The motives of off-the-books entrepreneurs: necessity- or opportunity-driven?

Article

Abstract

In recent years, it has become common to represent entrepreneurs as either necessity- or opportunity-driven. Drawing upon face-to-face interviews in England with 70 entrepreneurs trading wholly or partially off-the-books, this paper evaluates critically this dichotomous representation. The finding is that squeezing the motives of off-the-books entrepreneurs into one side or the other of this dichotomy not only over-simplifies their rationales since both necessity and opportunity motives are often involved but also obfuscates how their motives change over time. The outcome is a call to replace this either/or depiction with a richer and more nuanced both/and understanding of off-the-books entrepreneurs that recognises their diverse and dynamic motives.

Keywords

Necessity entrepreneurs Opportunity entrepreneurs Informal economy Shadow economy Enterprise culture England 

References

  1. Aidis, R., Welter, F., Smallbone, D., & Isakova, N. (2006). Female entrepreneurship in transition e: the case of Lithuania and Ukraine. Feminist Economics, 13(2), 157–183.CrossRefGoogle Scholar
  2. Baty, G. (1990). Entrepreneurship in the nineties. London: Prentice Hall.Google Scholar
  3. Blanchflower, D. G., & Meyer, B. D. (1991). Longitudinal analysis of young entrepreneurs in Australia and the United States. Cambridge, MA: National Bureau of Economic Research Working Paper no. 3746.Google Scholar
  4. Bögenhold, D. (1987). De Gründerboom: Realität unde mythos de neuen Selbständigkeit. Frankfurt: Campus.Google Scholar
  5. Bolton, B., & Thompson, J. (2000). Entrepreneurs: Talent, temperament, technique. Oxford: Butterworth-Heinemann.Google Scholar
  6. Brockhaus, R. H., & Horowitz, P. S. (1986). The psychology of the entrepreneur. Entrepreneurship Theory and Practice, 23, 29–45.Google Scholar
  7. Browne, K. E. (2004). Creole economics: Caribbean cunning under the French flag. Austin: University of Texas.Google Scholar
  8. Burns, P. (2001). Entrepreneurship and small business. Basingstoke: Palgrave.Google Scholar
  9. Carr, P. (2002). Enterprise culture: Understanding a misunderstood concept. In G. Beaver (Ed.), Small business, entrepreneurship and enterprise development. London: Prentice Hall.Google Scholar
  10. Castells, M., & Portes, A. (1989). World underneath: The origins, dynamics and effects of the informal economy. In A. Portes, M. Castells, & L. A. Benton (Eds.), The informal economy: Studies in advanced and less developing countries. Baltimore: John Hopkins University Press.Google Scholar
  11. Chell, E., Haworth, J., & Brearly, S. (1991). The entrepreneurial personality: Concepts, cases and categories. London: Routledge.Google Scholar
  12. Cole, A. H. (1969). Definition of entrepreneurship. In J. Komives (Ed.), Karl A. Bostrum Seminar in the study of enterprise. Milwaukee: Centre for Venture Management.Google Scholar
  13. Cooper, A. C. (1981). Strategic management: new ventures and small businesses. Long Range Planning, 14, 39–45.CrossRefGoogle Scholar
  14. Cross, J. C. (1997). Entrepreneurship and exploitation: measuring independence and dependence in the informal economy. International Journal of Sociology and Social Policy, 17, 37–63.CrossRefGoogle Scholar
  15. Cross, J. C. (2000). Street vendors, modernity and postmodernity: conflict and compromise in the global economy. International Journal of Sociology and Social Policy, 20, 29–51.CrossRefGoogle Scholar
  16. De Soto, H. (1989). The other path: The economic answer to terrorism. London: Harper and Row.Google Scholar
  17. De Soto, H. (2001). The mystery of capital: Why capitalism triumphs in the West and fails everywhere else. London: Black Swan.Google Scholar
  18. European Commission (1998). Communication of the Commission on Undeclared Work. Retrieved from http://europa.eu.int/comm/employment_social/empl_esf/docs/com98-0219_en.pdf.
  19. Evans, M., Syrett, S., & Williams, C. C. (2006). The informal economy and deprived neighbourhoods: A systematic review. London: Office of the Deputy Prime Minister.Google Scholar
  20. Fortin, B., Garneau, G., Lacroix, G., Lemieux, T., & Montmarquette, C. (1996). L’Economie Souterraine au Quebec: Mythes et realites. Laval: Presses de l’Universite Laval.Google Scholar
  21. Franks, J. R. (1994). Macroeconomic policy and the informal economy. In C. A. Rakowski (Ed.), Contrapunto: The informal sector debate in Latin America. New York: State University of New York Press.Google Scholar
  22. Gallin, D. (2001). Propositions on trade unions and informal employment in time of globalization. Antipode, 19, 531–49.CrossRefGoogle Scholar
  23. Gerxhani, K. (2004). The informal sector in developed and less developed countries: a literature survey. Public Choice, 120, 267–300.CrossRefGoogle Scholar
  24. Harding, R. (2003). Global entrepreneurship monitor business start-up activity. London: London Business School.Google Scholar
  25. Harding, R., Brooksbank, D., Hart, M., Jones-Evans, D., Levie, J., O’Reilly, J., et al. (2006). Global entrepreneurship monitor United Kingdom 2005. London: London Business School, Global Entrepreneurship Monitor.Google Scholar
  26. Hull, D., Bosley, J. J., & Udell, G. G. (1980). Renewing the hunt for the heffalump: identifying potential entrepreneurs by personality characteristics. Journal of Small Business, 18, 11–18.Google Scholar
  27. International Labour Office (2002). Decent work and the informal economy. International Labour Office: Geneva.Google Scholar
  28. Jensen, L., Cornwell, G. T., & Findeis, J. L. (1995). Informal work in nonmetropolitan Pennsylvania. Rural Sociology, 60, 91–107.Google Scholar
  29. Jones, T., Ram, M., & Edwards, P. (2004). Illegal immigrants and the informal economy: worker and employer experiences in the Asian underground economy. International Journal of Economic Development, 6, 92–106.Google Scholar
  30. Kanter, R. M. (1983). The change masters. New York: Simon and Schuster.Google Scholar
  31. Katungi, D., Neale, E., & Barbour, A. (2006). People in low-paid informal work: Need not greed. York: Joseph Rowntree Foundation.Google Scholar
  32. Kitchen, R., & Tate, N. (2001). Conducting research in human geography: Theory, practice and methodology. London: Prentice Hall.Google Scholar
  33. Lagos, R. A. (1995). Formalising the informal sector: barriers and costs. Development and Change, 26, 110–131.CrossRefGoogle Scholar
  34. Leonard, M. (1994). Informal economic activity in belfast. Aldershot: Avebury.Google Scholar
  35. Lozano, B. (1989). The invisible workforce: Transforming American business with outside and home-based workers. New York: The Free Press.Google Scholar
  36. MacDonald, R. (1994). Fiddly jobs, undeclared working and the something for nothing society. Work, Employment and Society, 8, 507–530.Google Scholar
  37. Maldonado, C. (1995). The informal sector: legalization or laissez-faire? International Labour Review, 134, 705–728.Google Scholar
  38. Maritz, A. (2004). New Zealand necessity entrepreneurs. International Journal of Entrepreneurship and Small Business, 1, 255–264.CrossRefGoogle Scholar
  39. McClelland, D. (1961). The achieving society. Princeton, NJ: Van Nostrand.Google Scholar
  40. Mingione, E. (1991). Fragmented societies: A sociology of economic life beyond the market paradigm. Oxford: Blackwell.Google Scholar
  41. Minniti, M., Bygrave, W., & Autio, E. (2006). Global entrepreneurship monitor: 2005 executive report. London: London Business School.Google Scholar
  42. ODPM (2000). Index of multiple deprivation. London: Office of the Deputy Prime Minister.Google Scholar
  43. Pahl, R. E. (1984). Divisions of labour. Oxford: Blackwell.Google Scholar
  44. Perunović, Z. (2005). Introducing opportunity-based entrepreneurship in a transition economy. Michigan: Policy Brief 39, The William Davidson Institute, University of Michigan.Google Scholar
  45. Portes, A., & Walton, J. (1981). Labor, class and the international system. New York: Academic.Google Scholar
  46. Raijman, R. (2001). Mexican immigrants and informal self-employment in Chicago. Human Organization, 60, 47–55.Google Scholar
  47. Rakowski, C. (1994). The informal sector debate, part II: 1984–1993. In C. A. Rakowski (Ed.), Contrapunto: The informal sector debate in Latin America. New York: State University of New York Press.Google Scholar
  48. Ram, M., Edwards, P., & Jones, T. (2002a). Employers and illegal migrant workers in the clothing and restaurant sectors. London: DTI Central Unit Research.Google Scholar
  49. Ram, M., Edwards, P., Gilman, M., & Arrowsmith, J. (2001). The dynamics of informality: employment relations in small firms and the effects of regulatory change. Work, Employment and Society, 15, 845–861.CrossRefGoogle Scholar
  50. Ram, M., Gilman, M., Arrowsmith, J., & Edwards, P. (2003). Once more into the sunset? Asian clothing firms after the National Minimum Wage. Environment and Planning C: Government and Policy, 71, 238–261.Google Scholar
  51. Ram, M., Jones, T., Abbas, T., & Sanghera, B. (2002b). Ethnic minority enterprise in its urban context: south Asian restaurants in Birmingham. International Journal of Urban and Regional Research, 26, 24–40.CrossRefGoogle Scholar
  52. Renooy, P. (1990). The informal economy: Meaning, measurement and social significance. Netherlands Geographical Studies No. 115, Amsterdam.Google Scholar
  53. Renooy, P., Ivarsson, S., van der Wusten-Gritsai, O., & Meijer, R. (2004). Undeclared work in an enlarged union: An analysis of shadow work - an in-depth study of specific items. Brussels: European Commission.Google Scholar
  54. Rosanvallon, P. (1980). Le developpement de l’economie souterraine et l’avenir des societe industrielles. Le Debat, 2, 8–23.Google Scholar
  55. Rouse, M., & Dallenbach, U. (1999). Rethinking research methods for the resource-based perspective: Isolating sources of sustainable competitive advantage. Strategic Management Journal, 20(5), 487–94CrossRefGoogle Scholar
  56. Sassen, S. (1997). Informalisation in advanced market economies. Issues in Development Discussion Paper 20. Geneva: International Labour Office.Google Scholar
  57. Schumpeter, J. A. (1996). The theory of economic development. New Jersey: Transaction Publishers.Google Scholar
  58. Shaver, K. G., & Scott, L. R. (1991). Person, process, choice: The psychology of new venture creation. Entrepreneurship Theory and Practice, 16(2), 23–45Google Scholar
  59. Small Business Council (2004). Small business in the informal economy: Making the transition to the formal economy. London: Small Business Council.Google Scholar
  60. Small Business Service (2006). Annual survey of small businesses: UK 2004/05. Sheffield: Small Business Service.Google Scholar
  61. Smallbone, D., & Welter, F. (2004). Entrepreneurship in transition economies: Necessity or opportunity driven? Retrieved 9 June 2008 from www.babson.edu/entrep/fer/BABSON2003/XXV/XXV-S8/xxv-s8.htm.
  62. Snyder, K. A. (2004). Routes to the informal economy in New York’s East village: crisis, economics and identity. Sociological Perspectives, 47, 215–240.CrossRefGoogle Scholar
  63. Stebbins, R. A. (2004). Serious leisure, volunteerism and quality of life. In J. T. Haworth & A. J. Veal (Eds.), Work and leisure. London: Routledge.Google Scholar
  64. Storey, D. J., & Sykes, N. (1996). Uncertainty, innovation and management. In P. Burns, & J. Dewhurst (Eds.), Small business and entrepreneurship. London: Macmillan.Google Scholar
  65. Thomas, J. J. (1992). Informal economic activity. Hemel Hempstead: Harvester Wheatsheaf.Google Scholar
  66. Travers, A. (2002). Prospects for enterprise: An investigation into the motivations of workers in the informal economy. Evidence paper No.2. London: Community Links.Google Scholar
  67. Van Geuns, R., Mevissen, J., & Renooy, P. (1987). The spatial and sectoral diversity of the informal economy. Tijdschrift voor Economische en Sociale Geografie, 78, 389–398.CrossRefGoogle Scholar
  68. Williams, C. C. (2004). Cash-in-hand work: The underground sector and the hidden economy of favours. Basingstoke: Macmillan.Google Scholar
  69. Williams, C. C. (2005a). Small business in the informal economy: Making the transition to the formal economy - the evidence base. London: Small Business Service.Google Scholar
  70. Williams, C. C. (2005b). The undeclared sector, self-employment and public policy. International Journal of Entrepreneurial Behaviour and Research, 11, 244–257.CrossRefGoogle Scholar
  71. Williams, C. C. (2006). The hidden enterprise culture: Entrepreneurship in the underground economy. Cheltenham: Edward Elgar.Google Scholar
  72. Williams, C. C., & Windebank, J. (1998). Informal employment in the advanced economies: Implications for work and welfare. London: Routledge.Google Scholar

Copyright information

© Springer Science + Business Media, LLC 2008

Authors and Affiliations

  1. 1.Public Policy Management SchoolUniversity of SheffieldSheffieldUK

Personalised recommendations