Opportunity and/or Necessity Entrepreneurship? The Impact of the Socio-Economic Characteristics of Entrepreneurs

Abstract

Entrepreneurs have often been considered as either belonging to the necessity or to the opportunity category based on their motivations when they started their organization. However, the necessity/opportunity entrepreneurship dichotomy is too limiting and the boundary between opportunity and necessity is certainly not as clear-cut as it is assumed. Moreover, the interpretation of the entrepreneurial motivation must be considered as a product of the interaction between a specific situation and a specific individual. Depending on the individual’s characteristics, the same motivation could be interpreted either as a necessity motivation or as an opportunity motivation. In this paper, based on an original dataset of 538 Belgian nascent entrepreneurs, we thus explore the impact of entrepreneurs’ background and socio-economic characteristics on the way they position themselves on the necessity–opportunity axis. We point out that individuals who become involved in an entrepreneurial process have encountered a situation of necessity and/or opportunity and that the latter can take various forms. We show the impact of the socio-economic characteristics of entrepreneurs on the alignment of their project with a necessity or opportunity entrepreneurial dynamic. The existence of sub-profiles of entrepreneurs within the necessity–opportunity typology is also highlighted. We stress, for instance, that not all jobseekers are necessity entrepreneurs and that new venture creation based on family influence may convey both a necessity and an opportunity dimension. Finally, our study reveals a new kind of entrepreneurship, i.e., hobby entrepreneurship.