Tackling the Hidden Enterprise Culture: Government Policies to Support the Formalization of Informal Entrepreneurship
Williams, C.C. and Nadin, S. (2012) “Tackling the Hidden Enterprise Culture: Government Policies to Support the Formalization of Informal Entrepreneurship”, Entrepreneurship and Regional Development, Vol. 24, No. 9-10, pp. 895–915
23 Pages Posted: 6 Jul 2013
Date Written: 2012
It is now recognized that many entrepreneurs operate wholly or partially in the informal economy. Harnessing this hidden enterprise culture by facilitating its formalization is therefore a potentially effective and innovative means of promoting economic development and growth. To start evaluating how this might be achieved, the aim of this paper is to understand entrepreneurs’ motives for operating in the informal economy so as to identify the public policy interventions required to facilitate the formalization of this hidden enterprise culture. Reporting a survey of 51 nascent entrepreneurs in North Nottinghamshire, of which 43 were operating in the informal economy, the finding is that entrepreneurs’ rationales for working informally differ according to both whether they operate wholly in the informal economy or have registered enterprises but trade partially off-the-books, as well as whether they view themselves as on a journey towards formalization or not. Different policy measures are therefore required to tackle each type of informal entrepreneurship. The outcome is a tentative call for a more nuanced and bespoke policy approach for tackling the different kinds of informal entrepreneurship that comprise the hidden enterprise culture.
Keywords: entrepreneurship, enterprise culture, tax evasion, tax compliance, informal economy, informal entrepreneurship, shadow economy, underground economy
JEL Classification: H26, H31, O17
Suggested Citation: Suggested Citation