Abstract
Entrepreneurship as a research topic has been approached from different disciplines. After justifying the importance of its study, we define it as a process of discovery, assessment, and exploitation of opportunities. As part of this process, it also becomes important to study the person behind these actions. In fact, the personality approach is one of the most classic approaches in the study of entrepreneurship, albeit at same time one of the most controversial. This chapter summarizes relevant literature on personality traits and entrepreneurship, and differences are also established between broad traits (e.g., Big Five) and more specific traits (e.g., Opportunity Recognition or Locus of Control). Due to space constraints, this chapter does not do justice to all the existing developments that have analyzed the relationship between personality traits and entrepreneurship; however, it also includes a section dedicated to cognitive ability as a line of work that can complement the trait-based approach. The authors finalize this chapter with conclusions from the selected literature.
TopIntroduction
Entrepreneurship has always been present in the course of human history, due to its inherent nature to create. In recent decades, this concept has become highly important, given the need to overcome constant and growing economic problems in different societies. Today, we can say that entrepreneurship is so essential and ingrained that it has itself become a culture: a way of thinking and acting oriented towards the creation of wealth through exploiting opportunities, the development of a global vision, balanced leadership, and taking calculated risks, whose result is the creation of value that benefits entrepreneurs, its enterprise, the economy and overall society.
Even so, many academics still ask, implicitly or explicitly, why we should study entrepreneurship. There are multiple ways to answer this question, and we synthesize them from three different perspectives: economic, social and academic. The Global Entrepreneurship Monitor (GEM) describes entrepreneurship as an increasing “world-wide phenomenon”. In the 90’s, an important business creation activity was developed, mainly in transitional economies, where the activity of the private sector was relatively new. Around the world, 9 out of 100 people of working age are involved in business activities, with approximately 300 million in the phase of creating a business venture. Due to this, the generation from the 21st century’s has also been labeled as Generation E, the most entrepreneurial since the Industrial Revolution (Kuratko, 2003).
Entrepreneurship is also an important source of employment for women, and there has been significant worldwide growth in women's self-employment (Langan-Fox, 2005). A dominant trend in the 21st century is likely to be ethnic entrepreneurship, due to the free market, less restraining in the flow of people, and infrastructure development (Morris, Schindehutte, & Lesser, 2002).
Entrepreneurship can also greatly contribute in reducing poverty. Increasing the number and quality of entrepreneurs and business is probably one of the most useful ways to reduce poverty, since it creates employment, as well increases innovation and economic empowerment of people in low development countries with high unemployment rates. (Pick & Sirkin, 2010). These countries political systems are increasingly recognizing this, and have introduced several top-down programs to facilitate the creation of new businesses. These essentially refer to changes in laws and regulations in order to make easier the design and operation of business. Bottom-up programs have also been launched in an attempt to support entrepreneurs with either financial resources (micro-credits) or increase knowledge about business. Specifically, approaches that involve the supply of financial resources have received wide attention. Within the microcredit community, influential people, such as Nobel Prize winner Muhammad Yunus (Yunus, 1999), have argued that the provision of microcredit is enough to lift people out of poverty, but does not go beyond the training required to improve entrepreneurial skills. Although both, government programs and microloans for the low or no-income individuals are necessary, these institutional and economic strategies have often failed because they do not pay enough attention to the psychological dimensions of entrepreneurship (Chliova, Brinckmann, & Rosenbusch, 2015).
In summary, entrepreneurial activity represents one of the most important engines of economic growth, being the power behind the creation of any new company, growth of existing ones, and to a large extent, creation of employment. Entrepreneurship has come to be perceived as an engine of economic and social development throughout the World, or as Lazear (2002) states, “the entrepreneur is the single most important player in a modern economy” (p.1).
Key Terms in this Chapter
Personality: Pattern of attitudes, thoughts, feelings, and behavioral repertoire that characterizes a person, and that has a certain persistence and stability throughout his life, so that the manifestations of this pattern in different situations have some degree of predictability.
Neuroticism: Is one of the Big Five higher-order personality traits in the study of psychology. Individuals who score high on neuroticism are more likely than average to be moody and to experience such feelings as anxiety, worry, fear, anger, frustration, envy, jealousy, guilt, depressed mood, and loneliness.
Extraversion (Outgoing/Energetic vs. Solitary/Reserved): Energetic, surgency, assertiveness, sociability, and the tendency to seek stimulation in the company of others, and talkativeness. High extraversion is often perceived as attention-seeking and domineering. Low extraversion causes a reserved, reflective personality, which can be perceived as aloof or self-absorbed. Extroverted people may appear more dominant in social settings, as opposed to introverted people in this setting.
Agreeableness (Friendly/Compassionate vs. Challenging/Detached): Tendency to be compassionate and cooperative rather than suspicious and antagonistic towards others. It is also a measure of one's trusting and helpful nature, and whether a person is generally well-tempered or not.
Locus of Control: The degree to which people believe that they have control over the outcome of events in their lives, as opposed to external forces beyond their control.
Conscientiousness (Efficient/Organized vs. Easy-Going/Careless): Tendency to be organized and dependable, show self-discipline, act dutifully, aim for achievement, and prefer planned rather than spontaneous behavior.
Self-Efficacy: Is an individual's belief in their innate ability to achieve goals. Albert Bandura defines it as a personal judgement of “how well one can execute courses of action required to deal with prospective situations”