Entrepreneurial resilience

Abstract

The vast majority of businesses in all countries - between 70% and 95% - are micro-businesses, i.e. enterprises that employ fewer than ten people (OECD, 2017). Their impact on the economies and societies in which they operate is therefore significant, collectively acting as important sources of employment, growth and innovation (ibid, 2017). However, the existence of many of these businesses is often precarious, especially in the early stages of their development. Many newly created businesses fail within the first few years of life with mortality rates ranging from around 10% (UK, USA, Sweden) to 45% (Slovak Republic) in the first year (ibid, 2017). As a result, the entrepreneurial activity to create and manage these businesses is very demanding and exposes entrepreneurs to situations which would be expected to create high levels of stress among the general population (e.g. a rapidly changing and unpredictable environment, high responsibility, high workload). The demands of business start-up and ownership could be expected to create a higher risk of mental health problems. Isolation and long working hours could contribute to an increased risk of depression. Moreover, for many entrepreneurs, their business ventures are personal passions and their self-worth and well-being can be intimately connected to the success of those ventures (Murnieks, Mosakowski and Cardon, 2014). On a practical level, the pressures are often high and can create anxiety as personal financial well-being is often directly related to the ability to close the next deal. Furthermore, Spivak, McKelvie and Haynie (2014) highlight a possible “dark side” of entrepreneurship outcomes, finding that habitual entrepreneurs can suffer from symptoms of behavioural addictions - withdrawal-engagement patterns, obsessive thoughts, and negative emotions - arising from repeated venture creation activities. However, at the same time, Baron, Franklin and Hmieleski (2016) find that entrepreneurs experience lower stress compared to other occupational groups when creating new ventures. Baron et al (2016) suggest self-selection effects as the underlying mechanism producing entrepreneurs that are above average (as a group) in their capacity to handle stress effectively, arguing that those who persist in entrepreneurship acquire this capacity, the resilience to handle the stressors and challenges of their entrepreneurial context.