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Is Entrepreneurship Contagious?

Mark Marich

You can file this under "the impact of networks"--or perhaps more simply, "it takes one to know one." A new paper from the Kauffman Foundation shows that there is a link between knowing an entrepreneur and being one yourself. And while "Getting the Bug: Is (Growth) Entrepreneurship Contagious?" doesn't necessarily suggest causality, it doesn't take a leap of faith to think that connecting the uninitiated to more entrepreneurs would increase the likelihood that they would become entrepreneurs themselves.

The paper presents the findings of a survey of 2,000 Americans across the country, asking whether they knew entrepreneurs – both in general and specifically "growth" entrepreneurs whose ventures add more employment and wealth to the economy – and if they themselves were entrepreneurs.

"Our goal was to discover whether entrepreneurship is an imitative behavior," said author Paul Kedrosky, Kauffman Foundation senior fellow. "If so, increasing people's exposure to entrepreneurs – particularly growth entrepreneurs in areas like software, the Internet or biotechnology – could generate more new entrepreneurs and by association, more economic growth."

Overall, 36.7 percent of respondents reported knowing an entrepreneur, but only 15.4 percent knew a growth entrepreneur. These differences were more dramatic when evaluated by gender: 24.8 percent of men claimed to know a growth entrepreneur, compared with 12.1 percent of women.

Similar disparities appeared by income level: lower income respondents (annual salary of $24,999 or less) were most likely to know so-called "subsistence entrepreneurs" (48.1 percent), but least likely to know a growth entrepreneur (13.8 percent), while 26.7 percent of higher-income respondents knew growth entrepreneurs.

The survey also examined whether respondents knowing entrepreneurs made them more likely to be entrepreneurs themselves. The results indicate a significant association between knowing an entrepreneur and being one: 37.8 percent of respondents who knew a growth entrepreneur were entrepreneurs themselves, as were 35.5 percent of respondents who knew entrepreneurs overall. Men were more likely to be entrepreneurs if they knew an entrepreneur than were women, in both the growth and overall entrepreneur categories.

This preliminary research has clear implications for entrepreneurship programs, Kedrosky said.

"Funding and programs to encourage entrepreneurship and wealth creation can have an impact simply by bringing together entrepreneurs and non-entrepreneurs, particularly among those groups who have the least exposure currently, and helping it go 'viral.'"

Other survey findings include:

  • People in the U.S. Northeast were more likely to know entrepreneurs overall than in other areas of the country, with 43.1 percent reporting knowing an entrepreneur. However, respondents in the U.S. West were most likely to report knowing a growth entrepreneur specifically (18.2 percent) than people in other geographic regions.
  • Younger respondents (ages 25-34) had an edge over other age groups in knowing growth entrepreneurs (20.2 percent), while respondents ages 45-54 were most likely to know an entrepreneur in general (48.6 percent)

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