Overcoming the liability of poorness: disadvantage, fragility, and the poverty entrepreneur.

Abstract

All entrepreneurs must overcome the liabilities of newness and smallness as they attempt to launch and grow a new venture. However, those in poverty face an even greater challenge due to a concept we introduce, known as the liability of poorness, which centers on literacy gaps, a scarcity mindset, intense non-business pressures, and the lack of a safety net. Each of these components of the liability of poorness contributes to the disadvantage and fragility of the enterprises confronting the poor. Implications of this fragility for venture dynamics as well as how some poverty entrepreneurs overcome this liability are explored. Research priorities are discussed for ongoing work on the liability of poorness.