Resilience and entrepreneurship

What is the resilience theory?

Resilience is the ability to get up after you fall down, whether it be physically, psychologically, cognitively, financially, socially, or economically. Resilience is expected to be an important capability of entrepreneurs because they typically face numerous failures on their way to eventual success.

The idea of resilience as a virtue for entrepreneurs is appealing because it soothes the failed or failing entrepreneur. It involves a belief that continuing on despite setbacks is better than withdrawing from entrepreneurial activities. For example, the popular idea of the pivot implies the need to change directions as reality comes into focus.

Ayala and Manzano (2014) find that Spanish small business owners are more resilient than the general population, highlighting the sub-construct of resourcefulness.  Bullough, Renko and Myatt (2014) focus on entrepreneurs during times of war, who show great resilience in the face of conflict.

Entrepreneurial resilience is a borrowed theory, arguably from evolutionary theories, where resilience increases survival and reproductive success. Like all borrowed theories, it suffers from the limitation that while it may apply to entrepreneurs, they do not monopolize it. Even if there is a strong link between entrepreneurship and resilience, there is likely also a link between resilience and others things, like success in battle, managerial effectiveness, or even early child development (Luthar, Cicchetti, & Becker, 2000). The other problem is that we know that entrepreneurs have many other traits that are important for their success.

Sources:

Ayala, J. C., and Manzano, G. (2014). The resilience of the entrepreneur. Influence on the success of the business. A longitudinal analysis. Journal of Economic Psychology, 42, 126-135.

Bullough, A., Renko, M., and Myatt, T. (2014). Danger zone entrepreneurs: The importance of resilience and self‐efficacy for entrepreneurial intentions. Entrepreneurship Theory and Practice, 38(3), 473-499.

 

Luthar, S. S., Cicchetti, D., and Becker, B. (2000). The construct of resilience: A critical evaluation and guidelines for future work. Child development, 71(3), 543-562.