11 Nov 2008   |   News

Entrepreneurialism is all in the brain chemistry say Cambridge scientists

Whether someone will become an entrepreneur may be down to whether they make risky decisions. And for those without this innate ability, teaching or drugs could help enhance entrepreneurial skills.


Whether someone will become an entrepreneur may be down to whether they make risky decisions. And for those without this innate ability, teaching or drugs could help enhance entrepreneurial skills.    

In an article published this week in the journal Nature, the researchers at Cambridge University say that entrepreneurs are riskier decision-makers than their managerial counterparts.  

Psychological and biomedical research has traditionally considered risk-taking as an abnormal behaviour, as exemplified by its association with substance abuse and bipolar disorder.  

However, the research, which was funded by the Wellcome Trust and the UK Medical Research Council, found that entrepreneurs represent an example of highly adaptive risk-taking behaviour that can result in positive outcomes during stressful economic circumstances.  

This so-called functional impulsivity, or ability to make quick decisions under stress, may have evolutionary value as a means of seizing opportunities in a rapidly-changing environment.

Whilst there is a potential for considerable profit in making the decision to go out on their own entrepreneurs accept the accompanying risks, to finances, reputation, family stability and even self-esteem, as many new ventures fail.   The scientists propose that it is these types of decisions which differentiate entrepreneurs from others.  

To test their hypothesis, the scientists asked 16 entrepreneurs from around Cambridge and 17 managers to complete a computerised neurocognitive assessment measuring various aspects of their decision-making abilities.  On a decision-making task such as hiring staff that required ‘cold’ processes, entrepreneurs and managers performed similarly.

The researchers then asked the entrepreneurs and managers to make ‘hot’ or risky decisions, which involved evaluating rewarding versus punishing outcomes.  For example, the decision between financing one of several potentially excellent but risky business opportunities is a hot decision, in other words it is too difficult for emotions not to play a role.  

On this test, although entrepreneurs and managers both made good quality decisions, entrepreneurs were significantly riskier.  Entrepreneurs also showed superior cognitive flexibility and higher ratings on questionnaires which measure impulsivity.  These cognitive processes are intimately linked to brain neurochemistry, particularly to the neurotransmitter dopamine.  

Professor Barbara Sahakian, lead author of the study, said the study shows that not all risk-taking is disadvantageous, particularly when combined with enhanced flexible problem solving.  “In fact, risky or ‘hot’ decision-making is an essential part of the entrepreneurial process and may be possible to teach, particularly in young adults where higher risk taking is likely and age-appropriate.”

“Additionally, from previous studies we know that drugs can be used to manipulate dopamine levels, leading to changes in risky decision-making.  Therefore, our findings also raise the question of whether one could enhance entrepreneurship pharmacologically.”


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