Are entrepreneurs born or raised? Because startups represent one of the most promising avenues for career success for young Canadians entering the job market, it is an important question.
Several factors influence whether someone will become an entrepreneur, such as having varied life-experiences, diverse social relationships, and deep knowledge in a domain. But evidence is growing that family matters, too.
Role models: It all starts at home
While exposure to entrepreneurial role models helps raise future businessmen and businesswomen, there is no guarantee that parents’ “entrepreneurial traits” will naturally appear in their children.
There is no “entrepreneur gene,” and most traits associated with business owners dissipate within two generations. However, opening the eyes of the next generation to the amazing opportunities and perilous highs and lows that come with owning a business, fuels entrepreneurship.
Being raised in an entrepreneurial household is the single biggest predictor of a young person’s inclination toward new venture creation. Put differently, it all starts at home.
Unfortunately, running a business can be demanding, pulling entrepreneurs away from the home and discouraging their kids from following in their absentee-parent’s footsteps. Entrepreneurs shouldn’t shield kids from their business, but let them learn from it (and in it).
A demanding, but responsive parenting style
The way in which parents communicate and reward their children during their childhood and adolescence is a major determinant in shaping their entrepreneurial spirit.
Demanding hard work while also responding to children’s questions and need for self-determination helps boost entrepreneurship instincts.
Kids are encouraged to question and think for themselves, while being held to a high standard. Parents might, for example, make their children participate in a sport or activity and stick it out for at least a year, but let the child select the sport and decide whether to switch at the end of the year.
Responsive parenting that encourages asking questions and gives children input into the decisions that affect them fosters strong self-esteem and creativity, but if it is not joined by demanding performance expectations, competence and work ethic will be underdeveloped.
These are the children who get praise (and even trophies) for trying, whether or not they worked hard, stuck with it, or accomplished anything. Research shows that demanding yet responsive parenting is best overall to encourage the development of skills and characteristics conducive to future entrepreneurship.
Family flexibility and cohesion
Inflexible family structures – with unchanging roles and task assignments – discourage the pursuit of novel ideas and encourage conformity to strict family and social conventions.
Just as business founders need to handle a variety of changing responsibilities, children’s roles and task assignments should expand and evolve as they mature.
At the other extreme, overly flexible families lack stability and introduce too much change – no one knows who is responsible for dinner or clean-up, for example. Children don’t learn the discipline and commitment required by successful entrepreneurship.
While most people strive for a high feeling of closeness within their family, moderate family cohesion, from which adult children can strike out on their own, also offers a better foundation for entrepreneurs.
Too much cohesion can suffocate entrepreneurship because adult children won’t take risks that might separate them – physically or psychologically – from their family. Too little cohesion means that adult children won’t have sufficient family support when striking out, since family remains the most important source of start-up resources and nonfinancial support.
Balance in terms of flexibility and cohesion gets the best of both worlds because it reinforces the next generation’s entrepreneurial ambitions, providing financial and emotional support without family resentment or backlash.
Entrepreneurs are made, not born
Entrepreneurs can be inspiring role models who fuel entrepreneurial abilities and motivation in their children.
Parents who are not entrepreneurs can still foster openness and motivation for entrepreneurship by being demanding, but responsive, and by creating a moderately flexible and cohesive family structure.
With increased awareness of how parents and families shape children’s ability development and motivation about entrepreneurship, our hope is that Generation Z and those who follow will be increasingly willing and able to find and pursue entrepreneurial opportunities.
Peter Jaskiewicz is the University Research Chair in Enduring Entrepreneurship at the University of Ottawa's Telfer School of Management and the associate editor of Family Business Review. James Combs is the Della Phillips Martha Schenck Chair of American Private Enterprise and professor of management in the College of Business Administration at the University of Central Florida.