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Entrepreneurship as a solution to poverty in developed economies

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  • Morris, Michael H.
  • Santos, Susana C.
  • Neumeyer, Xaver

Abstract

While entrepreneurship in developing economies at the base of the pyramid is receiving growing attention, scholars have devoted less effort to exploring entrepreneurship as a solution to poverty in advanced economies. Yet, poverty rates have not meaningfully changed in most developed economies in 50 years, and the income gap between rich and poor continues to widen. In this article, we examine entrepreneurship as a source of empowerment for the economically disadvantaged. We explore the nature of poverty and its implications for various aspects of entrepreneurship, identify problematic aspects of the typical low-income startup, and present the SPODER conceptual framework for fostering entrepreneurial development among the poor: (S) supportive infrastructure, (P) preparation of the entrepreneur; (O) expanded opportunity horizons; (D) finding sources of differentiation; (E) a well-designed economic model; and (R) leveraging community resources. We conclude by drawing from the framework implications for those involved in breaking the cycle of poverty.

Suggested Citation

  • Morris, Michael H. & Santos, Susana C. & Neumeyer, Xaver, 2020. "Entrepreneurship as a solution to poverty in developed economies," Business Horizons, Elsevier, vol. 63(3), pages 377-390.
    • Handle: RePEc:eee:bushor:v:63:y:2020:i:3:p:377-390
    DOI: 10.1016/j.bushor.2020.01.010
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    2. Michael H. Morris, 2020. "The Liability of Poorness: Why the Playing Field is Not Level for Poverty Entrepreneurs," Poverty & Public Policy, John Wiley & Sons, vol. 12(3), pages 304-315, September.
    3. Charlene A. Dadzie, 2021. "Reimagining the Global South: Consumer welfare and public policy insights from the United States' Gulf Coast," Journal of Consumer Affairs, Wiley Blackwell, vol. 55(3), pages 1178-1199, September.
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    5. Chuan Lin & Haomiao Zhai & Yanqiu Zhao, 2022. "Industrial Poverty Alleviation, Digital Innovation and Regional Economically Sustainable Growth: Empirical Evidence Based on Local State-Owned Enterprises in China," Sustainability, MDPI, vol. 14(23), pages 1-22, November.
    6. Sohel Rana & Lily Kiminami & Shinichi Furuzawa, 2022. "Role of entrepreneurship in regional development in the haor region of Bangladesh: a trajectory equifinality model analysis of local entrepreneurs," Asia-Pacific Journal of Regional Science, Springer, vol. 6(3), pages 931-960, October.
    7. Su, Yiyi & Song, Jialin & Lu, Ying & Fan, Di & Yang, Miles, 2023. "Economic poverty, common prosperity, and underdog entrepreneurship," Journal of Business Research, Elsevier, vol. 165(C).
    8. Kalangari Rwehumbiza & Eunjung Hyun, 2024. "Unlocking the Factors That Motivate Social Entrepreneurs to Engage in Social Entrepreneurship Projects in Tanzania: A Qualitative Case Study," Administrative Sciences, MDPI, vol. 14(2), pages 1-17, February.
    9. Shahzad, Umer & Gupta, Mansi & Sharma, Gagan Deep & Rao, Amar & Chopra, Ritika, 2022. "Resolving energy poverty for social change: Research directions and agenda," Technological Forecasting and Social Change, Elsevier, vol. 181(C).
    10. Cheng, Zhiming & Tani, Massimiliano & Wang, Haining, 2021. "Energy poverty and entrepreneurship," Energy Economics, Elsevier, vol. 102(C).
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