A New Frontier: The Dark Side of the Entrepreneurial Economy

The entrepreneurial economy may feel like a new frontier, but it may have a dark side.

Peter Harms, PhD, professor of management at the University of Alabama’s Culverhouse College of Business, spoke about two trends: (1) the shift toward an entrepreneurial economy and (2) the increase in mental health disorders. Peter discussed some of his recent research about how the entrepreneurial economy may have a dark side for mental health, particularly for younger generations.

“Are there generational changes that might intersect with dark personality to predict how future generations are going to interact with the workforce?” Peter asked.

Keep reading to learn about the characteristics of the entrepreneurial economy, how it might bring out dark personality, and potential effects on talent and organizations.

The Growth of the Entrepreneurial Economy

As technology causes the economy to shift and evolve, business scholars have observed that the world of work is becoming more entrepreneurial. The characteristics that help entrepreneurs succeed are also increasing in nontraditional work settings, such as the digital environment.

Peter brought his longstanding interest in dark-side traits to the entrepreneurial economy to explore the organizational effects of mental health disorders in our new global workplaces. But first, he acknowledged that so-called “gig” workers are a huge group of people with many different motivations and reasons for holding gig jobs.

A Catalyst for the Entrepreneurial Economy

The COVID-19 pandemic catalyzed the emergence of the entrepreneurial economy. Some people actively sought remote work, while others seemed to be forced into it. The rising prevalence of workplace alternatives since 2020 has made both workers and organizations reconsider where and how work should take place.

That evolution had negative effects on mental health, however. The pandemic has been associated with stress and trauma for many: loneliness, isolation, grief, and thoughts of suicide.

A Definition of the Entrepreneurial Economy

According to Peter, the entrepreneurial economy breaks conventional expectations of what makes a workplace in four ways:

• Remote or hybrid work
• Freelance employment
• Digital settings
• Cryptocurrency

The entrepreneurial economy includes content creation, social media influencer work, crowdfunding, cryptocurrency, gig work, and many other forms of self-employment or independent employment. Working with tech assistance from the office, home, coffee shop, lobby, vehicle, or a combination of locations also characterizes this category of work.

“People who are using the digital space like a new work environment . . . it’s like being an entrepreneur in the digital space,” Peter said.

Dark Personality and the Entrepreneurial Economy

Mental health issues and personality disorders seem to be on the rise. Self-reports of mental health disorders have recently increased, particularly among younger people. Younger people appear to be more willing to seek therapy or other mental health support, compared to older people.

In Hogan terms, dark-side behaviors originate from strengths that can become overused when a person is not self-regulating. These behaviors can negatively impact work performance. In an entrepreneurial economy, where work tends to be self-directed or discretionary, dark-side behaviors can manifest. Shifts in technology have increased workers’ autonomy, which means that the dark side may have even more influence on the behaviors we see at work.

Peter observed that increased power and autonomy don’t change someone’s personality, but discretion can help to reveal the dark side of it. “With less constraints, less filters on you, who you are tends to emerge,” he added.

What Is Dark Personality?

Dark personality traits aren’t limited to the Dark Triad‘s narcissism, Machiavellianism, and psychopathy. The Hogan Development Survey (HDS) is a nonclinical measure of the dark side of personality, which consists of 11 characteristics that tend to emerge when people are under stress or pressure. These behaviors are called derailers because they can impede workplace success.

Peter emphasized the importance of nuance in exploring how dark-side behaviors can affect workers in the entrepreneurial economy. Someone who enjoys taking risks (i.e., someone who scores high on the HDS Mischievous scale) might want to become involved in crypto or blockchain. Someone who is privately passive-resistant (i.e., scoring high on HDS Leisurely) might be attracted to roles with little supervision or pressure for productivity.

“The technology is opening the door, and it’s the dark personality that’ll help us understand how people react,” Peter said.

Generational Differences in Dark Personality

Some dark traits seem to be more prevalent among younger generations. Young people are medicated for mental health disorders at a much higher rate than in the past. However, it’s unclear whether the symptoms themselves are more prevalent or whether young people are more likely to seek out treatment.

Peter mentioned some possible contributing factors to derailing behavior in younger people. One is increased awareness and acceptance of mental health disorders. Social media often presents mental illness as being commonplace.

Another is that younger people demonstrate a greater likelihood of taking risks, including creative or innovative risks that characterize entrepreneurship. While older people tend to develop a more conservative attitude toward risk, younger people can be willing to stake their livelihoods on an idea or suddenly pivot into a new career.

Finally, younger people have higher scores on the HDS on average. As people age, their derailers tend to become somewhat more moderate; their derailers become tempered by experience. On average, most working adults tend to have two or three high scores across the 11 scales.

How the Entrepreneurial Economy Impacts Organizations

The pandemic made many organizations realize the need for flexibility and adaptability. The convergence of the growing entrepreneurial economy and the rise in mental health issues have also challenged organizations to rethink what the workplace looks like.

“The fact that these two things are crashing together—the changes brought about by technology and the pandemic with the trauma associated with it—it’s making organizations rethink the way that they are going to conduct business,” Peter said.

Changes in employee attitudes have also affected organizations. “It’s given us time to think about what work is, what work should be, and how we want to work,” Peter said. As early-career employees explore their values and assert their expectations for well-being, organizations are showing more concern with investment in psychological resources. Peter’s university, for example, announced it would provide a mental health therapist as a dedicated resource for business school faculty, staff, and students. This emphasis on individual needs and preferences as a consideration in recruitment and retention is likely to continue.

The Wild West

Peter used the metaphor of the Wild West to describe the emerging entrepreneurial economy.He suggested that dark personality traits will continue to attract young people to nontraditional workplaces. “This new dynamic, this adaptable, open, unregulated, high-autonomy, high-discretion workplace, is going to attract people with dark traits,” he said.

People with certain dark traits might believe they are better suited to roles such as social media influencer or settings that allow them to work anywhere and anytime. However, their dark-side behaviors could still affect their performance at work. “Whether they’re going to be more successful in an unregulated environment? They might be, or they might not,” Peter said.