Editor’s note: For a long time, academia ignored the important roles played in an economy by such factors as creative destruction and entrepreneurship. Even today, in most economics programs, an economy is described primarily according to the National Income Accounting Equations, in which government actions such as fiscal and monetary policy are the prime determinants.
But entrepreneurship is making its way onto more and more campuses, perhaps more as a “how to” approach than as a field of academic study. With its increased presence comes more focus on the age-old question: can entrepreneurship be taught or is it hard-wired into us?
Today’s Pope Center commentary presents arguments by two distinguished writers on the topic. This one, by former university president and economist James V. Koch, suggests that entrepreneurship is primarily a matter of our inherent gifts. The other (available here), by Buck Goldstein, Internet entrepreneur and “Entrepreneur in Residence” at UNC-Chapel Hill, suggests that entrepreneurship is more a “habit of mind” that can be developed.
Nature Dominates Nurture in Creating Successful Entrepreneurs
Suppose two unknown men are standing in front of us. One has the physique of LeBron James—six foot, eight inches tall, with 260 pounds of rippling muscle—while the other looks like a young Woody Allen—five foot, five inches tall, with narrow shoulders and Coke bottle-thick eyeglasses. We then ask a random selection of other people to tell us which of these two individuals is more likely to be a star professional basketball player. We can be relatively confident that nearly every respondent will tell us that the LeBron James look-alike is more likely to be the star basketball player.
Why? Quite simply, because the two individuals have differing genetic endowments. The blunt truth is that we can teach and practice the Woody Allen-like individual almost to death, but he will never earn a spot in the National Basketball Association unless he buys a team.
Reality is that some tasks in society favor individuals who possess very specific genetic endowments. The genetic endowments of people who become construction workers or United States Marines generally differ from those who become accountants for the Social Security Administration or nuns in a cloister. An individual’s genetic makeup molds and shapes what is possible.
The appropriate discussion, then, is not whether an individual’s genetic makeup has an impact on whether he or she will become a successful entrepreneur or leader, but the degree to which genetics plays a part.
I do not claim that all entrepreneurial and leadership behavior is genetically determined. I do argue, based upon rigorous scientific evidence and less rigorous, but telling situational and occupational studies, that an individual’s genetic inheritance is more important than specific education and training in determining whether or not that individual displays entrepreneurial and leadership behavior. In fact, some people are born with entrepreneurial and leadership characteristics that cannot easily be duplicated or taught.
The English scientist Francis Galton was the first to differentiate between “nature” (genetics) and “nurture” (environment). We know today that nature and nurture interact and that certain environmental stimuli can turn genes on and off. But it does not follow from that observation that nurture completely overrides nature. Rather, psychologist John Watson’s famous behavioral boast in 1925 that “Give me a dozen healthy infants and my own specific world to bring them up in, and I’ll guarantee to take any one at random and train him to become any type of specialist I might select—doctor, lawyer, artist, merchant, chef and yes, even beggar and thief…” is demonstrably false.
We now have dozens of studies of identical twins separated at birth and many behavioral genetics studies, some that directly deal with personality formation, that destroy Watson’s assertion. In any case, Watson subsequently recanted partially by agreeing that genetics did play some factor in occupational selection. (See Fisher and Koch, Born, Not Made (2008), for a summary of the scientific evidence.)
This does not mean that an individual’s genetic endowment rigidly determines his or her life, but it does place constraints upon what he or she realistically can do. Here we should think in terms of probability distributions—some outcomes become more likely than others by virtue of genetics.
Now, to the crucial issue. Can we teach people to become entrepreneurs or leaders? The answer is, only to a limited extent. The willingness to bear risk is a critical aspect of entrepreneurial behavior; it is very difficult to teach some individuals to enjoy takings risks. They just do not like to do so. It is, however, possible to teach an intelligent, curious individual person how to assess and deal with risky situations as well as how to insure and hedge against risks. Hence, given an individual’s risk preferences, it clearly is possible to teach that individual how to deal with risky situations more intelligently.
The same general provisos apply to leadership. Much of what we label leadership is genetic; in Fisher and Koch, we estimate that about 60 percent of leadership behavior is genetically derived. Can we teach people to become more effective leaders? Yes, individuals who have mastered the essentials of their craft, particularly in accounting, finance, economics, management, and psychology are more likely to exercise successful leadership than those who have not.
Some individuals, however, understand the essence of most or all of these necessary skills things instinctively. They do not need to earn an MBA degree to be successful. It is well to remember that neither Bill Gates nor Mark Zuckerberg actually graduated from Harvard University. And they primarily took mathematics and computer science courses, rather than business-oriented curricula. Even so, they possessed that peculiar collection of human capital that was critical in propelling them to commercial success.
Finally, let me note that a variety of specific occupational studies exist that have demonstrated that individual success in a wide variety of occupations (ranging from college presidents to drill sergeants) reflects both genetic and environmental influences. Genetics, however, typically plays a larger role than environmental factors. Greater proportions of our behavior are hard-wired within us than many wish to admit.