My thoughts below were inspired by the article, Are Entrepreneurs Born or Made?
Part of the difficulty we have answering this question is the mystique that surrounds the word “entrepreneur”.
“An entrepreneur is an individual who organizes and operates a business or businesses, taking on financial risk to do so. It’s first known usage, by economist Richard Cantillon, was in 1723. Today, an entrepreneur is defined as someone having the qualities of leadership and, additionally, is an innovator of ideas regarding manufacturing, delivery, or service needs (or any combination of these).” Wikipedia
In other words, an entrepreneur is a business person. So, let’s ask this question, “Are business people born or made?”
Somehow this seems less controversial. Sure, some people may naturally prefer the structure of working for someone else while others may prefer the freedom of working for themselves. But, when we substitute “entrepreneur” with “business person” the mystique diminishes.
I began to wonder how many small businesses there are in the United States and visited the Small Business Administration site and discovered that …
- The 23 million small businesses in America account for 54% of all U.S. sales.
- Small businesses provide 55% of all jobs and 66% of all net new jobs since the 1970s.
- The 600,000 plus franchised small businesses in the U.S. account for 40% of all retail sales and provide jobs for some 8 million people.
- The small business sector in America occupies 30-50% of all commercial space, an estimated 20-34 billion square feet.
“Furthermore,” the SBA website added, “the small business sector is growing rapidly. While corporate America has been “downsizing”, the rate of small business “start-ups” has grown, and the rate for small business failures has declined.”
- The number of small businesses in the United States has increased 49% since 1982.
- Since 1990, as big business eliminated 4 million jobs, small businesses added 8 million new jobs.
Whether entrepreneurs are born or made, their importance in economic development seems pretty clear. To those of us who work with leadership development and entrepreneurship, the question, “are business people (aka entrepreneurs) born or made?”, is similar to the question, “Are leaders born or made?” My own take is that “history” (i.e. the social conditions that exist) gives rise to leaders. So an important part of our task is to develop people of character because we never know who “history” will tap on the shoulder. And, as the SBA website suggests, when it comes to starting or running a small business, many people will get “tapped”.
Recent research seems to indicate that there are genetic traits that may give some an advantage in leadership and entrepreneurship. That’s not really news. We all know “the type” that sells, gets things done, perseveres, and takes risk. But we also know that environment and opportunity and human choice are also important elements in who can start or run a business.
Next time you drive down the road count the number of small local businesses you see. You’ll count hundreds, if not thousands, of stores and shops of all kinds. If you’re in a city you may even see street vendors — signs of the informal market economy– around you. Ask yourself, were the people who started these business born or made to start them?
There is a spectrum between pure nature, nurture, and pure human choice. Not every businessperson is an extreme risk taker – a genetic freak of nature. They are usually your ordinary human who finds a need and fills it in such a way that makes them and their customers happier than the alternatives.
What do you think?