It’s official, entrepreneurs ARE risk takers

Scientists at Cambridge University have found that entrepreneurs’ brains work differently to those of hired managers.

The facts:

Research published in Nature Magazine found business owners’ brains are more active in the region responsible for making snappy decisions.

Sixteen entrepreneurs from the tech sector were recruited for the challenge and matched with 17 senior managers from the public and private sector. They were matched for age, intelligence and social background.

The test, the first of its kind in the UK, forced both groups to make ‘cold’ decisions, which carried no risk, and ‘hot’ decisions which carried a large amount of risk.

Entrepreneurs and managers scored about the same on cold choices, but on hot choices, which involved an element of gambling, entrepreneurs were more impulsive and flexible in their decisions. 

According to Barbara Sahakian, who headed up the research, entrepreneurs had more developed “medial and orbital sectors of the prefrontal cortex”. But he added that the mental processes required to take greater risks could be taught, or enhanced with drugs.

They said:

“This study has shown that not all risk-taking is disadvantageous, particularly when combined with enhanced flexible problem solving,” said Sahakian.

“In fact, risky or ‘hot’ decision-making is an essential part of the entrepreneurial process and may be possible to teach, particularly in young adults where higher risk-taking is likely and age-appropriate.”

We say:

This confirms what we all new: that you have to be prepared to take risks if you want to be an entrepreneur, and that risk-taking (within reason) is healthy and should be encouraged in business.

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By News Desk  on   Nov 13,2008

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Keywords

entrepreneurs    business owners    risk    decision making   

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