it is purely environmental, whereas 1 means that it is purely due to genetic factors.

Unequivocal findings

Extensive research from the US, the UK, and Sweden shows that the ability to even identify business opportunities has a heritability of 0.45. The decision to actually become an entrepreneur has a heritability of between 0.4 and 0.6. So it is safe to say that genes do indeed play a crucial role when it comes to entrepreneurship.

Does this mean that entrepreneurship is in the genes?

While researchers have just begun to investigate the underlying mechanisms of the identified connections, it is clear that there is no such thing as “the” entrepreneurship gene, nor is biological determinism, which plays a role in some (hereditary) diseases, involved here. Most theories on the hereditary nature of entrepreneurship have it that an individual’s genetic make-up shapes a number of capabilities (e.g. intelligence) and personal characteristics (e.g. the willingness to take risk), which in turn has an influence on how likely someone is to take the entrepreneurial plunge. In other words: In part—and only in part!—people's entrepreneurial potential is determined by their genes. But whether or not they tap into it depends very much on the environments they are in.

The significant role of entrepreneurship training

In view of what has just been said, the purpose of (further) training in entrepreneurship must be to bring out people's entrepreneurial potential and foster it in a targeted manner. As with musicians and athletes, individuals who are inclined towards and capable of entrepreneurship have to be supported in their development and need to be provided with basic knowledge, methods, tools, and access to networks. Someone who has no musical or athletic talent whatsoever will never be able to achieve above-average performance, even with the best training in the world. That said, there is not a single top athlete or music star who has not tremendously benefited from training and coaching. And when it comes to entrepreneurship, the situation is no different.

If you want to know more about entrepreneurship training and about the Professional MBA Entrepreneurship & Innovation, click here!