Your high school friends may shape whether you become entrepreneur decades later

With young Canadians increasingly eyeing entrepreneurship as unemployment rates remain high, programs aimed at fostering entrepreneurial spirit are seeing growing interest. One such organization, Futurpreneur, has seen a 50 per cent jump in applications over the past quarter compared to the previous year's 15 per cent growth.

However, most such programs, including Futurpreneur's core startup initiative, begin at age 18 and presume applicants come armed with a pre-existing business idea. This may be too late, as research indicates that the entrepreneurial impulse can emerge much earlier in life.

Most studies investigating the factors that shape people's path to entrepreneurship focus on influences that occur after university or entering the workforce. Yet, a recent study by lead author Seok-Woo Kwon and his colleagues suggests that the friends we make in high school could also play a significant role.

The researchers analyzed two American cohorts, one from the mid-1990s and another from 1957, both followed until participants reached their late 30s and 65 years old, respectively. They found that having a teenage friend who later became self-employed was linked to that person's own business ownership decades later.

However, not all entrepreneurial friends had the same impact. Friends who later founded formal, incorporated companies predicted their former classmates' entry into both incorporated and unincorporated self-employment. In contrast, friends who engaged in informal, solo contracting or freelancing work did not influence subsequent entrepreneurial pursuits.

This distinction is crucial, as formal, growth-oriented entrepreneurship tends to generate greater economic returns. The researchers' findings also indicate that the relationship extended beyond simply starting a business. People whose teenage friends went on to establish incorporated companies earned more from their own ventures in midlife, even when accounting for whether they themselves incorporated.

These results suggest that the businesses friends start at 16 may influence both whether their former classmates enter entrepreneurship and the scale or economic performance of the ventures they pursue. While ongoing friendships, whether enduring or fading, showed similar predictive power, the data do not fully determine whether the influence stems from the social connections themselves or simply reveal pre-existing inclinations.

The study aligns with other research highlighting that entrepreneurial paths can form well before adulthood. Children of business owners are more likely to become business owners themselves, and evidence from adoptees suggests that environment may account for roughly twice the influence of genetic inheritance in determining entrepreneurial tendencies.

This new research adds another layer to the picture, indicating that adolescent peers can shape entrepreneurial trajectories. Policymakers and educators may need to reconsider when and how they support aspiring entrepreneurs, potentially creating opportunities for students to explore and develop interests in building things from a younger age.