Risk-taking backed in business world

Risk-taking is a necessary trait for being a mogul, scientists at the University of Cambridge have found.

The researchers discovered those riskier decision-makers are much more likely to become entrepreneurs than their managerial equivalents.

Previously thought to be an abnormal expression of behaviour by psychology and biomedical research, the study has revealed risk-taking behaviour can produce constructive results for entrepreneurs in critical fiscal situations.

"This study has shown that not all risk-taking is disadvantageous, particularly when combined with enhanced flexible problem solving," Professor Barbara Sahakian, lead author of the study, said.

"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."

Entrepreneurs differ from managerial counterparts in that many start their own businesses rather than work with an existing company and accept the inevitable risks associated with the decision, including those that affect personal and family life.

Scientists believe that the risky decision making by entrepreneurs could have an evolutionary importance for fast-shifting surroundings and could be in the future taught or enhanced by pharmaceuticals.

"From previous studies we know that drugs can be used to manipulate dopamine levels, leading to changes in risky decision-making. Therefore, our findings also raise the question of whether one could enhance entrepreneurship pharmacologically," Prof Sahakian said.