Around a fifth of people carry a gene that makes them more adventurous and open to risk. Making the most of their potential is vital to the growth of entrepreneurship – and the wider economy, says James Sproule
Innovation, entrepreneurship and agility are words and concepts we can all embrace. But translating good thoughts into action has always been challenging. It is working out how these valuable attributes might be encouraged – well beyond the founding of new companies – that will determine our long-term economic success as a society.
Not everyone is cut out to be an entrepreneur, just as in the past most people were not explorers. Today while there are no new lands to discover, there are myriad innovations to develop and ideas to explore.
Our sustained success economically depends on our ability to encourage those who are willing to challenge preconceptions, to take ideas and apply them in new ways, to ignore or at least adapt convention – to be entrepreneurial and to be explorers.
The need to explore
Our contention is that to thrive, we need modern-day ‘explorers’ – people who are willing to challenge the status quo and investigate innovative ways of doing even quite traditional things. An immediate question is: are explorers made, or nurtured? It is almost certainly a bit of both. The right circumstances – the nurture – have long been acknowledged. It is the nature bit that deserves attention.
The concept of an entrepreneur gene was spurred through a breakfast some months ago with Chris Impey, author of Beyond: Our future in space. He said we should think about entrepreneurialism not as something that some people decide to do, but often as a manifestation of the explorer gene. So if we develop the desire for exploration, we may get more, and better, entrepreneurs. Just as importantly in other settings – in a large company, university or hospital – those explorer traits might manifest themselves in beneficial ways, such as the creation of a new business unit, department or treatment centre.
We’re living in a golden age where entrepreneurs have captured the public imagination. Businesses may be mistrusted by swathes of the populace, but identifiable entrepreneurs are still largely admired. The likes of Steve Jobs, Sir Richard Branson, Mark Zuckerberg and Jeff Bezos started with a big vision but achieved far more than founding a business – they transformed the way we shop, eat, communicate, work and travel.
What’s striking about these people is that in many ways they don’t fit with some stereotypes about entrepreneurialism. They are all undoubtedly driven, but they are not motivated primarily by money or deal-making. What unites them is that they can rightly be thought of as explorers. As the navigator and explorer Captain James Cook put it, he intended to go not only “farther than any man has been before me, but as far as I think it is possible for a man to go”.
In their chosen fields of business endeavour, they have all tried to go as far as it is imaginable.
Migration: explorers and pioneers
The degree to which explorers have shaped human history is almost impossible to under-estimate. The populating of America – the date and routes of the first human occupants of the American continents – is a highly debated topic. There are no fewer than four major routes that scholars have offered over the past century. Did man sail down the Pacific Coast? Did they come from Asia to Alaska and down or through Europe and down? Or did these initial explorers not come from the north at all, instead crossing the Pacific oceans in the manner suggested by Thor Heyerdahl?
The theory with the most proponents these days is that humans first arrived crossing the now-sunken Bering Land Bridge and moved down into North and South America along the coastlines about 16,000 years ago. Why all of this is relevant and interesting is in seeing how tribes migrate. In the case of the Americas, it seems likely that it was the explorers in the tribe who pushed the rest to seek out new pastures and opportunities. Explorers were the ones who led the tribes over the next hill, to set sail down the coast, over the course of several millennia to populate the Americas.
Their behaviour also tended to be self-reinforcing, as explorers often married and had large families that further perpetuated explorer characteristics. Analysis of Quebec parish records by Laurent Excoffier found that the pioneer families promoted their most restless genes and traits by creating a subculture that placed premiums on curiosity, innovation, toughness and a willingness to take risks.
The new intellectual revolution
Explorers should be welcome in any economy, at any time. But at a time of significant change and opportunity, they become vital. Broadly, it is our view that economic history can be separated into three distinct phases.
Agrarian: The world as it always was until the Industrial Revolution. The vast majority of people were farmers, often producing little or no surplus. There was little scope for entrepreneurship, nor was there much advancement in the human condition. Elites were small and often aristocratic.
Capitalism: The Industrial Revolution saw an enormous increase in entrepreneurship, creating many fortunes. The key to many of these changes was the need for high capital investment operated by relatively interchangeable semi-skilled workers. A much broader elite joined the landowners, along with a growing middle class.
Today we believe we are seeing a change to our economy and society as profound as the Industrial Revolution. A range of factors has driven this change from the globalisation of finance to the more recent rise of technology. Each trend has helped us to question authority and critically challenge and synthesise information. The result has been a new ‘intellectual revolution’.
Intellectualism: This intellectual revolution values problem-solving and analytics. The transformation is still at the stage where it requires constant innovation – indeed that trait may be one of this new era’s defining long-term attributes.
Is there an explorer gene?
The idea of a distinct explorer gene has been gaining currency in the aftermath of the sequencing of the human genome in 2003. In 2013, National Geographic highlighted the gene known as 7R as being a critical marker for an explorer. But it is not as simple as a single gene; Yale University’s Kenneth Kidd believes it is better to think of groups of genes which might contribute to multiple traits – some of which do encourage the types of behaviour that promote exploration.
So how many people are potential explorers? The anthropologist Helen Fisher identified explorer as one of her four basic biological styles of thinking and behaving – along with builder, director, and negotiator. She believes: “Explorers are a product of high dopamine activity (associated with curiosity and spontaneity). Explorers are curious, creative, adventurous, sexual, impulsive and self-reliant. They are also known for high energy, novelty, risk and pleasure-seeking ways, and not being easily swayed by opinion.” She identified 26 per cent of people surveyed as explorers, suggesting that this might align with the 20 per cent or so of the populace who are thought to have
the 7R explorer gene.
The 20 to 25 per cent is a critical ‘tipping point’ in a populace. It means people displaying explorer tendencies are not so unusual as to be ostracised, nor so common as to make organisation of the tribe impossible. In many ways, it is what makes a predilection to explore possible.
Do explorers = entrepreneurs?
The similarities between explorer traits and entrepreneur qualities are striking. The serial entrepreneur and investor Bryan Johnson sees many similarities in the experience of being an explorer and being an entrepreneur: the constraints of money, time and expertise go with the territory, but they also force creativity and precision. In Fortune magazine he stated: “You’re forced to learn to live (and thrive) in continuous chaos, somehow planning for the future even while struggling just to make it through the day”.
What we have learnt about the possible genetic components of explorer traits aligns strongly with an analysis of the heritability of various entrepreneurial characteristics, according to a study undertaken at London’s King’s College. This found that 37 to 48 per cent of the tendency to be an entrepreneur was genetic. Moreover, there is at least an element of a propensity to identify new business opportunities in your genes. Finally, it found that the degree of comfort which someone may have with self-employment – and being dependant on income from self-employment – was heritable. This suggests that genetics affects not only the tendency to engage in entrepreneurship, but also the ability to perform it.
But not all explorers will become entrepreneurs, or have some innate or latent desire to start their own company. However, the value that explorers can bring to existing businesses and organisations is immense. Most of the economy, even in 20 or 30 years, is going to be similar to that which we see today. It is vital to bring fresh approaches to such organisations, to challenge long-standing perceptions and habits, and incorporate new technologies and ideas into established patterns of thoughts and behaviour.
The Global Entrepreneurship Monitor is an initiative run by a group of universities from around the world and since 1999 it has tracked a wide range of entrepreneurial activities and attitudes towards entrepreneurialism. If we look at how the world from the point of view of entrepreneurialism has changed over the past two decades it is clear that the levels have increased substantially. There are broadly three stages to this development:
Factor driven – developing nations: Entrepreneurs account for over 21 per cent of employment. Much of this entrepreneurialism is necessity-driven. In these economies there is no option, other than unemployment, but to be an entrepreneur. Often such entrepreneurs are engaged in wholesale and retail.
Efficiency driven – middle-income countries: As economies become more successful and societies richer, it is only natural that there emerges a range of opportunities in existing companies which offer a meaningful career and good pay prospects. As a result, rates of entrepreneurialism naturally fall away to an average of 15 per cent. Much of this activity is still within the wholesale and retail areas – both have low barriers to entry and require fewer technical requirements.
Innovation driven – highly developed nations: While economies that are innovation-driven have among the lowest rate of entrepreneurialism – at eight per cent – such countries do produce the largest concentration of technology-focused start-ups. This is a natural consequence of the sophistication of well-developed economies, but it is also crucial to note the disparity within this grouping, from the relatively entrepreneurial US to the non-innovative parts of Europe, Russia and Japan.
While the number of people in the UK engaged in entrepreneurial activity has risen from 5.3 per cent in 2002 to 6.9 per cent in 2014, the world is getting much more enterprising. The UK is only just keeping up while much of the rest of Europe is falling woefully behind. In our new intellectual revolution the capacity to retain entrepreneurs and explorers – and make the most of their potential – will be one of the defining differences between economies soaring ahead, or being left behind.The urge to explore is a basic human trait – where it is encouraged and fostered, we all benefit.
Fostering explorers: the dos and don’ts
Given the IoD view that there are going to be ever greater benefits from an explorer economy and society, what should be done? While it is impossible to conjure up entrepreneurs and explorers, these latent traits can be encouraged. Much of what is needed is beyond relatively easy policy initiatives, although we are developing several that we would consider very positive.
More difficult and certainly longer term in their nature is the development of cultural norms that embrace and nurture the explorer impulse at an early stage. Here are a few dos and don’ts:
Celebrate explorers. The benefits are much greater than just entrepreneurs who start a business. Explorers will seek ways to innovate in large corporations, in government, universities and the third sector. Make exploration ‘cool’!
Have a clear rule of law. Where laws are not strong, family and tribe perform the vital task of trust, but familial ties are a poor substitute to impartial law as many developing countries will attest. Clear laws, vigorously and impartially applied, are a key building block of economic success.
Encourage a sympathetic ecosystem of services. From low-cost office space, to flexible capital provision and financing, to sympathetic service providers… all are necessary. There is considerable value in having services sympathetic to entrepreneurs – for example, law firms willing to consider lower initial or fixed fees, in exchange for greater success fees. The need for agility stretches well beyond the start-ups and new ventures themselves.
Core infrastructure. This should be thought of as being desirable, but by no means sufficient, to foster explorers. For the UK, the most critical need is for a faster, more reliable and high-capacity broadband network. This is both because of the ubiquity of modern communications and necessity of information exchange.
Make failure easy and blame-free. In the US, bankruptcy laws make it easy to fail and try again, while in much of the EU, creditors are afforded more protection to the detriment of those whose business flops. Reform in this area will be slow and faces a wide range of entrenched interests, but it is vital nonetheless. The intellectual revolution is a brave new world; explorers need more than a single shot at success.
Include all those who want to succeed. This cannot be seen as an elite exercise, certainly not if success is the ultimate aim. But the goal does have to be success, rather than myriad outcomes deemed socially desirable by non-explorers. Appreciate that many immigrants in fairly open and competitive economies such as the UK are explorers frustrated with the opportunities and environment in their home country. They have come to build their lives and careers here.
Mollycoddle workers. All too often extensive domestic European legislation has protected incumbent workers at the expense of younger employees. But this sort of labour market also means that older workers are reluctant to move between firms, as they rightly fear that if they lose their job, finding another one would be difficult – if not impossible. Where workers are reluctant to move, entrepreneurs have difficulty recruiting. Change will involve more than just new legislation; it will need a new culture, meaning change will be gradual.
Tax away investment capital. Significant amounts of venture capital have always come from high-net-worth individuals and IoD surveys point to savings being the most common form of funding for SMEs. High rates of marginal tax are particularly damaging to allowing capital accumulation and thus to entrepreneurialism.
Have rigid or certain visions of the future. Industrial policy has a long history of failing to pick winners. Rigid visions of the future, particularly those which are combined with moral certainties, need to be guarded against. Be uncertain and remain sceptical. This is all the more valuable in an era of rapid business change.
Stoke envy. In this age of populism, too often individuals’ feelings are seen as being equally legitimate. Egalitarian ideals are indulged, even promoted. For the iconoclastic explorer this is stony ground and all too often they seek more verdant pastures in other countries.
The explorer gene
Watch James Sproule talk about the phenomenon
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5 Excoffier, Laurent; “The selective advantage of being on the edge of a migration wave”; University of Bern; Nov 2011
6 Dobbs, David; National Geographic; Jan 2013
7 Johnson, Bryan; “What do entrepreneurs and world explorers have in common?”; Fortune magazine; May 2015.
8 Nicolaou, Nicos; Shane, Scott; Cherkas, Lynn; Spector, Tim D; “Opportunity recognition and the tendency to be an entrepreneur: A bivariate genetics perspective”;
Organizational Behavior and Human Decision Processes; Sept 2009.
9 Total Early-Stage Entrepreneurial Activity (TEA) rate: Percentage of 18-64 population who are either a nascent entrepreneur or owner-manager of a new business.
10 De Soto, Hernando; The Mystery of Capital; Black Swan Books; 2001
11 The Angel Resource Institute at Willamette University, Oregon, reported 7,261 venture capital deals totalling $41.3bn (£31bn) in 2015 Q3.
12 Myddelton, D R; They Meant Well, Government Project Disasters: An analysis of six major schemes, including Concorde and the Millennium Dome; IEA, Sept 2007.