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Is Informal Sector Entrepreneurship Necessity- or Opportunity-driven? Some Lessons from Urban Brazil

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  • Colin C. Williams
  • Youssef Youssef

Abstract

The aim of this paper is to evaluate critically the widely-held assumption that entrepreneurs operating in the informal sector in developing nations are largely necessity-driven entrepreneurs, pushed into this entrepreneurial endeavour as a survival strategy in the absence of alternatives. Reporting an extensive 2003 survey conducted in Brazilian urban areas of informal sector entrepreneurs operating small businesses with less then five employees, the finding is that under half of the surveyed entrepreneurs are driven out of necessity into entrepreneurial endeavour in the informal economy. The outcome is a call to recognize the prevalence of opportunity-drivers amongst entrepreneurs operating in the informal economy and to reposition informal sector entrepreneurs more centre-stage in discussions of entrepreneurship and enterprise development.

Suggested Citation

  • Colin C. Williams & Youssef Youssef, 2014. "Is Informal Sector Entrepreneurship Necessity- or Opportunity-driven? Some Lessons from Urban Brazil," Business and Management Research, Business and Management Research, Sciedu Press, vol. 3(1), pages 41-53, March.
    • Handle: RePEc:jfr:bmr111:v:3:y:2014:i:1:p:41-53
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    References listed on IDEAS

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    1. Matthias Benz, "undated". "Entrepreneurship as a non-profit-seeking activity," IEW - Working Papers 243, Institute for Empirical Research in Economics - University of Zurich.
    2. Alex Maritz, 2004. "New Zealand necessity entrepreneurs," International Journal of Entrepreneurship and Small Business, Inderscience Enterprises Ltd, vol. 1(3/4), pages 255-264.
    3. Colin C. WILLIAMS & Mark A. LANSKY, 2013. "Informal employment in developed and developing economies: Perspectives and policy responses," International Labour Review, International Labour Organization, vol. 152(3-4), pages 355-380, December.
    4. Ricardo A. Lagos, 1995. "Formalizing the Informal Sector: Barriers and Costs," Development and Change, International Institute of Social Studies, vol. 26(1), pages 111-131, January.
    5. David Devins, 2009. "Enterprise in deprived areas: what role for start-ups?," International Journal of Entrepreneurship and Small Business, Inderscience Enterprises Ltd, vol. 8(4), pages 486-498.
    6. Guillermo E. Perry & William F. Maloney & Omar S. Arias & Pablo Fajnzylber & Andrew D. Mason & Jaime Saavedra-Chanduvi, 2007. "Informality : Exit and Exclusion," World Bank Publications - Books, The World Bank Group, number 6730, December.
    7. Ruta Aidis & Friederike Welter & David Smallbone & Nina Isakova, 2007. "Female entrepreneurship in transition economies: the case of Lithuania and Ukraine," Feminist Economics, Taylor & Francis Journals, vol. 13(2), pages 157-183.
    8. Colin C. Williams & John Round & Peter Rodgers, 2010. "Explaining the off-the-books enterprise culture of Ukraine: reluctant or willing entrepreneurship?," International Journal of Entrepreneurship and Small Business, Inderscience Enterprises Ltd, vol. 10(2), pages 165-180.
    9. John Round & Colin C. Williams & Peter Rodgers, 2008. "Corruption in the post-Soviet workplace: the experiences of recent graduates in contemporary Ukraine," Work, Employment & Society, British Sociological Association, vol. 22(1), pages 149-166, March.
    10. Colin C. Williams & Sara Nadin, 2011. "Evaluating entrepreneurs in the shadow economy: economic or social entrepreneurship?," International Journal of Management and Enterprise Development, Inderscience Enterprises Ltd, vol. 11(1), pages 20-33.
    11. repec:ilo:ilowps:317598 is not listed on IDEAS
    12. Zoltan Acs, 2006. "How Is Entrepreneurship Good for Economic Growth?," Innovations: Technology, Governance, Globalization, MIT Press, vol. 1(1), pages 97-107, March.
    13. Colin C. Williams & John Round & Peter Rodgers, 2009. "Evaluating The Motives Of Informal Entrepreneurs: Some Lessons From Ukraine," Journal of Developmental Entrepreneurship (JDE), World Scientific Publishing Co. Pte. Ltd., vol. 14(01), pages 59-71.
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    Cited by:

    1. Jonathan S. Crush & Lawrence Kazembe & Ndeyapo Nickanor, 2023. "Opportunity and Survival in the Urban Informal Food Sector of Namibia," Businesses, MDPI, vol. 3(1), pages 1-21, February.
    2. Adu-Gyamfi, Richard & Kuada, John & Asongu, Simplice, 2018. "An Integrative Framework for Entrepreneurship Research in Africa," MPRA Paper 89133, University Library of Munich, Germany.
    3. Gengzhi Huang & Desheng Xue & Bo Wang, 2020. "Integrating Theories on Informal Economies: An Examination of Causes of Urban Informal Economies in China," Sustainability, MDPI, vol. 12(7), pages 1-16, March.
    4. Ligita Gasparėnienė & Rita Remeikienė & Colin C. Williams, 2022. "Unemployment and the Informal Economy," SpringerBriefs in Economics, Springer, number 978-3-030-96687-4, June.
    5. Urmatbek Tynaliev, 2014. "Is Individual Entrepreneurship Necessity Or An Opportunity In The Kyrgyz Republic? A Panel Study," European Journal of Business and Economics, Central Bohemia University, vol. 9(2), pages 5261:9-5261, November.
    6. Fredström, Ashkan & Peltonen, Juhana & Wincent, Joakim, 2021. "A country-level institutional perspective on entrepreneurship productivity: The effects of informal economy and regulation," Journal of Business Venturing, Elsevier, vol. 36(5).
    7. Fabienne Bornard & Emmanuel Abord de Chatillon, 2016. "Il Est Toujours Temps D'Entreprendre," Post-Print halshs-01492631, HAL.
    8. Norma Juma & Joy Olabisi & Eliada Griffin-EL, 2022. "Understanding the Motivation Complexity of Grassroots Ecopreneurs at the Base of the Pyramid," Sustainability, MDPI, vol. 14(21), pages 1-21, October.

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    More about this item

    JEL classification:

    • R00 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - General - - - General
    • Z0 - Other Special Topics - - General

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