Whitman School of Management at Syracuse University
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The Nature of Entrepreneurship in the Informal Sector: Evidence from England
Vol. Volume 12, Number 2 June/2007

Colin C. Williams

Mirroring the representation of informal workers in a third world context as displaying entrepreneurial qualities, recent years have witnessed the emergence of a similar view of the informal sector in western nations as a hidden enterprise culture. Until now, however, few attempts have been made to analyze the nature and motives of informal entrepreneurs in western economies. Instead, it has been widely assumed that those engaged in entrepreneurship in the informal sector are those marginalized from the formal economy and driven out of necessity into this endeavor as a last resort. The aim of this paper is to evaluate critically this “marginalization thesis.” Reporting the findings of face-to-face structured interviews with 130 informal entrepreneurs in England, the conventional representation of these entrepreneurs as necessity-driven, as well as an emergent depiction of them as opportunity-driven, is transcended. Instead, a richer and more textured understanding of informal entrepreneurship is developed that replaces such either/or thinking by a both/and approach that depicts how the majority are concurrently both necessity- and opportunity-driven. The paper then concludes by exploring the public policy implications of this re-reading of the nature of informal entrepreneurship in western economies.