Courage can be a double-edged sword when it comes to economic success

Courage can be a double-edged sword when it comes to economic success

Washington: While modern economies demand daring, bold and entrepreneurial individuals who want to make it big, however, according to a recent study the same qualities can bring greater risks.

According to the researchers, the modern society often requires some sort of courage/bravery/personal agency to cope with the uncertainty of current times, which present people with less clear career paths, extreme technological change, lots of societal challenges and other unsettling trends
“Those same personality traits are able to take advantage of the unprecedented opportunities that now exist to foster creativity, entrepreneurship, ‘changing the world’ via innovations, global exchange, use of new technologies, and the development of fascinating new products and services,” Martin Obschonka, lead researcher of the study said.

Findings of the study were published in the Journal of Personality.

Explaining the study further, the researchers stated that courage seems to contribute to more economic vitality in a region with more entrepreneurship rates and more start-ups. This finding supports the general assumption that it requires brave people to drive modern economic activity, compared to historical times when it required a workers culture to stimulate the economy with its large industries and factories.

“The dark side to courage is that we found evidence it is associated with risk-taking and higher start-up failure rates,” said Tobias Ebert, lead author of the study.
Obschonka said this tendency could be called ‘blind’ courage which may undermine a realistic evaluation of risks.
“In other words, a too strong courage might increase uncertainty and risks. So educators, policy-makers, entrepreneurs etc. should keep in mind that while promoting courage can be a powerful tool in growing a local economy, it can have a down side,” Obschonka added.

“Regions with elevated levels of courage show higher start-up rates so findings suggest a lack of courage within local populations might be an important driver of the consistently weak entrepreneurial dynamic in areas like the rust belt,” said Obschonka.

“Yet companies founded in these courageous regions demonstrated a lower share of start-ups surviving the first five years after foundation,” Obschonka concluded.

According to the researchers, the findings suggest that excessive courage within local populations comes at a cost and might contribute to an overheated regional economic climate.

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