Genetic Theory of Entrepreneurship
The Genetic Theory: Is There an "Entrepreneur Gene"?
Do entrepreneurs get made in the classroom, or are they born that way? The Genetic Approach to Entrepreneurship looks to biological inheritance to explain the tendency for an individual to become a founder.
Research on genetic links is spurred by considerable anecdotal evidence that the children of entrepreneurs are significantly more likely to become entrepreneurs than the children of non-entrepreneurs. But is this due to their DNA, or simply growing up in a business household?
The Evidence: Twin Studies
To separate biology (Nature) from upbringing (Nurture), researchers turn to Twin Studies.
Nicolaou et al. (2008) conducted a landmark study comparing identical twins (who share 100% of their genes) with fraternal twins (who share 50%). They concluded that when one identical twin becomes an entrepreneur, the other is significantly more likely to do so, even when controlling for family upbringing.
This suggests a heritable component. The researchers initially suggested that **testosterone levels** (linked to risk-taking) might be the inherited factor driving this decision.
The Mechanism: Personality Traits
Later studies added depth to the analysis by looking at what exactly is being inherited. It isn't a "business gene," but rather specific personality traits that make business easier.
Shane et al. (2010) utilized the Big Five Personality Model to explain the link. They found that two specific, heritable traits were strongly associated with entrepreneurial entry:
- Openness to Experience: The desire for novelty and variety.
- Extroversion: The tendency to be outgoing and energetic.
The Verdict: Nature vs. Nurture
Genetic theories remain controversial because they seem to downplay the potential for education to spur individuals toward success.
However, the data offers a balanced view. While the study found a genetic link, the effect sizes were small. This suggests that while nature matters (providing a "head start" via personality), nurture (education, experience, and environment) matters much more.
To date, no studies have demonstrated a genetic effect on success—only on the tendency to start. You might be born with the urge to build, but you must learn the skills to win.
Related Theories
While nature may provide a "head start" via heritable traits, these frameworks explore how those biological tendencies interact with environment and experience:
1. The Biological Mindset
- Ambiguity Tolerance: How heritable "Openness" allows founders to handle market uncertainty.
- Impulsivity Theory: Examining the biological triggers that move founders from thought to action.
2. The Household & Nurture
- Family Entrepreneurship: Beyond DNA—how social learning in the home creates future founders.
- Birth Order Theory: How your position in the family hierarchy influences risk tendencies.
3. Environmental Triggers
- Childhood Adversity: How environmental stress can biologize resilience in entrepreneurs.
- Cultural Dimensions: How national values either suppress or amplify heritable traits.
References
Nicolaou, N., Shane, S., Cherkas, L., Hunkin, J., & Spector, T. D. (2008). Is the tendency to engage in entrepreneurship genetic? Management Science, 54(1), 167-179.
Shane, S., Nicolaou, N., Cherkas, L., & Spector, T. D. (2010). Genetics, the Big Five, and the tendency to be self-employed. Journal of Applied Psychology, 95(6), 1154.
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