ENTREPRENEURSHIP IS IN THE BLOOD (4/5)

Written on the 25 November 2010

ENTREPRENEURSHIP IS IN THE BLOOD (4/5)

CLOSE to two-thirds of young businesses have a founder who followed in their parents' footsteps, according to the largest study of Australian entrepreneurship.

Undertaken by the Queensland University of Technology (QUT), the $1 million-dollar four-year study, tracked the development of 1400 new and young firms in Australia.

Now in its third year, The Comprehensive Australian Study of Entrepreneurial Emergence (CAUSEE) analysed and tracked a wide range of ‘regular’ and ‘high potential’ businesses from around Australia while combining the academic brainpower of six universities in Australia, the US and Singapore.

QUT's internationally-renowned entrepreneurship expert Professor Per Davidsson, leads the study with associate professor Paul Steffens.

He says that while the parental role model effect was known, he was surprised by the high prevalence of family business background in high potential firms.

"Children of business owners see both the pros and cons of running a business," he says.

"They may be more confident in running a business and determined to be involved in a business that's profitable, rather than working long hours for a subsistent business.

"There is also a high instance of business founders using families for advice, particularly among regular start-ups, but high potential firms tend to use more professional resources."

Davidsson says almost half of regular start-ups and almost 70 per cent of high potential businesses were founded by teams of at least two people and spousal couples featured in the majority of regular start-up teams.

"The results suggest that the survival likelihood of regular start-ups is higher for spousal teams, while among high potential firms, teams were more likely to be comprised of non-related individuals who had a range of professional skills," he says.

Davidsson says the incidence of same-sex spousal teams was eight times higher than in the general Australian population.

Around 4 per cent of spousal teams in the study were same-sex partners, while the Australian Bureau of Statistics found only 0.5 per cent of Australia's family units (including de facto couples with or without children) comprised of same-sex couples.

Davidsson says the vast majority of successful businesses wanted to retain their small size.

"They don't want to grow, but they do want to be technologically advanced and serve large geographic markets," he says

"Their growth aspirations also adjusted downwards over time as did their perception of competitive strengths, indicating it's more difficult out there than they originally thought. The positive spin on the downward adjustments is that it is those who adapt to realities survive.”

The findings were unveiled in two papers at the Brisbane Executive Club and also found:

• The majority of successful businesses didn't dream of becoming large enterprises and further downgraded their aspirations over time.
• Same-sex couples were more likely to start a business together.
• Individuals with parents who had run a business were more likely to start entrepreneurial high potential firms.


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