Examining Entrepreneurial Potential

Pavlin Bonev,Henrik Egbert,Thomas Neumann

doi:10.5539/ijbm.v11n10p16

Abstract

<p>Employing public resources for promoting entrepreneurships demands careful selection of candidates who are most promising to set up a successful entrepreneurial career. This study addresses the relation between an individuals’ entrepreneurial potential, identified through personality traits, and aspects of human and social capital, based on prior entrepreneurial exposure. A psychometric test, called F-DUP<sup>N</sup>, measures the strengths of personality traits considered relevant for successful entrepreneurial activity. To test our hypotheses, we collected data of 166 individuals. All of them are university students or graduates and have indicated a specific interest in entrepreneurial activity. A major result is that participants experienced in self-employment, with self-employed parents and with self-employed friends show a higher entrepreneurial potential than participants who do not have these experiences or relations. Furthermore, we find in line with other studies that differences in entrepreneurial potential become less pronounced with increasing age. An interpretation is that personality traits significant for entrepreneurial activity are not stable over time and can also be acquired at a later stage in life.</p>

Highlights

For decades the importance of entrepreneurs as a driving force of economic growth and development has been emphasized (Knight 1921; Schumpeter 1934; Kilby 1971; Kirzner 1973)
The paper focuses on investigating the relation between personality traits and aspects of human capital, observational learning and social capital
We hypothesized that persons with higher educational background, with experience as self‐employed, with self‐employed parents, and with self‐employed friends have higher scores in the F‐DUPN test

Summary

Introduction

For decades the importance of entrepreneurs as a driving force of economic growth and development has been emphasized (Knight 1921; Schumpeter 1934; Kilby 1971; Kirzner 1973). In continental Europe the role of the state for promoting economic growth, and social development (Gerschenkron 1962), has a long tradition. Such support results in initializing a societies’ “take‐off” (Rostow 1960) or “spurt”, as Gerschenkron (1962) has put it. If public investment is made in favor of promoting entrepreneurship, the same in‐ vestment cannot be made for other societal needs, such as public education or health Given such opportunity cost, and for normative reasons related to distributional fairness and justice, it is necessary for a society to implement mechanisms that allow for effective public investments to promote entrepreneurship

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Conclusion