Harnessing the hidden enterprise culture of advanced economies

Purpose - In the majority (third) world, informal employment has been long viewed as an asset to be harnessed rather than a hindrance to development. The purpose of this paper is to show how a similar perspective is starting to be embraced in advanced economies and investigates the implications for public policy of this re‐reading. Design/methodology/approach - Documents the shifts in how informal employment in western economies is conceptualised in both the academic literature and public policy. Findings - This paper reveals that the representation of informal employment as an exploitative, low‐paid sweatshop realm is being replaced with a depiction of such work as a hidden enterprise culture that needs to be harnessed. Evaluating how this might be achieved, the need for a shift in public policy away from a deterrence approach and towards an approach that combines deterrents with enabling initiatives to pull this hidden enterprise culture into the formal economy is identified. Specific enabling measures to achieve this in the context of advanced economies are then discussed. Practical implications - This paper displays how western governments can harness the hidden enterprise culture by setting out specific initiatives to enable its transfer into the formal economy. Originality/value - This paper provides one of the first attempts to re‐read informal employment as a hidden enterprise culture and to evaluate its implications for public policy.