Entrepreneurship as a pathway into and out of poverty: a configuration perspective

ABSTRACT

Entrepreneurship is widely argued to be an important solution to poverty. While there is a growing volume of work on poverty and entrepreneurial action in developing nations, empirical work in developed countries is more scarce. Drawing on the entrepreneurial intentions and motivations literature together with personal values theory, we explore changes in the economic status and job status of 83 individuals from low-income contexts in Spain. Based on a series of multiple correspondence analysis and cluster analyses of data collected in two periods in time, three profiles of entrepreneurial intentions, motivations, and personal values associated with pathways into and out of poverty through entrepreneurship are identified. Implications are drawn for theory, practice and public policy.

KEYWORDS:

• entrepreneurship
• poverty
• pathways
• personal financial outcomes

Disclosure statement

No potential conflict of interest was reported by the author(s).

Notes

1. Definitions of the 10 basic personal values (Schwartz 2010): Power: Social status and prestige, dominance or control over people and resources; Achievement: Personal success through demonstrating competence according to social standards; Hedonism: Pleasure and sensuous gratification for oneself; Stimulation: Excitement, novelty, and challenge in life; Self-direction: Independent thought and action-choosing, creating, exploring; Universalism: Understanding, appreciation, tolerance and protection for the welfare of all people and for nature; Benevolence: Preservation and enhancement of the welfare of people with whom one is in frequent personal contact; Conformity: Restraint of actions, inclinations, and impulses likely to upset or harm others and violate social expectations or norms; Tradition: Respect, commitment, and acceptance of the customs and ideas that traditional culture or religion provides; Security: Safety, harmony, and stability of society, of relationships, and of self.

2. The main purpose of the ELITE research project was to provide a deep insight into the different stages of the entrepreneurial process, evolving from the potential entrepreneur, to the nascent entrepreneur, and to the new entrepreneur. The overall objectives of the project were to: a) identify the key factors influencing the movement from intention (potential entrepreneur) to action (nascent entrepreneur); and b) identify the key factors that determine the success (or lack of it) in the movement from nascent to new entrepreneur. The project aimed identify personal factors and environmental variables that cause certain entrepreneurs to continue forward in the entrepreneurial process while others stagnate or drop it. Thus, given the nature of the sampling process and the purpose of the larger research project, not all individuals sampled were (or became) entrepreneurs or high-impact entrepreneurs. For the purposes of our study, we selected those 83 individuals who self-identified as low-income.

3. In 2010, Extremadura had the highest at-risk-of-poverty rate (35.7%) and in 2019, Cuidad de Ceuta showed the highest percentage (40.6%). Overall, Extremadura, Ciudad de Ceuta, Región de Murcia, Canarias and Andalucía report the highest percentage of at-risk-of-poverty rate in Spain (Eurostat 2021a).

4. The in-work at-risk-of-poverty rate, defined as individuals aged between 18 and 64 who are classified as employed according to their most frequent activity status and are at risk of poverty in Spain in 2010 was 10.8% and 12.8% in 2019, and both are higher than the average for the European Union countries (AverageEU2010 = 8.3%; Average EU2019 = 9.0) (Eurostat 2021c).

5. The at-risk-of-poverty rate in Spain in 2010 was 20.7% and was also 20.7% in 2019, which is higher than the average for the European Union (Average EU 2010 = 16.5%; Average EU 2019 = 16.8%) (Eurostat 2021a).

Additional information

Funding

This work was supported by the Spanish National R + D + I Plan, Ministry of Economics and Competitiveness [Ref.: ECO2016-75655-P].