ENTREPRENEURSHIP IN THE INFORMAL SECTOR. The Case of the Pedicab Drivers of Yogyakarta, Indonesia

Abstract

In entrepreneurship literature informal sector ventures are usually described as necessity-driven and survivalist businesses and denied the qualification of “entrepreneurial”. Recently, an emerging argument in western and transition economies has been that informal entrepreneurs are not always necessity-driven. The aim of this paper is to evaluate critically its validity to developing countries. This article analyzes the case of the pedicab drivers in Yogyakarta, a famous tourist destination in Java (Indonesia). With tourism developing into a major industry in Indonesia, pedicab driving came to constitute a sector unregulated by the government but managed by neighborhood-based self-organizations for about three decades. However, a series of disasters led to the demise of the sector. Based on anthropological fieldwork in Yogyakarta, it is demonstrated that the self-employed, low-skilled pedicab drivers of Yogyakarta first succeeded and then failed to create and exploit opportunities in the local tourism industry both in times of economic growth and collapse.