The genetics of entrepreneurship: the effects of nurture and nature

Culture and Entrepreneurship: different concepts yet inseparable and interdependent
20th October 2017

The genetics of entrepreneurship: the effects of nurture and nature

When one thinks of entrepreneurs it is unlikely that the word opportunity will not come to mind. It seems that some people are able to recognise business opportunities better than others. At the same time it can be argued that recognising an opportunity alone is of little practicality unless there is the will to act upon it, thus a certain element of risk-taking is also involved. The thing is that your typical entrepreneur will not have the word "risk" in their vocabulary (at least not until they grow enough to need a CFO). In my own experience with aspiring entrepreneurs, it is often the case when I try to point out to them any points of caution in their business idea that they mention "negative energy" and "pessimism". Academic scholars of entrepreneurship will tend to study opportunity alongside risk, but for entrepreneurs there are only opportunities.

Nicolaou, Shane, Cherkas, Hunkin and Spector (2008) find that there are genetic and environmental differences between men and women with regards to their occupational choice. These genetic differences can affect their choices from the perspective of choosing into self-employment, hence becoming an entrepreneur who starts his or her own business. Nicolaou, Shane, Cherkas, Hunkin, et al. (2008) used quantitative genetics techniques to compare the entrepreneurial activity of 870 pairs of monozygotic (MZ) and 857 pairs of same-sex dizygotic (DZ) twins from the United Kingdom. They found that the preference to engage in entrepreneurship is associated with genetic heritabilities across different operationalisations of the phenomenon, with little effect of family environment and personal upbringing. The small effects of the "family environment" are not to be confused of course with the effects of a supportive and beneficial "institutional environment" that fosters entrepreneurship, the close personal environment of friends and family.
"There are relatively high heritabilities for entrepreneurship across different operationalisations of the phenomenon, with little effect of family environment and upbringing."

Nicos Nicolaou, Scott Shane, Lynn Cherkas, Janice Hunkin and Tim Spector

What this means is that when it comes to personal entrepreneurial attributes they find support that nature is more influential than nurture; the tendency to choose to become entrepreneur is fostered more by the individual genetic coding rather than by their family environment and upbringing. In a follow-up research article they identified that 53 percent of the phenotypic correlation between opportunity recognition and the tendency to be an entrepreneur had a common genetic aetiology (Nicolaou, Shane, Cherkas and Spector, 2009). Thus, it can be argued that even though entrepreneurs can be a diversified group of people in the type of business they operate or how they look and what they eat (for all I know), they share parts of the same genetic coding that triggers their opportunity recognition and influences them to start their own business.
"53% of the phenotypic correlation between opportunity recognition and the tendency to be an entrepreneur had a common genetic aetiology."

Nicos Nicolaou, Scott Shane, Lynn Cherkas and Tim Spector

In another research article, Zhang et.al. (2009) attempted to distinguish the genetic and environmental differences between men and women. They find that there are sharp differences between men and women in the factors which affect the decision to become entrepreneurs. Using 1285 pairs of identical twins (449 male and 836 female pairs) and 849 pairs of same-sex fraternal twins (283 male and 566 female pairs), they find that women tend to have strong genetic influence and statistically insignificant shared-environmental influences on their tendency to become entrepreneurs, contrary to men, who show statistical insignificant genetic influence, but a large shared-environmental influence. Extraversion and neuroticism are able to mediate the genetic influences on women's tendency to become entrepreneurs, whereas extraversion appears to mediate shared-environmental influences on men's tendency to become entrepreneurs.
" "The magnitude of this heritability estimate is even higher than those typically found with personality variables."

Zhen Zhang, Michael Zyphur, Jayanth Narayanan, Richard Arvey, et.al.

It appears that extroversion and neuroticism indirectly affects both men's and women's choice to become an entrepreneur, but women are affected by extraversion through their genetic coding in engaging into entrepreneurship, while men are more affected by extraversion through environmental factors.

Trying to put all these pieces together, and being conscious of posible confirmation bias, it would seem that in general females are genetically designed to become entrepreneurs, while men are taught to become one. However there seem to be fewer women entrepreneurs than men, suggesting that it is likely something in their upbringing that directs them away from the "entrepreneurial path". It is then plausible to assume that the nurturing of women (in many cases) is more focused in fostering their attributes as good wives, mothers, housekeepers and nurses (or teachers). Women are often taught since young age to be subservient and dependent on men for their needs through bedtime stories of young and beautiful princesses, who are saved by a young knight or a prince on a white horse (i.e. Cinderella, Snow-white, Rapunzel etc.).

It is not difficult for an inquiring mind to wonder what if women, who are genetically better nudged to become entrepreneurs, actually received the social support to achieve their potential? To me it is like getting a sub-Saharan African trained to run the marathon: a rather certainty of winning. Women should seek to become something more than simply being the "pretty housewife" (see A trap and a safety net: the role of the Housewife in female entrepreneurship) or as Marry Wollstonecraft better put it, to be "...only anxious to inspire love, when they ought to cherish a nobler ambition, and by their abilities and virtues exact respect."

References

Nicolaou, N., Shane, S., Cherkas, L., Hunkin, J. and Spector, T.D., 2008. Is the tendency to engage in entrepreneurship genetic?. Management Science, 54(1), pp.167-179.

Nicolaou N, Shane S, Cherkas L, Spector TD. Opportunity recognition and the tendency to be an entrepreneur: A bivariate genetics perspective. Organizational Behavior and Human Decision Processes. 2009 Nov 30;110(2):108-17.

Zhang, Z., Zyphur, M.J., Narayanan, J., Arvey, R.D., Chaturvedi, S., Avolio, B.J., Lichtenstein, P. and Larsson, G., 2009. The genetic basis of entrepreneurship: Effects of gender and personality. Organizational Behavior and Human Decision Processes, 110(2), pp.93-107.

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