Abstract
Approximately 1.7 billion people in Asia live in poverty today. To date, efforts to address poverty in Asia have largely focused on subsistence entrepreneurship rather than on creating ventures that empower them to break out of poverty. That is, the mechanisms that have been used, such as microlending, generally lead entrepreneurs to create businesses providing basic life essentials rather than helping them build businesses that generate capital to improve the entrepreneur’s standard of living. This article initially reviews what we know about entrepreneurship as a solution to poverty in Asia. We then examine what we know about other major tools to address poverty in Asia. Next, we propose a research agenda on poverty in Asia. Finally, we introduce the articles in this Special Issue of the Asia Pacific Journal of Management, “Asia & Poverty: Closing the Great Divide through Entrepreneurship & Innovation,” on new approaches to entrepreneurship to help address the key issue of the alleviation of poverty.
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Notes
These figures from the most recent comprehensive World Bank survey are from 2008.
There are also comprehensive lines of research in both entrepreneurship and economics that examine how venture capital and private equity can strengthen a country’s entrepreneurial sector (see Ahlstrom, Bruton, & Chan, 2000; Brown, Haltiwanger, & Lane, 2006; Bruton & Ahlstrom, 2003; Bruton, Ahlstrom, & Singh, 2002; Bruton, Ahlstrom, & Yeh, 2004; Cumming & Suret, 2011; Hargadon & Kenney, 2012; Kenney, 2011; Lerner, 2009). This Special Issue is more directly focused on entrepreneurship.
The work of Joseph Schumpeter is a notable exception, though Schumpeter wrote more about entrepreneurs in his early work and focused more on larger firms and their research and development in the interwar period and the Second World War (McCraw, 2010).
It should be noted that poverty defined by income is used here since it is more easily quantified and can clearly be addressed. There are several ways that poverty is defined and measured, including different levels of income or consumption. See Chen and Ravallion (2010) for a discussion.
This is consistent with research in technology assessment and evaluation. Assessment routines are crucial to what technologies and techniques are selected, funded, and promoted (Garud & Ahlstrom, 1997b).
While poverty is difficult to define precisely, it should be recognized that concepts such as base of the pyramid (BoP) are much harder to define. The result is that BOP is conceptually appealing but has largely gone unoperationalized for the purposes of empirical research (Ahlstrom, Bruton, & Zhao, 2013; Economist, 2010).
Some marketing scholars use the term subsistence entrepreneurship to describe entrepreneurship in settings of poverty (i.e., Viswanathan et al., 2014). While these authors imply there is little opportunity for sustained capital growth they do not specifically limits for the future as they use the term.
We limit this search also to academic journals and articles published since 2000. Harvard Business Review is not included here as it is generally not considered to be a peer-reviewed academic journal.
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Acknowledgments
The work in this article was substantially supported by a grant from the RGC Research Grant Direct Allocation Scheme (Project no. 2070465, 2011-2012) of The Chinese University of Hong Kong, Hong Kong Special Administrative Region. The authors would also like to thank Marc Ahlstrom of Burlington County College for his editorial assistance.
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Bruton, G.D., Ahlstrom, D. & Si, S. Entrepreneurship, poverty, and Asia: Moving beyond subsistence entrepreneurship. Asia Pac J Manag 32, 1–22 (2015). https://doi.org/10.1007/s10490-014-9404-x
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DOI: https://doi.org/10.1007/s10490-014-9404-x