Micro-Firms and the Margins of Entrepreneurship

Abstract

This paper deals with the margins of entrepreneurship at which small business owners are working almost on their own with no or very few employees, and where some work for low returns and run firms that lack stability and/or prosperous dynamics. However, even the area of ‘entrepreneurship at the margins’ is a wide field, embracing not only the broad margins of entrepreneurship but also the fluid borders between entrepreneurship and the informal sector on the one side and the labour market system on the other. New firms – even those that are ultimately very successful – may be more or less created in an experimental market and product testing phase, in which business founders are still employed or registered as unemployed before becoming self-employed. In such cases, the practical starting-point of an entrepreneurial existence is part of a fluent continuum of different activities closely connected to the entrepreneur's sphere of dependent work as an employee or job-seeking during a period of unemployment. The paper addresses this area of entrepreneurship within an integrated framework, which combines entrepreneurship analysis with labour market research and studies on social stratification and social mobility. It contributes to the debate on entrepreneurship at the margins by combining selected empirical information on the case of Germany with conceptual ideas of a labour market perspective. The integrated approach highlights some key issues and raises further questions about the field of entrepreneurship.