With more young Canadians considering self-employment amid a high youth unemployment rate, entrepreneurship programs are facing growing demand. Applications to Futurpreneur, the national organization that finances young Canadian entrepreneurs, rose 50 per cent last quarter, compared with 15 per cent growth a year earlier.
Yet most entrepreneurship supportive programs, including Futurpreneur’s core startup program, begin at age 18 and expect applicants to arrive with a business idea already in hand. That may be too late.
Both requirements reflect a common assumption: that the entrepreneurial impulse arrives in adulthood. Much research has made a similar assumption, looking for the social and professional influences that shape people after they enter university or the workforce.
We know, for example, that co-workers who have previously run a business can make people notice opportunities they might otherwise miss. MBA classmates can influence one another’s judgments about which ideas are viable and university peers who start businesses can make entrepreneurship seem less risky.
But these influences may begin earlier than researchers and policymakers have assumed. In a recent study, lead author Seok-Woo Kwon and colleagues found that the friends people make in high school may be associated with whether they become entrepreneurs decades later.
The friends who make a difference
To investigate this, the researchers followed two American cohorts born roughly four decades apart. One was a nationally representative group surveyed in the mid-1990s and followed into participants’ late 30s. The other was a Wisconsin cohort followed from 1957 through age 65.
Across both groups, having a teenage friend who later became self-employed was associated with a person’s own business ownership decades later.
But not every entrepreneurial friend counted. Adolescent friends who later build formal, incorporated companies — registered businesses with a legal identity separate from their owners — predicted a person’s entry into both incorporated and unincorporated self-employment.
By contrast, friends who simply worked for themselves informally, as solo contractors or freelancers, predicted nothing at all — not even entry into the same kind of informal work they were doing.
This distinction is important, because formal and informal self-employment are essentially different populations, running different kinds of ventures with different ambitions and earnings. In particular, our previous research has found that formal, growth-oriented entrepreneurship tends to produce greater economic returns.
The relationship also extended beyond whether someone started a business at all. People whose teenage friends later built incorporated companies earned more from their own ventures in midlife than people whose teenage friends did not, even after accounting for whether they themselves had incorporated their businesses.
The difference persisted among people running the same type of business. In other words, two people with similar ventures could have different earnings depending on what their teenage friends had gone on to build.
This suggests that adolescent friendships are associated not only with whether people eventually enter entrepreneurship, but also with the scale or economic performance of the ventures they pursue.
How can a friendship at 16 matter at 40?
The findings raise an obvious question: how can a friendship formed at 16 still matter at 40? There are several possible explanations.
One is that adolescence establishes a social channel through which entrepreneurial examples can continue to travel. When a former classmate registers a company, hires staff or raises capital, that achievement may reach old friends through a reunion, a mutual acquaintance or a social media post.
Research suggests that people are more responsive to information from those with whom they have meaningful social connections than to information from strangers. An entrepreneurial success story may therefore carry particular weight when it comes from someone you knew as a teenager.
This could also help explain why informal self-employment did not show the same relationship. Freelance work tends to remain small and relatively invisible, so it may provide little evidence of what entrepreneurship can become.
But one finding complicates a straightforward social-influence explanation: friendships that persisted into adulthood and those that faded were similarly predictive. If ongoing influence were the whole explanation, enduring ties should have mattered more, since they are the ones carrying advice, encouragement and opportunities.
There is another possibility. Teenagers do not choose friends at random; similarity tends to foster social connection, and adolescents who share an appetite for risk, independence or autonomy may be more likely to become friends.
The data cannot fully distinguish between these explanations, but both point to adolescence as an important period in the development of entrepreneurial pathways. Whether friends shape entrepreneurial inclinations or simply reveal inclinations already forming, something important is happening long before the first business begins.
The window opens earlier than we think
The findings fit a broader body of research showing that entrepreneurial trajectories can take shape long before adulthood.
For instance, children of business owners are far more likely to become business owners themselves. And evidence from adoptees suggests that environment may matter roughly twice as much as genetic inheritance in explaining who becomes an entrepreneur.
The new study adds another social pathway to this picture. The influence is not only parental; it also appears to run through adolescent peers. That has implications for how policymakers and educators think about entrepreneurship support.
Rather than waiting until young people reach adulthood, schools could instead create places where students interested in building things can find one another: through school ventures, maker spaces or small cohorts.
The size of those groups may matter, too. The association in the study was strongest among teenagers with relatively few close friends, suggesting that a single entrepreneurial peer may be particularly visible when there are fewer competing social influences.
The findings also change how we might evaluate entrepreneurship programs. The recent federal evaluation of youth entrepreneurship support in Canada counts loans issued and businesses launched. If entrepreneurial pathways begin taking shape in adolescence, they capture only the end of a process that may have been developing for years.
Entrepreneurship policy should pay more attention to the social environments where entrepreneurial ambitions first take shape. For some, that process may have started long before they had a business idea or even thought of themselves as entrepreneurs: around the lunch table, back in high school.
Comments are closed.