Which generation is most likely to succeed in business?

When it comes to studying entrepreneurship, a lot of effort is spent trying to determine the personality traits that distinguish enterprising individuals from other people. However, simply possessing these characteristics does not necessarily mean that someone will set up a successful business—what really matters is the way that these traits influence and shape a person’s intentions.

The concept of entrepreneurial potential refers to a person’s natural ability to perceive opportunities and act on them, to create value by starting new businesses, and to find innovative solutions when faced with uncertainty.

More broadly, it has to do with individual freedom to change, grow, develop and adapt in relation to market uncertainties and opportunities. Entrepreneurial potential is more about the likelihood of entrepreneurship that derives from someone’s personality than entrepreneurship itself.

This potential is the product of a complex bigger picture, which also encompasses an individual’s skills, their economic and social circumstances, and their ability to manage the risks associated with creating and growing a new business.

One of the most interesting aspects of entrepreneurial potential is that it varies significantly depending on the generation to which an individual belongs, as each generation is influenced by different historical, economic and cultural contexts that affect attitudes towards entrepreneurship.

Intergenerational teams

The generation a person belongs to can also affect their working environment, especially in intergenerational teams. Many studies claim that employees prefer to work with people of the same age, and that generational diversity can be a source of friction.

However, other research suggests that generational diversity is highly valued, especially in leadership teams, and is considered as important as other types of diversity—religious, gender, cultural, racial, ethnic, and so on—in its impact on job performance.

Generational differences in work teams can create tensions in areas such as knowledge transfer, expectations and communication among employees. Therefore, intergenerational work teams need to be properly managed in order to achieve the best possible results.

Boomers in the workplace

Baby boomers—those born between 1946 and 1964—grew up in an era defined by economic prosperity and hierarchical structures, so they tend to value stability and job security.

Since many boomers are now at retirement age, their entrepreneurial potential has not been studied as much as their entrepreneurial activity. Studies have found that members of this generation tend to be resilient, value hard work and loyalty, and have high levels of confidence and a strong need for success.

Generation X, Y, Z: entrepreneurs and workers

Members of Generation X—those born between 1965 and 1980—grew up during times of economic and technological change, making them adaptable and open to innovation. They are considered to have a pragmatic approach to work and to be good resource managers. In an entrepreneurial context, they tend to have moderate entrepreneurial potential, and they value both security and autonomy in their careers.

Generation Y, also known as millennials, who were born between 1981 and 1996, are known for their familiarity with digital technology and their desire for flexibility and purpose in their work. They tend to have high entrepreneurial potential due to their desire to challenge the status quo, their willingness to take risks, and their inclination towards change. They value independence and are more willing to leave traditional jobs to start their own businesses in search of better work-life balance.

Members of Generation Z, born from 1997 onwards, have grown up fully in the digital age, which gives them natural skills in technology and social media. However, their entrepreneurial potential may be lower than that of previous generations.

Generation Z—digital natives, but poor communication skills

Generally, a generation is defined by its contemporary political, socio-economic and cultural events. In the case of Generation Z, they share much of Generation Y’s broader context of globalization, digitization and social and cultural change. However, members of Generation Z—the latest generation to enter the labor market—have comparatively lower average scores in areas like communication skills, confidence, desire for success and internal control. All this translates into lower entrepreneurial potential.

It is worth noting that this lack of confidence and interest in taking the initiative may be explained by Generation Z’s youth, and their poor communication skills may be the result of them being the first generation of digital natives. As they mature and become more experienced, these characteristics are likely to evolve, and researchers should take note of this.

The most entrepreneurial generation

Based on the available research, millennials appear to be the generation with the greatest entrepreneurial potential. Members of this generation show a significant inclination towards entrepreneurship, are familiar with new technologies, and tend to start businesses at a younger age than previous generations.

What is more, they have leadership skills, focus and ambition which, compared to other generations, makes them more predisposed to leaving stable jobs in order to pursue entrepreneurial opportunities.

This article is republished from The Conversation under a Creative Commons license. Read the original article.