Is Entrepreneurship a Bio-Social Phenomenon?: The Role of Non-Cognitive Skills and Education

Is Entrepreneurship a Bio-Social Phenomenon?: The Role of Non-Cognitive Skills and Education

José Guilherme Leitão Dantas (CARME, School of Technology and Management, Polytechnic of Leiria, Portugal), Fernando Manuel Valente (CINEA, ESTS, Polytechnic Institute of Setúbal, Portugal) and Isabel Simões Dias (Life Quality Research Centre, School of Education and Social Sciences, Instituto Politécnico de Leiria, Portugal)
DOI: 10.4018/978-1-7998-4826-4.ch001
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Abstract

The entrepreneur is regarded as a driver of economic development encouraging researchers to delve into the causes that lead some people to choose the entrepreneurial activity. The response has followed two approaches: biological and sociological. The former privileges non-cognitive skills while the sociological favors factors are associated with learning and contextual conditions. Thus, the question arises: Is behavior determined by non-cognitive skills or can it be 'shaped' throughout an individual's lifetime? Using an exploratory approach supported by a literature review and contacts with the Portuguese (context under analysis) educational system, the authors aim to understand which skills are critical, the way they are acquired and developed, and the role the educational system plays in their development, concluding that entrepreneurial activity implies cognitive and non-cognitive skills which the system must deliver provided the teachers' training in advance.
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Introduction

The academic interest for entrepreneurship is not new. In fact, to find the roots of entrepreneurship we have to go back, at least, to the 18th century, more specifically to Richard Cantillon (e.g. Chell, Haworth, & Brearley, 1991; Hébert & Link, 1989). The practice of the entrepreneurial activity, in turn, has been a fairly normal occurrence throughout the history of humanity (Dantas, Moreira, & Valente, 2015).

Following Schumpeter (1934) who stated that entrepreneurs are the engine of growth, particularly through innovation, Lazear (2005) claims that “the entrepreneur is the single most important player in a modern economy” (p. 649). Actually, entrepreneurship, particularly when it is motivated by opportunity1 (Acs, 2006), has a huge potential in terms of economic growth, job creation, and regional and national competitiveness’s, i.e. it contributes to improve human wellbeing (Audretsch, 2007; European Commission, 2013). It is therefore no wonder that the research on entrepreneurship “has virtually exploded in recent years”, as pointed out by Rauch, Wiklund, Lumpkin and Frese (2009, p. 778).

The factors that may influence the entrepreneurial behavior have been widely researched over the years. The debate has largely centered on the dichotomy between personality characteristics (e.g. Caliendo, Fossen, & Kritikos, 2011; McClelland, 1961; Nicolaou, Shane, Cherkas, Hunkin, & Spector, 2008), on the one hand, and the influence of the experiences and the context that involve the potential entrepreneurs (Autio, Kenney, Mustar, Siegel, & Wright, 2014; Ganotakis, 2012; Gartner, 1988) on the other. There is an old struggle between nature’s dominance and the supremacy of the environment. To put it in extreme terms, one might say that for those in the former category our future has already been mapped out at conception while those in the latter would claim we are born mainly as a blank slate that the environment will gradually fill in. However, the issue is not as straightforward as it seems.

Actually, even if genes are responsible for the transmission of personality traits between generations (White, Thornhill, & Hampson, 2006), they can only be considered as a propensity to act in a particular way (McCrae & Costa, 1990), that is, “our nature, our evolved psychology predisposes an individual to think and act in particular ways. But those endogenous predispositions are affected by a host of exogenous factors” (White et al., 2007, p. 453). Consequently, we can say that it is easy to understand that one's genetic endowment can help to embark on entrepreneurial activities, but that it has to be supplemented with a favorable environment, particularly through education.

Our chapter has an exploratory character (Malhotra, 2001) and our goals are: 1) to understand the critical skills for the entrepreneurial activity; 2) to understand the way those critical skills are acquired and developed; and 3) to reflect on the Portuguese education system and its role in those critical skills development.

Therefore, the chapter will provide a review of the literature on the aforementioned questions and will incorporate the results of many contacts with agents from the Portuguese education system.

The chapter is divided into 6 sections: 1. introduction; 2. entrepreneurship: the entrepreneurs and their contexts; 3. the entrepreneurial spirit: a bio-social phenomenon; 4. the entrepreneurial potential and skills promotion; 5. the entrepreneurship education (life skills programs and Portuguese experiences); and 6. conclusions.

In the introduction the aims and the structure of the chapter are explained. Section 2 highlights the main reasons for the enormous economic and social importance of entrepreneurship, underlines the multidisciplinary character of entrepreneurship, and presents different approaches to the phenomenon of entrepreneurship. The chapter goes on (section 3) arguing that personality matters for the entrepreneurial activity. Using two different approaches – The Five-Factor model (McCrae, 1992) and specific personality characteristics that are related with the entrepreneurial activity (Rauch & Frese, 2007) – we attempt to show that non-cognitive skills or life skills do influence the entrepreneurial process. Section 4 is dedicated to the entrepreneurial potential and the skills promotion with particular focus on the non-cognitive skills. These are essentially inborne (McCrae et al., 2000) and stable over the lifetime but can be changed by intervention (Heckman, 2012). The purpose of section 5 is to reflect on life skills programs and the Portuguese education system and its connections to the entrepreneurial learning process. Finally, section 6 provides some practical implications of the chapter and a summary of our findings.

Key Terms in this Chapter

Non-Cognitive Skills: Endogenous predispositions which are reflected in people’s characteristics, patterns of thoughts, feelings, and behaviors.

Skill Formation: The process by which individuals achieve and develop innate or acquired skills to cope with everyday life challenges. Besides heredity, it includes formal and informal training activities and life experience.

Educational System: It is a complex and multifaceted system which includes teachers, students, contents, schools, educational policies, and other subsystems which contribute to the acquisition of knowledge, skills, values and habits.

Entrepreneurial Activity: It is the human action aimed at generating added value through creativity, innovation and identification of opportunities. It implies the exploitation of new ideas as well as to plan and to manage projects in order to create value and to achieve the desired goals.

Genetic Endowment: Is the set of attributes transmitted by genes (inherited) which creates the predisposition for certain behaviors and affect health status.

Contextual Conditions: They are the political, social, economic, cultural, technological, and demographic dimensions which characterize a country or a region. They provide the framework for any event, situation or decision and influence its outcomes.

Entrepreneurial Behavior: It is a multidimensional construct which refers to individual’s ability to turn ideas into action. It includes permanent search for opportunities and the ability to mobilize the necessary resources for the setting-up and implementation of new projects.

Entrepreneurial Mindset: It refers to a specific state of mind which predisposes human conduct towards entrepreneurial activities and outcomes. It includes attributes such as open-mindedness, creativity, innovation, and availability for taking calculated risk.

Life Skills: Human potentialities that enable individuals to have success at the environment in which they live (whether at home, work, or community).

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