The photo illustration in this material was made with the help of an artificial intelligence software / © Panorama
During a time of multiple crises, including both pandemics and war, and with increasing economic recessions, any discussion about recovery is affected by our attitudes toward failure and risk.
Economically, with record-high debt and increasing expenses, the recovery we hope for will be strongly influenced by the resilience and courage of entrepreneurs.
However, as we will see in this visual story, Romanians aren’t in the best position. Our fear of failure in business overlaps with our toxic relationship with money and the future (which Panorama has explained in the documentary “Why We Live from Day to Day,” which you can watch HERE). Furthermore, there are various reasons why women are still underrepresented in the entrepreneurial field, including complex, systemic issues that are difficult to understand and address.
Fear plays a dominant role in our daily lives, without us even realizing it. Many of the decisions we make are based on the instinct of self-preservation, the need to avoid ridicule, and uncomfortable or dangerous situations, whether we’re talking about physical, emotional, or financial danger.
The concept of fear of failure has become increasingly relevant in today’s fast-paced, constantly changing world. As we navigate new forms of work, living, and consumption, the need to adapt and evolve often requires taking risks that may result in failure. Whether it’s switching careers, exploring new industries, or experimenting with new habits, taking action often involves the potential for failure.
However, the fear of failure is a crucial aspect of the entrepreneurial journey. How individuals and businesses handle and learn from multiple instances of controlled failure can greatly impact their overall success and longevity.
Fail fast, fail cheap, and learn from your experiences. That’s a mantra from the entrepreneurial world. But the reality is that not everyone has the courage to fail and, especially, to control the dimension of the failure.
According to data from the Global Entrepreneurship Monitor, Romania ranked among the highest in Europe in terms of fear of failure in 2021. Countries such as Greece, Spain, Cyprus, and Ireland also had high levels of fear. The data also revealed that Romania’s fear of failure has been at its highest level since the economic crisis of 2008. The years of 2011 and 2013 were the least fearful.
The impact of the pandemic likely played a role in this trend, and it is important to consider this when forecasting future economic developments, particularly in light of ongoing events such as the war in Ukraine and the energy crisis.
Fear of failure evolution (2007-2021):
At the same time, if we look at entrepreneurial intentions, we find that the percentage of those who plan to start a business in the next three years is considerably lower than in recent years. This is happening for various reasons, fear of failure and uncertainty playing a major role.
Fear of failure = Percentage of population aged 18-64 who agree that they see good opportunities, but would not start a business due to fear of failure.
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Fear is the brain’s warning system for future unpleasant experiences. Our ancestors’ vigilance equipped us with an extraordinary ability to focus on danger signals. We are prepared to capture negative signals and give them more importance than they deserve. This evolutionary trait of being constantly on the lookout for danger has consequences on our lifestyle. Even when our physical integrity is no longer threatened at every step, we tend to be vigilant and try to avoid danger as much as possible.
Today, risks and dangers have become more abstract, and failure is one of them.
In medical terms, fear of failure is called atychiphobia. People with atychiphobia find it difficult to cope with failure due to a lack of confidence in their abilities. They believe that if there is a chance of failing at something, it’s not worth even trying.
Fear of failure has become a significant barrier for many individuals considering entrepreneurship. A 2018 report by the Global Entrepreneurship Monitor revealed that approximately one-third of individuals who had aspirations of starting a business did not pursue it due to their fear of failure.
The fear of failure in entrepreneurship has a gender culture component, as women and men relate differently to risk.
In Romania, men dominate entrepreneurship. Data from the National Office of Trade Registry shows that in over half of the country’s counties, only a third of company associates/shareholders are women. The counties with the most female entrepreneurs are Tulcea, Galati, and Braila, while the opposite is true in Sibiu, Botosani, and Harghita.
Despite this small percentage of female entrepreneurs in Romania, compared to the rest of Europe, the country is doing well.
The European Commission states that female entrepreneurship is an “underutilized source of economic growth” that promises jobs and innovation. Therefore, it should not be ignored in discussions about economic recovery.
The fear of failure in the entrepreneurial sphere has deep roots in culture and education.
The way failure and the reaction to it are taught at a young age plays a significant role in shaping a child’s future success.
Studies have shown that fear of failure can sometimes have a positive impact on a child’s school performance.
An OECD study from 2018 PISA tests found that a healthy dose of fear of failure can lead to better test results. Specifically, the study analyzed the reading test performance of children in relation to their level of fear of failure.
The fear of failure was found to have a positive impact on reading performance among girls in developed economies, with girls in the United States and Finland improving their scores by 17 points, higher than the OECD average of 9 points.
Girls in Romania also showed a 9-point improvement, similar to scores found in several states in Asia and Eastern Europe. This suggests that other factors may be responsible for the gender gap in Romania’s entrepreneurial environment.
However, not all students responded positively to the fear of failure, with some in Latin America and the Balkans showing a decrease in performance, indicating a lack of readiness for stressful situations.
If in most states girls are strongly motivated in crisis situations, in 31 out of 75 countries, boys recorded lower scores in reading when confronted with the fear of failure.
Boys in Romania recorded among the largest gaps from the normal result when faced with the fear of failure.
The data visualization shows that, like in the case of girls, in the case of boys, the economic development of the state (and implicitly the education system) increases the child’s competitive potential and ability to mobilize to avoid failure. In these states, children are properly equipped to respond to stressful situations. It is a trait that matters a lot in adult life.
However, why do girls, mostly, avoid failure, but at the same time, we see that they feel motivated when they are faced with potential failure?
In the previous data visualization, we saw that girls respond differently to failure compared to boys. When girls make mistakes, it is more likely that they interpret failure as a sign of a lack of skills – a factor that is much harder to change. Boys, on the other hand, tend to attribute failure to more controllable, external circumstances.
In her book, The gift of failure, Jessica Lahey talks about how girls are usually protected from mistakes by their parents and end up fearing failure greatly, which is why they avoid risks and focus on appearances and the image they leave in society, at the expense of learning from mistakes. This, Lahey argues, leads to an increase in vulnerability to depression, anxiety, and stress.
Globally, the number of women with depressive and anxiety disorders is much higher than that of men, and in recent years, the number of anxiolytics prescribed has increased in Europe.
When faced with poor results, or even failure, girls are prone to evaluate that the fault is their lack of talent. This has also been analyzed by Science Advancements in the 2018 PISA tests. According to this study conducted on a sample of 500,000 students from 72 states, to the question “When I fail, I’m afraid that I might not have enough talent,” over 60% of girls responded that they agree with this statement, while boys responded affirmatively at a rate of only 47%.
Girls constantly doubt their abilities, which, however, makes them more motivated to prove the opposite. This data visualization shows the difference in self-confidence between boys and girls. Again, in Western Europe and developed economies, boys have a great deal of self-confidence, while girls record low indices in this chapter. This makes the difference between boys and girls significant. At the opposite pole, in the Balkans and Asian states, girls are the ones who believe more in their own strength. If we refer strictly to Romania, we notice that the score difference between boys and girls is small. Boys and girls have confidence in their own strengths equally.
Once again, the strong gender gaps seem to intensify later in life, which suggests that we are talking about cultural and systemic problems, such as the inclusion of women in the Romanian labor market, equal opportunities, and so on. Studies have shown that attitudes can be particularly toxic for women, as negative stereotypes about their abilities can deeply affect self-confidence.
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