Evaluating the Motives of Informal Entrepreneurs: Some Lessons from Ukraine
Journal of Developmental Entrepreneurship, Vol. 14, No. 1, pp. 59-71 (2009)
13 Pages Posted: 7 Jul 2013
Date Written: 2009
To understand entrepreneurs’ motivations, it has become increasingly common to distinguish between those driven by necessity (or pushed) and those driven by opportunity (or pulled) into entrepreneurship. Until now, entrepreneurs operating wholly or partially in the informal economy have been widely assumed to be necessity-driven, pushed into this enterprise as a survival strategy in the absence of alternatives. To evaluate whether this is indeed the case, this paper reports one of the first surveys of informal entrepreneurs’ motives. Reporting face-to-face interviews conducted in Ukraine during 2005/06 with 298 informal entrepreneurs, the finding is that while most identified themselves as necessity entrepreneurs when initially asked whether they were either pushed or pulled, subsequent questions reveal that in the vast majority of cases, there were not only both push and pull factors driving their original decision to start-up informal enterprises but also a clear shift amongst these entrepreneurs as their business became established away from necessity-oriented motivations and towards more opportunity-oriented motivations. The outcome is a call for a transcendence of a static either/or approach and the adoption of a dynamic both/and approach that recognizes the co-existence of necessity- and opportunity-drivers as well as the fluidity of entrepreneurs’ motivations.
Keywords: entrepreneurship, informal economy, informal sector, Ukraine, economic development, venture creation
JEL Classification: O17, H26, H31, K42
Suggested Citation: Suggested Citation