Vesa Routamaa, [email protected] Piia Edinger, [email protected], Tiina Brandt, [email protected]
University of Vaasa, Finland
Innovative entrepreneurs: who are they?
Abstract
Do entrepreneurs differ from ordinary people? This question is often asked but seldom answered in research. In spite of the fact that anyone can start up a company, certain personal characteristics and behavioral patterns may be beneficial for running an enterprise.
In this study, entrepreneurs’ personality types will be analyzed and compared with ordinary population with Finnish sample. Additionally creativity and innovation orientations of different personality types are compared in order to find out who are the innovators.
It was found that the most typical entrepreneurial personalities are often intuitive, spontaneous, curious, adaptable, and open to what is new and changeable. On the contrary, 70% of the population favors a planned, organized and predictable life style avoiding risks and surprises in their daily life, and they are more seldom entrepreneurs. The results can be utilized, for example, in entrepreneurial education and in mentoring start up candidates.
Introduction
Entrepreneurs as individuals differ from other people, that is, entrepreneurs' personality structure differ from the average, at least statistically. Of course we must not forget that entrepreneurs of different fields or different forms of enterprising might be connected with different characteristics of entrepreneurs. However, already Joseph Schumpeter (1934) saw real entrepreneurs as innovators and their role as the key driver of economic growth. He talked about “creative destruction”
in which new innovations replace the old ones. We are in the search of intangible human capital that should recognized, trained and unleashed to ensure that the smaller countries can withhold and improve their positions in the global economy.
The importance of the personality of potential entrepreneurs is usually ignored in promoting entrepreneurship.
When explaining entrepreneurship there has usually been two different aspects: role of the environment has been one of the key factors to explain entrepreneurship. Secondly, the focus has been on finding the differences between entrepreneurs and non-entrepreneurs. Previous studies have found some differences but they have mostly ignored the personality aspect.
In this study, the role of the environment has not been forgotten but we focus on the association between entrepreneurial creativity and personality in order to find out the innovative entrepreneurs. Schumpeter (1973) also indicated that becoming an entrepreneur requires tendencies that are unique. McClelland (1961) suggested that a high need of achievement, risk-taking ability, preferences for challenge, acceptance of personal responsibility and innovativeness are the characteristics of an entrepreneur. Other traits that are found to describe entrepreneurs are for instance tolerance of ambiguity and internal focus of control (Begley & Boyd, 1986).
The majority of the studies dealing with entrepreneurship and personality have focused on finding one description of entrepreneurs, or characteristics, which are typical of entrepreneurs. However, these studies have mainly ignored the fact that the entrepreneurs of different fields, or the different forms of entrepreneurship, might be connected with different characteristics or traits. In other words, there might be, not only one ”true” personality of entrepreneur, but also many personalities, which might favor different forms of entrepreneurship. Also the entrepreneurs’ orientation to networking (Routamaa & Varamäki, 1998) or internalization (Routamaa, Vesalainen & Pihlajaniemi, 1996) differs from each other depending on personality type. An enterprise can actually take multiple forms requiring more or less of training and various skills, like those of an expert entrepreneur, farmer entrepreneur, entrepreneur in a co-operative movement, scientist entrepreneur, venture capitalist, franchising entrepreneur, partner entrepreneur, businessman, shopkeeper, intrapreneur etc. – there is a good number of alternatives. It is not necessary for an entrepreneur or the founder of an enterprise to have all skills, since one can outsource sub-functions, purchase from a network or from a joint venture, subcontract etc. In a very basic form all you need is a mobile phone and good organizing skills. This should be emphasized in entrepreneurial education amongst young people. It can be concluded that the personality structure of entrepreneurs differs from general population (Routamaa 2008, 2011). But also entrepreneurs differ from each other and different
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personality types favor different entrepreneurial identities. All SMEs are not innovative in the Schumpeter’s ‘creative destruction’ meaning, that is all entrepreneurs are or need not to be especially innovative.
Since Schumpeter (1934), entrepreneurial characters in general have received a lot of attention in previous research (e.g. Smith, 1967; Stanford & Curran, 1976; Carland, Hoy, Boulton & Carland, 1984; Routamaa & Vesalainen, 1987; Gartner, 1989; Timmons, 1989). However, in spite of the dominant importance of entrepreneurship in economy, entrepreneurs as personalities have got relatively little attention. Most often, a trait approach has been used to illustrate entrepreneurial characteristics, like for example the need for achievement, internal locus of control and the propensity to take risks (e.g. McClelland, 1961; Hornaday & Aboud, 1971; Timmons, 1978; Welsh & White, 1981; Borland, 1974;
Brockhaus, 1982; Markman & Baron, 2003; Marcati, Guido & Peluso, 2008; Dvir, Sadeh & Malach-Pines, 2010). More recently, the Five-Factor Model of personality has been applied to compare entrepreneurs and managers (Envick &
Langford, 2000; Zhao & Seibert, 2006)). It may be asked, however, whether the entrepreneurs constitute a homogeneous group such that it can be described using common traits. Are the trait tests able to identify different kinds of enterprising personalities? The still picture of a person in trait approach is a very narrow view in comparison of dynamic type, and the system of judging and perceiving explained in the next section. Empirical research has not found any trait that is consistently associated with entrepreneurship (Järlström, 2002).
The basic question here is whether it is possible to identify the most potential, innovative entrepreneurs in terms of personality preferences or types.