Last week, I pointed readers in the direction of an article from Matt Clancy which considered the contagious nature of entrepreneurship. Today, I can’t resist directing you towards his excellent follow up article, which should be essential reading for anyone who wants to help make the UK more entrepreneurial.
Clancy argues two things. First, that entrepreneurship transmits from peer-to-peer more readily when peers are similar, and second, that the positive impact of being around entrepreneurs falls off quickly once that idea has been planted.
“You have to see it to be it”, or a variation of the quote, has been attributed to many people, including Billie Jean King when making the case for getting girls to participate in sports. But is it true? When it comes to entrepreneurship, the answer is yes.
We cited some of the same evidence in our 2018 Mentoring Matters report as part of our Female Founders Forum project with Barclays, but Clancy’s summary confirms it. He notes that “adopted sons are more likely to become entrepreneurs if either parent is an entrepreneur, but the effect of fathers on sons is generally more than twice as strong as the effect of mothers. For daughters, the effect is even stronger. It turns out adopted daughters are more likely to become entrepreneurs only if their mother is an entrepreneur – adopted daughters raised by entrepreneurial fathers are no more likely to become entrepreneurs than those raised by non-entrepreneurial fathers.”
It’s not just gender. Clancy’s article cites evidence that an entrepreneur’s employees are more likely to be inspired to follow in their footsteps if they share characteristics like being of a similar age, having similar educational backgrounds, or being born in the same place.
But this doesn't have an effect when another significant intervention has already taken place. In other words, if a mother has already inspired their daughter to become an entrepreneur, it doesn’t matter if they then go on to be an employee of a female founder. They’ve already got the entrepreneurial bug.
This suggests that when we aim to inspire people to start businesses – whether that’s through government schemes, the education system, charities, or private sector initiatives – focusing on those who have never had any previous exposure to entrepreneurship should yield the best results (although this would be worth running as a randomised to control trial, to add to the weight of evidence).
And it seems that the person making the intervention matters too. Once again, the impact of competing shared and unshared characteristics would make for a great experiment, but until then we should be guided by the folk wisdom and evidence that people are inspired by people similar to them.
A lot of these interventions rely on entrepreneurs giving up their time – for example, by going into schools, colleges or universities. But not everyone has the same time on their hands, especially if they’re busy breaking barriers. So if it turns out, for example, that meeting an entrepreneur from the same ethnic background is very significant for young people being inspired (again, we could do with more evidence around this), then it may well be worth compensating entrepreneurs for their time – especially in cases where we may want more founders from a demographic that is under-represented. By virtue of there still being so few of them, they will be harder to find.
One final thought. We also need to think about the quality of the businesses that come out of these interventions. We don’t want people being inspired to start businesses that are destined to fail. While failure isn’t always and everywhere a bad thing for individuals and society, interventions that inspire but don’t adequately equip entrepreneurs to succeed could be doing more harm than good.
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