The Allan Gray Orbis Foundation (AGOF) recently released the results of a national entrepreneurial mindset survey of 3,661 individuals from across South Africa. The Global Entrepreneurship Research Network-led study indicates that it is possible to determine likely characteristics shared by entrepreneurs, and how these differ between women and men. For policymakers concerned with increasing entrepreneurship-led economic growth and job creation, and for leaders of private sector entrepreneurship support organizations, the findings can be used to make their programs and initiatives more effective by tailoring them to build out individual, gender-specific strengths.
A key challenge faced by policymakers charged with improving the population’s entrepreneurial abilities is the lack of data on the entrepreneurial traits, cognitive processes, and behavioral dispositions of the general population, a specific group (such as an accelerator cohort), or of individuals in particular.
The tools that exist to assess entrepreneurial mindset come, generally, in three distinct categories:
- those found through a simple internet search but for which no data are publicly available
- those that provide reliable data, but which focus on a single trait or attribute and make no claim to be comprehensive, and
- those intended to provide a broad description of traits related to entrepreneurial performance.
But, simply put, no rigorous, individual-level survey exists to provide a baseline against which the effects of programmatic efforts and ecosystem change can be compared over time. Knowledge of benchmark entrepreneurial attributes can serve as the base for critical decisions around directing resources toward developing and incentivizing best practices. Further, program leaders lack the data necessary to develop programs that focus narrowly on addressing the particular attributes of individual participants (whether they be strengths or weaknesses).
As a result, public and private sector decision makers are often unable to direct resources –mentoring, capacity-building, financial support, and the like – in a way that would benefit those entrepreneurs who are most likely to need and make use of such support. If it was possible to know that a first-time entrepreneur exhibited weakness in a particular area while showing strength in other areas, then a mentor could laser focus her/his time and attention.
Mindset Survey Development Process
AGOF, GERN and MindCette undertook a multi-year, highly rigorous, scientifically-grounded process to create a comprehensive survey for measuring and assessing entrepreneurial mindset. (See, Toward a Comprehensive Measure of Entrepreneurial Mindset). The process included a thorough Literature Review and, to ensure that the resulting survey met with the highest scientific standards (and therefore can be relied upon by decision makers), subjecting the methodology to peer review by the academic community.
Successful peer review is a key component of the survey validation process. The leaders of the project, Kelly Shaver of MindCette and Immanuel Commarmond of AGOF, submitted the methodology to the Research in Entrepreneurship (RENT) Conference selection committee, which through peer review selected it for presentation in 2017. Then, from 160 papers submitted to the committee, it selected the Mindset Project to be one of 14 published in the RENT anthology following two more rounds of peer review. In addition, through peer review, the review committee for Babson College’s Entrepreneurship Research Conference selected the study’s resulting data for presentation at their 2018 event. See, Assessing Entrepreneurial Mindset: Results for a New Measure.
The Entrepreneurial Mindset Survey
In addition to being comprehensive and rigorously validated, the survey that emerged possess several other advantages. For instance, it has the richest array of constructs; a large number of questions (also known as “items”) validated as essential by factor analysis; and, it separates results among women and men. The last point is particularly noteworthy because although extensive entrepreneurship research exists that show important gender differences, there was no other reputable mindset survey that separates answers by women from those by men.
The questionnaire consists of 72 items, which capture nine dimensions:
- Entrepreneurial desire
Toward a Comprehensive Measure of Entrepreneurial Mindset describes the process employed to reach these 72 questions, which involved identifying the 37 separate constructs that have been used to characterize entrepreneurial mindset and developing a pilot questionnaire (which had 116 items). This pilot questionnaire was administered to 217 females and 183 males in South Africa. The pilot data were factor analyzed (separately by gender), thus the set of 116 questions to the 72.
National Survey of South Africans
AGOF commissioned African Response, a professional polling firm, to administer the 72-question survey to 3,661 individuals representative of South African society. African Response created four groups of respondents: 1) an omnibus, general population survey (that is, a randomly selected nationally representative sample; 2) a booster sample, also randomly selected, but in locations that were chosen to maximize the number of business owners; 3) a separate sample comprising female business owners (included to facilitate research into gender differences); and 4) fellows of the Allan Gray Orbis Foundation.
In South Africa, 11 dimensions appeared to describe female entrepreneurs, and 10 appeared to characterize male entrepreneurs. Only two of these dimensions (Entrepreneurial Desire and Permanence) were identical in male and female respondents (Allan Gray Fellows scored higher in both of these dimensions). Seven additional dimensions were common to both women and men, varying only in terms of the numbers of items in each dimension. These are:
- Resilience and
Of the 3,661 respondents, only 3,647 answered all of the relevant questions. Among these 3,647 people, there were 561 who reported being self-employed and 3,086 who did not.
Comparisons of the self-employed to those not reporting self-employment revealed significant differences on all nine core dimensions. Entrepreneurs had higher scores on the eight dimensions where high scores are more desirable, and lower scores on the one dimension where low scores are desirable. In short, the overall measure distinguishes entrepreneurs from others in exactly the way that the extensive literature predicts. Thus, the Mindset Survey, now available to the public as the MindCette Entrepreneurial Test, is a valid representation – all in one place – of numerous constructs that predict entrepreneurial success. There were also significant differences between women and men on two dimensions – entrepreneurial desire and self-control.
Inherent in these results are two primary implications for policymakers and program directors. First, there is now a comprehensive, validated measure available to assess entrepreneurial propensity. Why is this important? One word: benchmark. It is exceedingly difficult to know where you are going if you do not know where you are.
For example, more than 70 countries participate in the data gathering for the Global Entrepreneurship Monitor (GEM) in the belief that it is important for them to know where their levels of entrepreneurial activity fit in the world scene. As valuable as it is to know these society-wide numbers, GEM contains essentially no psychological data on the people who will (or will not) respond to changes in policy or programming designed to enhance entrepreneurship. Without knowing more about the individuals within their societies, policymakers risk allocating resources for initiatives that fail to address the individual concerns of people who would consider starting new companies. Knowing whether people in your country are, for example, generally high on resilience but generally low on innovation would suggest the value of including creativity training in whatever programs were developed. By contrast, if the trait combination were the reverse, programs that allow people to fail but recover from that failure would be much more important than programs to teach creativity.
Second, because the gender differences were limited to two of the nine dimensions, programs designed to enhance entrepreneurial behavior can afford to treat men and women similarly, with the exceptions of entrepreneurial desire (where men’s scores are already higher) and self-control (where women’s scores are already higher).
The value of this knowledge cannot be overstated. Remember, this entire project began by factor analyzing the individual responses separately by gender. No other multiple-construct test of entrepreneurial mindset began with this important step. Research shows that given the concept “entrepreneur,” people tend to associate more masculine traits with that concept than feminine traits. Consequently, a test that does not differentiate between the responses of males and the responses of females will necessarily be attempting to fit the psychological characteristics of women into the “mold” derived from the psychological characteristics of men. This puts women who might start companies at a competitive disadvantage. The good news, however, is that even with careful separate consideration of the characteristics of women and men, and despite differences in the item sets on seven of the nine mindset dimensions, the final scores for the two genders are essentially the same. Leaders who design programs to enhance any of those seven dimensions can take comfort in the fact that comparable training is warranted, even though the underlying psychological characteristics have been assessed in a gender-appropriate manner.