HEY THERE! Robert Baron and Michael Frese – recipients of a prestigious €100,000 research award

Why do some people choose to become entrepreneurs, while others do not? And what determines the success of an entrepreneur? Professor Robert Baron and Professor Michael Frese have spearheaded research that answers some fundamental questions about psychology and entrepreneurship. Therefore, they are awarded the prestigious 2024 Global Award for Entrepreneurship Research with a prize money of €100,000. Esbri asked the researchers a few questions.

Robert Baron, Oklahoma State University

Congratulations on the award! What does it mean for you as a researcher and for you personally?

– When we plan and conduct our research, we hope that it will be viewed as a contribution by other researchers in the field. Receiving this wonderful award helps me to reduce my anxieties over this crucial issue!

– I should add that when I say ‘my research’, I am actually referring to ‘our research’, because I am indebted to colleagues who worked closely with me to generate the ideas and research we then conducted. I am thinking in particular of Keith Hmieleski and Jintong Tang with whom I worked on many projects, and Rebecca Henry, who was the original source of my thinking about pattern recognition and its role in opportunity recognition.

What factors determine who becomes an entrepreneur and who does not?

– The life-shaping decision to become an entrepreneur, like all complex decisions, derives from many sources. Some of them are personal, such as individual goals, skills and abilities, self-confidence and individual creativity. along with the energy and passion to develop the ideas this generates.

– Also, many environmental variables play a key role, for instance general economic conditions, availability of needed resources, size of potential markets, current competition, and the possibility of obtaining patents.

What determines success or failure as an entrepreneur?

– In fact, this question raises another one that has not often been directly addressed by our field: “What, precisley are success and failure?” Should these outcomes be measured solely in terms of observable outcomes such as sales, profits, number of employees and other concrete results? Or should they also be evaluated in terms of the entrepreneurs’ own view of their success?

– In the past, emphasis has been on the first approach, but research findings indicate that entrepreneurs actually seek many different non-financial goals. For example, goals such as greater personal autonomy, the ability to express their creativity, to contribute to their families and communities, and helping to solve important social problems such as famine or disease.

In your opinion, what is your main contribution to understanding the entrepreneur?

– Academe, I believe, is not a single ‘ivory tower’, but rather many such towers, each surrounded by moats that limit contact between them. This can result in situations where several related fields work on the same topics and questions without awareness of each others’ research and so, in a sense, invest time and effort in ‘reinventing the wheel’. I have tried to overcome this problem by acting as an ‘importer’ of psychology’s findings and theories into the field of entrepreneurship. I am truly gratified that these efforts are being recognized with this award.

– Stephen Covey, author of “The 7 Habits of Highly Effective People” once remaerked: “We see the world, not as it is, but as we are – or, as we are conditioned to see it.” To which I’d add: and it is our training, experience, skills and personal traits that shape our perceptions – and our efforts to understand entrepreneurs and the process through which, in some instances, they change the world.

Professor Michael Frese, Asia School of Business and Leuphana University of Lueneburg.

Congratulations on the award! What does it mean for you as a researcher and for you personally?

– I am very happy to recieve this award! Also, there are many people who have worked with me, that I would like to dedicate this award to, such as, my PhD students and researchers in Africa, South America and Asia who has been my research collborators.

Why do some people choose to become entrepreneurs and others do not?

– There are many factors that determine this. One reason could be that there are no jobs and starting your own business is the only way. This is often called necessity entrepreneurship.

– Then there is opportunity entrepreneurship. This is when you have a really good idea for a service or product that only you can provide, and you decide to become an entrepreneur. However, this differentiation is not as good as it sounds. Even opportunity entrepreneurs have to work hard just like others to put food on the table, so in a way they are also necessity entrepreneurs.

– An interesting thing about the motives for entrepreneurship is that it doesn’t matter for success whether you run a business because you want to or because you have to. What we can see in a few studies is that opportunity entrepreneurs are slightly more satisfied with their choice of occupation than others. In contrast, necessity entrepreneurs earn slightly more money. By and large, however, these differences are negligible.

– But by far the most common reason why people choose to become entrepreneurs or stay on as entrepreneur is because they don’t want a boss. Even if they were to earn more, they would not choose to take a job. This is true everywhere, both in developing and developed countries. It is very interesting!

What influences the success or failure of your business?

– Personality plays a really big role. Those who can plan, have drive to achieve something, take action and are ready to work hard are more successful than others. If you also feel that you can achieve things on your own and are not just a pawn in a system, it is very advantageous. However, people who are risk-oriented do not succeed better than others.

– Personality is difficult to change, so it is more interesting to look at people’s orientation and action characteristiics. Orientation is about believing in your ability to do things, actually believing that I will be able to sell things to customers and develop innovations. Action competence is about, for example, being able to plan well and set high goals, as well as have a good understanding of the envrionment. All of this is very important for sucess as an entrepreneur and more interesting than personlaity in this context because action competence can be taught.

What is your main contribution to understanding entrepreneurs?

– One contribution is that I researched interventions for improving entrepreneurship, a bit like testing the safety and effectivness of medicine. Using a randomized control group designs, I know if I am on the right or not before I deliver the intervention to many people. I am not alone in this, but I was one of the first to do this in entrepreneurship training research.

– People look too much at personlality in relation to entrepreneurship. Whille personaity is important, it is difficult to change. Therefore, my research contributions on mindset and action characteristics are important because I could show that they can be changed. Our entrepreneurship training is extremely action-oriented compared to most others in the world. All students start a buisness in their first session, then run that business, and all discussions center on actions they take with their business.

More about the prize
The Global Award for Entrepreneurship Research has a prize money of €100,000. The award is sponsored by the Entrepreneurship Forum and the funding bodies Vinnova and the Royal Swedish Academy of Engineering Sciences (IVA). Read more about the award at e-award.org.