Why are innovative entrepreneurs generally aggressive?
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What makes a successful entrepreneur? It comes as no surprise that such traits as a high IQ, lots of education, abundant self-esteem and wealthy parents all contribute. But in a recent study, we also find that smart teenagers who engage in illicit activities are more likely to become successful entrepreneurs than equally intelligent, rule-abiding teenagers. It is the combination of ‘smart’ and ‘illicit’ tendencies that helps account for both the entry into entrepreneurship and the comparative earnings of entrepreneurs.
Although economists since Adam Smith have emphasized that profit motivated entrepreneurs spur innovation and growth, a large body of previous research has yielded two puzzling findings. Analyzing data on the self-employed to draw inferences about entrepreneurship, researchers have found first, that the average self-employed business owner earns less than a comparable salaried worker; and second, that self-employed and salaried individuals have similar characteristics.
How can it be that these ‘growth-creating innovators’ have cognitive and non-cognitive traits comparable to their salaried counterparts and earn less? Perhaps the self-employed are not a good proxy for entrepreneurs. After all, the self-employed category includes street vendors and the creators of software firms, gardeners and the founders of biotechnology businesses. While some of the self-employed are innovative leaders who mobilize capital to transform industries, others engage in qualitatively different activities.