A recent study of Norwegian business owners by the National Bureau of Economic Research found that, when it comes to entrepreneurship, Father really does know best.
Sons and daughters who start businesses in the same industries as their fathers tend to “outperform peers in the same industry whose fathers did not work in that industry.” In fact, business owners who follow in their fathers’ footsteps are “noticeably more successful after four years of operation” than those who don’t enter the same industries as their fathers.
The study also revealed that business owners who enter their fathers’ industries tend to have more employees and more assets.
Study participants said they often chose the same industries as their parents because they gained familiarity with those industries during family conversations at home and while observing parents at work. Many highlighted the transfer of industry-specific knowledge from parent to child as a factor in their decision-making. However, the study’s authors also noted that a child’s choice of industry could easily be influenced by “parental pressure or expectations to enter it, or because of similarities in tastes.”
The exception to this rule is high-IQ entrepreneurs, who were measured as substantially less likely to follow in their fathers’ footsteps. The study found that high-IQ entrepreneurs were four times more likely to enter into technology entrepreneurship, and the odds of launching a technology-based small business increased by two percentage points for each point increase in IQ.