Entrepreneurs can often expect a lower income than their corporate counterparts. Since therefore entrepreneurship is not an obvious economic choice, there must be other, non-pecuniary motivators at play for those who choose to follow this route.
An important contributor to entrepreneurial intent is personality, with individualism a strong precursor. Another determinant is the entrepreneurial activity of your parents or guardians – there is much literature to suggest that children who grow up in entrepreneurial homes stand a good chance of becoming entrepreneurs themselves. These two factors can be thought of as the ‘nature’ and ‘nurture’ factors respectively.
A less studied motivator however is identity. Your social identity plays an important part in your propensity to become an entrepreneur. Since most individuals express entrepreneurial inclination by the age of 15, the impact of school-age peers in particular on one’s entrepreneurial spirit warrants focused investigation.
Most children who aspire to become entrepreneurs do not market experience (and if they do it will generally be on a small, homespun scale), so their aspirations will usually have less to do with their perceptions of their own abilities to make it work as with their social identity, which is highly influenced, particularly at adolescent age, by peers.
A 2010 study by Oliver Falck, Stephan Heblich and Elke Luedemann, who utilised PISA 2006 data, found that even after controlling the effects’ of entrepreneurial parents, children with entrepreneurially-minded friends are more likely to aspire to become entrepreneurs themselves than those lacking such friends.
Identity – or one’s sense of self – has been deeply studied by sociologists and psychologists, but far less so by economists. Yet economic activity is very much linked to individuals’ identities. We do work or aspire to do work that aligns with our ideals, with our ideal image of self.
In today’s society the entrepreneur is much-admired. Entrepreneurs tend to be associated with insight, ingenuity, mettle, and independence. In societies that value individualism – particularly those in the West – these are highly applauded characteristics, and understandably ones to which children and teens especially might aspire. The entrepreneurial intention is therefore not only in line with one’s desired identity, but also with the childhood experiences that are key to our deciding whether or not we have the requisite traits.
Tertiary education in entrepreneurial skills abounds, yet the teaching of theoretical and practical skills to adults can only go so far in developing entrepreneurs. We all know, whether from academic reading or simply our own reflections, that our childhood background and experiences greatly impact our attitudes in adulthood.
The world of peers plays a vital role in the development of our identities and which sort of identity we will adhere to. The child who spends most of their spare time online will interact with and pick up identity cues from a very different crowd of peers to, for instance, the sporty child whose extracurricular activities are field-based and much praised.
Children’s academic and social interactions all work to help them formulate their unique identity. For example, a child who is used to competition, often takes part in adventurous or risky activities, and is used to being a ‘leader’ among friends, may well have adopted an identity in keeping with that of entrepreneurship.
In some ways the image of entrepreneurs is similar to today’s popularised perceptions of the Wild West: men and women who brave unknown frontiers versus staying back on the East Coast following the path marked out for you by someone else. They possess what J.A. Schumpeter has referred to as “the will to conquer”, the drive to found, and desire to create.
The significance therefore of childhood identity development is apparent. For parents, teachers, governments, NGOs and others interested in developing entrepreneurism, it is best to become involved as early as possible in helping children to foster a sense of self in keeping with the traits necessary to develop entrepreneurial intent.