Creating entrepreneurial spirit: avoid excessive risk aversion, disproportionate punishment for failure and foster creativity and initiativ

Lladós, Josep

Revistes Catalanes amb Accés Obert


Educating for
entrepreneurship: talent,
innovation and risk
Many recent pieces of economic analysis show that the revolution 
of digital technologies and global competition have accelerated
technological progress and reduced considerably the life cycle of
many products and technologies. In the main economies of the world,
the strong link between creativity, entrepreneurship and innovation
becomes apparent.
Hence the conviction is spreading that entrepreneurs play a crucial
role as active stakeholders of social and economic change, identifying
and taking existing opportunities on the market, opening and creating
new ones and capitalising these opportunities generating new
business that creates jobs. In this sort of finding new ways of doing
things, they stimulate change improving efficiency or productivity in
an economy. 
JOSEP LLADÓS
We will either find a way 
or make one.
Anníbal Barca
(before crossing the Pyrenees
on his way to Rome, 3rd century BC)
Many people have a biased image of an entrepre-
neur. If we asked them, most would probably talk
of the founder of a successful technology-based
company who has managed to create a big cor-
porate empire. An entrepreneur is still generally
considered to be a visionary individual, risking it
all and overcoming great difficulties on their
quest for wealth. For some, they become almost
heroes – for others, a sort of lonely predator.
However, reality is quite different, and the cre-
ation of a new business is often the result of
much talent, experience and systematic efforts
by restless people devoting much time and en-
thusiasm to turn an idea or an invention into
something marketable.
One should therefore ask for the reasons for
which a society has entrepreneurial spirit and
particularly for the main motivations of creating a
new business. As we are all aware that innovation
and entrepreneurship are not just the result of
some brilliant idea but also the outcome of com-
plex processes of invention, development and
commercialisation of products, we shall think that
talent should become the most determining trig-
ger of a society’s entrepreneurial drive.
The creation of a new business is
often the result of much talent,
experience and systematic efforts by
restless people devoting much time
and enthusiasm to transform an idea.
However, when asking about the reasons for the
creation of businesses, answers are often less ob-
vious than one could presume. A priori, we could
think that entrepreneurs are basically motivated
by economic needs, the wish to make money, so-
cial recognition or independence thanks to hav-
ing an own business. In fact, some authors distin-
guish between entrepreneurs according to their
motivations, as they believe that creativity and in-
novation capacity are different for each case. If
the search of independence outweighs the quest
for wealth, it should not come as a surprise that
economic performance is different. The kind of
motivation is therefore not irrelevant.
Being an entrepreneur means to be
always alert of opportunities, willing
to take risks and open to change. 
If we consider that people decide to set up a
business for very different reasons, it will proba-
bly be necessary to understand these motivations
for a better perception of the determining mecha-
nisms of entrepreneurship. However, different
studies show that the main reason for which peo-
ple start a business has less to do with making
big money, being famous, enjoying a high status,
seeking adventure or improving the world but, for
different reasons, they do not want to go on
working for anybody else.
This wish of personal independence is obviously
associated to what could be considered a higher
social goal related to more well-being as new or
unsatisfied needs are catered for. Many entrepre-
neurs are forced to act because their aspirations
at their present job are not satisfied. This drive
will probably be stronger as potential entrepre-
neurs become aware that their ideas have a much
higher value than their salary at their present
company and that talent retention mechanisms at
that company do not work properly.
Hence an entrepreneur is, generally speaking,
someone convinced to find a new way of doing
things or a new product or service to offer. Being
an entrepreneur therefore means to be alert of
opportunities, willing to take risks and open to
change. All this requires energy, optimism and a
certain degree of vision, boldness and of course
skill. Entrepreneurial behaviour is the result of
both personal characteristics and the influence
Talent management70
of the environment. Both of them necessarily
 interact with each other as, no matter how an
entrepreneurial person is, they will need a con-
text providing them with access to proper re-
sources. Likewise, many studies show that avail-
ability of resources per se is never enough to
drive the creation of new businesses.
Generally speaking, it is said that personal fac-
tors affecting the likeliness to develop a business
are related to family history, psychological pro-
file, educational level and previous professional
experience of the entrepreneur. Numerous evi-
dence confirms that readiness to create a new
business is intimately related to family history –
most entrepreneurs have a relative being a busi-
nessperson or freelancer. The most common
 explanation is that such people act as a role
model and can further provide the new entrepre-
neur with material support.
Studies also show that, both in Europe and the
United States, people in their midlife with high
qualifications and previous working and specific
experience are the most active entrepreneurial
group, being most likely to succeed and creating
companies demanding skilled and well-paid
labour. It becomes clear that some skills required
for an entrepreneur can also be acquired when
working as an employee, especially if people
have experience in managing and supervising
taskforces, expertise in consumer analysis and
knowledge of technological and market features
of the industry in which they want to create their
business.
As to psychological aspects, part of the research
in entrepreneurial psychology indicates that cer-
tain traits inherent to personality may lead to a
more entrepreneurial behaviour, but other stud-
ies consider these traits to be the result of the
 influence of other factors on behaviour. From
this perspective, entrepreneurship is not just an
inherent feature but essentially an ability that
can be acquired and developed. Personality
therefore has a specific role but forcibly interacts
with development, context and opportunity. It
seems difficult to identify a typology of the ideal
entrepreneurial personality, though studies of
technology-based entrepreneurs reveal that this
character is rather associated to a sort of behav-
iour far from speculation and irrational risk-tak-
ing. Taking advantage of talent therefore comes
with readiness to take responsibility to find solu-
tions to problems, set realistic challenges and
take calculated risks as well as demand of a high
degree of personal satisfaction.
Entrepreneurship is not an inherent
feature but essentially an ability that
can be acquired and developed.
But, what relevance do educational level and tal-
ent management have for a society? The relation
between education and entrepreneurship is ap-
parently more complex than at first glance. Public
notoriety of some very successful entrepreneurs
without a university degree have created the im-
age that going to university does not make more
entrepreneurial people. In fact, no PhD is needed
to be a successful entrepreneur, but studies car-
ried out in different settings show that once the
effect of other socioeconomic variables such as
gender, age, race, previous income level and
branch of activity are considered and singled out,
the higher the educational level the higher is also
the readiness to set up one’s own business.
One should also think that if time and cost-in-
tensive higher education did not produce evident
advantages to create a new business, it would
hardly be understandable how the boom of spe-
cific courses offered by numerous universities and
organisations could exist. One could sometimes
even ask if there is not more educational offer
than entrepreneurs in our society!
The need for high-quality education seems to be
very clear. Significantly, research shows that those
starting a business not only care for learning the
information contained in specific entrepreneur-
ship programmes but also tend to attend pro-
grammes related to the kind of activity connected
with the business they create.
In fact, the educational system not only can help
acquire and develop the entrepreneurial capacity
71paradigmes / Issue no. 1 / December 2008
of people but it also can contribute notably to re-
duce obstacles to entrepreneurial initiative from
different perspectives as there are different mat-
ters that can pose a barrier to entrepreneurial
 attitude. Apart from bureaucratic, administrative
and of course financial issues, one aspect impos-
ing biggest restrictions on entrepreneurship is
an unfavourable institutional framework consist-
ing of social attitudes, values, rules and habits.
This poses one of the biggest obstacles to entre-
preneurship in our society to the point that en-
trepreneurs and business did not enjoy enough
social consideration until very recently.
The educational system not only can
help acquire and develop the
entrepreneurial capacity of people but
it also can contribute notably to
reduce obstacles to entrepreneurial
initiative from different perspectives.
Creating a general state of mind more positive
towards entrepreneurship requires redefining at-
titudes of society members and increase their op-
portunities to create a business, which in turn de-
mands continuous efforts and collaboration by
the educational sector, the financial system and
media so they also become involved in introduc-
ing changes in knowledge, attitudes and social
behaviour.
As to education, there are programmes ever
more present and widespread in Catalan univer-
sities trying to encourage entrepreneurial spirit
and business creation through subjects and spe-
cific curricular activities. It is to be expected that
this offer will increase with the implementation
of the European higher education space, aimed
at improving professional capacity-building, and
that job access opportunities for students will
foster the acquisition of such competencies. In
secondary school, different initiatives are imple-
mented to create a framework favourable to en-
trepreneurship by raising curiosity, creativity and
innovative spirit among schoolchildren, such as
visits to companies and simulations of business
creation and management.
Such educational innovations become a crucial
mechanism to encourage a change of attitude to-
wards entrepreneurs, rejecting the most conser-
vative view, accepting business failure and
strengthening this figure as a legitimate, feasible
and positive option. Of course, such actions to
generate talent and disseminate entrepreneurial
culture should be reinforced by media as tools to
transmit mainstream cultural values as well as by
local economic promotion agencies and universi-
ty business incubators, disseminating business
initiatives and organising events for social recog-
nition and entrepreneurship awards, which also
encourages the creation of role models for poten-
tial entrepreneurs. From this perspective, initia-
tives such as the Day of the Entrepreneur are
valuable.
As has been mentioned, motivation is another el-
ement largely studied by psychological approach-
es to entrepreneurship. It is usually connected to
the spirit to take risk and the search of alternative
income. An element that probably encourages
this is the quest for independence, self-realisation
and practical and autonomous implementation
of one’s own ideas, all of which should be stimu-
lated during education. By disseminating role
models, aspirations and expectations can emerge
from this professional alternative to further devel-
op it, which can also contribute to foster creative
mindsets.
The quest for independence, self-
realisation and practical and
autonomous implementation of one’s
own ideas should be stimulated during
education.
The dissemination of values and ways of think-
ing and doing related to entrepreneurship will
most probably help to demonstrate its legitimacy
and appeal as a professional option. However,
some critical aspects in creating an entrepreneur-
ial spirit, such as avoiding excessive dislike of
risk and disproportionate punishment of failure
as well as the ability to foster creativity, talent
and personal initiative, are further points in the
Talent management72
educational system affecting the personality of
schoolchildren that need to be well settled far
before entering university.
It is often believed that the lack of experience and
entrepreneurial skills is the main factor hamper-
ing entrepreneurship. As has been said, it is com-
monplace to find many schools and universities
with curricula including subjects related to busi-
ness, or they offer placements allowing students
to get in touch with business. Besides, many oth-
er institutions contribute to encourage the devel-
opment of such abilities, organising numerous
workshops or training courses.
Such initiatives intend to instil confidence into
people in connection with their professional skills
and their ability to set up a business and con-
tribute positively to developing entrepreneurial
initiatives in our country. Although recent studies
show that previous professional experience, ex-
pertise in creating businesses and having worked
previously in the same industry as the new busi-
ness are the most decisive factors of entrepre-
neurial success in Catalonia, many entrepreneurs
acknowledge that this external influence also be-
comes a key driver of motivation.
It is revealing that one factor limiting the effect of
such actions to improve the institutional frame-
work developed by the educational system is that
the pedagogic and teaching tradition often still
reflects the needs of current employment, thus
focusing on contents and the acquisition of
knowledge rather than skills and practice. This
demonstrates the lack of appropriateness of ap-
proaches to entrepreneurship by benevolent and
protectionist academics.
One of the main drivers of social change is cur-
rently the use of technology. Knowledge incor-
porated into digital technologies and its use in
production, commercialisation, consumption and
leisure is leading to the advent of new economic,
social and educational patterns. Innovations re-
quire today a wider and more diverse knowledge
base, so entrepreneurs are faced with an increas-
ingly complex environment. They therefore need
to know how to take advantage of the different
sorts of knowledge within their reach and take
part in those collective learning processes enlarg-
ing their knowledge base. The challenge of a
conventional educational system whose goal is to
promote an entrepreneurial spirit among its
learners is thus considerable. In this more com-
plex setting, successful entrepreneurs having
based their business on the strategic use of inno-
vative technologies will need to be in fact the
main agents setting up and implementing train-
ing programmes intending to effectively help en-
trepreneurial people.
If the person is the most relevant factor in the
knowledge economy, as skilled labour is the pri-
mary driver and disseminator of new knowledge,
entrepreneurship becomes an essential mecha-
nism to create and pass knowledge in a country.
Recent studies on entrepreneurship in Catalonia
show that, as people wish to take advantage of
their knowledge and become entrepreneurs, a
business opportunity and hence a new innovating
organisation emerges. In such cases of start-ups,
the innovation process will develop out of knowl-
edge brought in by the entrepreneur, and the di-
versity of organisational patterns making possible
the application of digital technologies encourages
this process.
This evolution is requiring new organisational
and work patterns throughout the world. New
competitive companies are networking and or-
ganising themselves in multidisciplinary task-
forces of variable geometry, breaking up tradi-
tional barriers of functional areas. Specialisation
based on knowledge and direct communications
allow to set up specific taskforces for each project.
This flexibility requires creative, talented, respon-
sible leaders with self-programming and team-
work skills, a sense of risk and a will for ongoing
learning. It is such skills that should be fostered
by the educational system of a society willing to
improve its welfare indicators through a more en-
trepreneurial population.
The lack of relational culture can also pose a sig-
nificant obstacle to creating businesses, as social
networks, based on trust and mutual respect, al-
low to get in contact with other stakeholders,
73paradigmes / Issue no. 1 / December 2008
 detect opportunities, create partnerships and en-
courage knowledge transfer. At the beginning
of the creation process it is commonplace that
entrepreneurs use their groups of reference as
points of access to new social networks. This in-
formal learning process is based on a set of skills
that need to be developed during the educational
cycle as, in order to make sure business growth
and consolidation, they will need formal links
with time to reach business agreements and
 develop corporate networks and new forms of
social relations.
An evidence of the big importance given to rela-
tional culture as a driver of success is that many
public bodies supporting entrepreneurship base
their material and financial efforts on encourag-
ing such networking actions. But one cannot fall
prey to the temptation of believing that knowl-
edge and skills are less important than their
 address books. Innovation processes are certainly
interactive and collective, so entrepreneurs do
not innovate on their own. But in fact, most suc-
cessful entrepreneurs did not start with large so-
cial networks. Hence it is more about the level of
qualification, previous experience, capacity to ab-
sorb and assimilate knowledge from outside,
knowing how to take advantage from business
opportunities and a wise choice of interactions
rather than simple closeness between entrepre-
neurs and a given environment or mere size of
their relational networks.
Better productivity will be based on creating new
value-added jobs and knowing how to add more
value to current ones in the future. If Catalan so-
ciety as a whole devotes more efforts to investing
in talent, many ideas should become a tangible
reality, and those others having seen the light can
yield a better social performance.
Talent management74
JOSEP LLADÓS
Doctor in Economics and Business Science at the University of Barcelona.
Vice-rector of Academic Planning and Professors and aggregated professor of
Economics and Business at the Open University of Catalonia.


Educating for enterpreunership: talent, innovation and risk

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