Necessity Entrepreneurship Research Articles

How Founder Human Capital and Founding Conditions Shape New Firm Performance: A Study of Necessity Entrepreneurship during Times of Economic Crisis

How Founder Human Capital and Founding Conditions Shape New Firm Performance: A Study of Necessity Entrepreneurship during Times of Economic Crisis

Necessity Entrepreneurs’ and Stakeholders’ Strategies: Bridging Business Survival in the Hairdressing Salon Industry

Entrepreneurs specialize in increasing productivity and thus, contribute to the country's development and economic growth. The focus of the study is to investigate the extent to which necessity entrepreneurs’ and stakeholders’ strategies can enable the survival of small services and businesses such as hair salons. The argument is that hair salons that are created out of necessity may not be able to survive turbulent economic times. The paper argues that survival strategies may assist entrepreneurs to survive and grow in business. A positivist approach was employed and a sample of 144 was randomly recruited from hair salon business owners. The structured questionnaire was analyzed, yielding descriptive and inferential analyses with means, percentages, variances, correlation coefficients, regression analysis, and the Normal Q-Q plot used to analyze and explain the variables. The findings show a significant relationship between necessity entrepreneurship and business survival. This largely explains that they work assiduously for the growth of their enterprise. Necessity entrepreneurs influence economic development, and entrepreneurs create new businesses by helping in intensifying competition which assists in the growth of the business. Stakeholders influence the rate of necessity entrepreneurs’ survival. It is, therefore, concluded that hair salons build active participation with their stakeholders (customers, employers, community, and environment). Stakeholders are more willing to work with a business when they believe it is acting in ways consistent with its values. 
 
 Received: 10 April 2023 / Accepted: 7 September 2023 / Published: 5 November 2023

Necessity Entrepreneurs: Drivers and Characteristics

On 11th March, 2020, World Health Organisation (WHO) declared COVID-19, a pandemic. Malaysia Government implemented ‘Movement Control Order’ or full lockdown on 18th March, 2020 causing unemployment to reach to 4.55% in 2020 and reached 5.3% in May 2020 - indicating the highest rate, for the past 20 years as reported by Department of Statistics Malaysia (DOSM). On the 1st April 2022, Malaysia transitioned to an endemic phase, leading to a gradual increase of its economic activities, especially opening up of more food and beverage services (F&B) businesses. This study examined the factors which are drivers and characteristics, which lead to necessity entrepreneurs (NE) preferably choose F&B services businesses. The two research questions are ‘What are the drivers of NE who are involved in the F&B services businesses?’ and ‘What are the entrepreneurial characteristics of NE who are involved in the F&B services businesses?’ Literature reviews were carried out on entrepreneurship, NE (Serviere’s Venture Creation Model for NE, 2010) and entrepreneurial characteristics (Ernst & Young’s Entrepreneur Model, 2011). The research design is an exploratory case study qualitative research with an in-depth semi-structured interview session, comprising of a pilot study, and a main study of 21 F&B services in Ipoh city. Thematic analysis was carried out with the ‘ATLAS.ti 23’ software. Findings suggested four novel drivers of NE, viz. family cohesion; inherited culinary skills; pursuit of culinary ambition; and unmotivated in job. Furthermore, eight novel characteristics of NE comprising perseverance; patience; money management; wellness; kinship; creativity; communication network; and self-discipline.

Opportunity or necessity entrepreneurship? A study based on the national system of entrepreneurship

This study investigates synergies between individual and national variables that promote opportunity and necessity entrepreneurship with a framework based on the national system of entrepreneurship. A qualitative comparative analysis of fuzzy sets of 39 country cases shows that institutional or individual cognitive elements are not necessary for high-opportunity or high-necessity entrepreneurship but that enhancing entrepreneurs’ ability perceptions play a universal role. The study's findings reveal optimal pathways that combine the institutional environment and individual perceptions to promote the synergistic development of opportunity and necessity entrepreneurship and reduce differences in entrepreneurial activities between countries.

Entrepreneurship in and around academia: evidence from Russia

PurposeThis paper deals with types and actors of entrepreneurship in and around academia in Russia, as well as with institutional settings of the entrepreneurial activity of academic faculty.Design/methodology/approachThis paper is based on a series of semi-structured interviews using the purposive snowball method (2022–2023). The respondents are either engaged in different kinds of entrepreneurship in and outside universities in Moscow and Nizhny Novgorod or experts in entrepreneurship in and around academia.FindingsA double mixed embeddedness driven approach to the typology of diverse forms of entrepreneurship in and around academia are shown in the context of the temporality as well as of the micro-, meso- and macro-level institutions, such as the low demand in innovations in the economy; uncertainty of property rights; limited interest of university administration in academic entrepreneurs or its focus solely on students' entrepreneurship; and necessity entrepreneurship motives on the micro-level. The research limitations of the study are the small number of observations and the localisation of the panel in only one country.Research limitations/implicationsThe research limitations of the study are the small number of observations and the localisation of the panel in only one country.Practical implicationsThe “Special Military Operation” and its consequences would hinder bottom-up academic entrepreneurship in the country, while pushing universities to launch R&D with the big industry, and forcing many faculties to non-academic entrepreneurship.Originality/valueFor the first time, the broad variety of entrepreneurial activities of academic staff including the specifics of non-classical forms of entrepreneurship in and around academia and their embeddedness into different contexts are discussed.

Towards the Emergence and Valorization of Necessity Entrepreneurship: The Case of Women in the Republic of Congo

Towards the Emergence and Valorization of Necessity Entrepreneurship: The Case of Women in the Republic of Congo

Moving from Generation to Generation: Latin American Family Business is a Tamara-Land

This article indagates the story of three generations of Latino entrepreneurs –grandmother, mother, and son—with family businesses that flank both sides of the U.S.-Mexico border. Across generations the "Tamara-Land" effect exists. To disambiguate, the narratives of these family businesses changed across generations, morphing from stories of effectuation to ones of causation. The grandmother living in Mexico embodied effectuation by "falling into" her entrepreneurial opportunities. Her story is one of necessity entrepreneurship because other opportunities were unavailable to her. The daughter in the story exhibits a mix of planning and improvisation. Although the daughter had a latent desire to pursue entrepreneurship, it became a viable option to earn a livelihood that reflected her intellectual interests. In the final series of vignettes, we find the grandson pursuing entrepreneurship in order to achieve his dream. Across generations, the entrepreneurs shift from characters in a grand narrative to becoming authors of their own story. This paper will be of interest to researchers of family business, particularly in Latin American and Latino Entrepreneurship, students of entrepreneurship, and scholars of storytelling.

Necessity entrepreneurship: an integrative review and research agenda

ABSTRACT Research on necessity entrepreneurship has increased in the last decade, with studies investigating the phenomenon in different contexts and applying numerous theories. Such diverse research activity has affected the use of the term necessity entrepreneurship and its applicability and, in turn, limited the overall understanding of the concept. Moreover, because little effort has been made to synthesize the body of literature on necessity entrepreneurship, no organized framework exists that allows researchers to theorize and contextualize the complexity of the concept. To fill that gap, we conducted an integrative, systematic literature review of 252 articles published on the topic between 1986 and 2022. In inductive qualitative analysis, we identified applied theories, antecedents, and manifestations exhibited in the field, along with outcomes and critical voices in the literature. We aggregated our findings into a framework and here provide a comprehensive, organized overview of the literature on necessity entrepreneurship. In doing so, we contribute to a multilevel perspective on necessity entrepreneurship and indicate numerous paths for future research.

Performance differentials of necessity and opportunity entrepreneurs: through the lens of motivation to learn and female entrepreneurial competencies

PurposeWomen entrepreneurs are often categorized and assessed for various outcomes based on their start-up motivations. It is generally assumed that entrepreneurs with opportunity motivation have better performance when compared to necessity entrepreneurs. This study aims to test these suppositions through the lens of the entrepreneur’s motivation to learn (MTL) and level of female entrepreneurial competencies (FECs), namely, business and management, entrepreneurial, human relations (HR) and personal.Design/methodology/approachData collected from 344 respondents through a survey questionnaire was analyzed using the structural equation modelling – partial least squares method using SmartPLS 4.FindingsThe findings highlight the need of recognizing the differentials between necessity and opportunity entrepreneurs as they were found to influence performance and learning outcomes. Opportunity entrepreneurship was found to significantly impact both MTL and the FECs. The authors also observed that business and management skills along with HR competencies played a greater role in the firm performance.Practical implicationsThe findings demonstrate a case for specialized, tailor-made policy approaches rather than the “one size fits all” approach as evident in many government programs. As necessity entrepreneurs form a vital part of the Indian entrepreneurial ecosystem, apart from mentoring, need-based competency development programs may be looked at. Opportunity entrepreneurs may need support and encouragement through advanced skilling and uncomplicated funding options.Originality/valueTo the best of the authors’ knowledge, empirical studies related to women-owned micro, small and medium enterprises in India establishing the relationship between start-up motivation and business performance are scarce. Even in the global context, this is one of the initial studies to examine the relationship through the lens of MTL and competencies.

Social Inclusion through Necessity Entrepreneurship: An Ethnographic Account from Kutupalong

Social Inclusion through Necessity Entrepreneurship: An Ethnographic Account from Kutupalong

Necessity Entrepreneurship

Necessity Entrepreneurship

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

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.

The Pursuit of Entrepreneurship by Youths in the Caribbean

Youth entrepreneurship is being promoted by policymakers in developing countries as a key strategy to combat high youth unemployment, reduce individual poverty, engender social mobility, and facilitate youth inclusion in the formal economy. International, regional, national, and other stakeholders have promulgated policies and programs to lend support for this strategy. This article utilized data derived from a survey of youth entrepreneurs conducted in the town of Linden, Guyana, together with agency interviews from the same community and from national agencies involved in youth entrepreneurship to fulfill its objectives. The survey and agency interviews are part of a broader mixed method study conducted by the authors aimed at understanding the factors impacting youth entrepreneurship in Guyana, a developing country in the Latin American and Caribbean (LAC) region. The importance of the survey to this study is to discern what youth entrepreneurs themselves say about their businesses and about themselves as entrepreneurs. This paper adds to the sparse literature on this phenomenon. The intent of the authors of this study is multi-faceted. This paper seeks to provide an understanding of who these young entrepreneurs are, the factors that motivate them to start their own businesses and their preparedness for such ventures. We explore and explain the support provided to youth entrepreneurs, their access to and perceptions of such support. Thirdly, we provide an understanding of how youth entrepreneurs view the successes and positives of their businesses and their intimate feelings and fears about their ventures. This paper challenges the prevailing “necessity entrepreneurship” framing of youth entrepreneurship.

The impact of growth mindset training on entrepreneurial action among necessity entrepreneurs: Evidence from a randomized control trial

AbstractResearch SummaryAlthough entrepreneurship training programs are designed to help necessity entrepreneurs acquire skills and capabilities to take entrepreneurial action, participants in these programs often fail to do so. In partnership with a local government agency, we conducted a randomized field experiment involving 165 entrepreneurs in rural Tanzania where in addition to providing technical‐skills training, approximately half of the participants also received “growth mindset” psychological training. Those who received the growth mindset training displayed more entrepreneurial action in their business than those in the control group. Importantly, higher levels of entrepreneurial self‐efficacy mediated the positive impact on entrepreneurial action displayed by participants who received the growth mindset training. We discuss how complementing traditional technical‐based training with growth mindset training can improve the efficacy of entrepreneurship training programs.Managerial SummaryEntrepreneurship training programs often fall short in translating knowledge into action. To address this issue, we conducted an experiment with 165 entrepreneurs in rural Tanzania. All participants received technical‐skills training, but half were also exposed to “growth mindset” training. Those who received the growth mindset training displayed greater initiative in business growth. The newfound confidence and grit they gained empowered them to apply learned principles effectively, ultimately enhancing the effectiveness of entrepreneurship training programs.

The Motivational Factors of Necessity Entrepreneurship in Algeria

Abstract This paper centres on the phenomenon of entrepreneurship emerging from necessity. Through the adoption of a dual methodological approach, the objective is to identify the motivating factors that determine the establishment of businesses driven by necessity in Algeria. The quantitative approach utilizes principal component analysis on a sample of 194 entrepreneurs, while the qualitative approach involves conducting semi-directive interviews with seven entrepreneurs from disadvantaged backgrounds. By employing these methods, the study aims to uncover the primary variables that influence the occurrence of necessity entrepreneurship in Algeria. The findings of this research shed light on the crucial internal and external factors that contribute to necessity entrepreneurship. Remarkably, these results challenge the prevailing dichotomous framework often utilized to differentiate between necessity entrepreneurship and opportunity entrepreneurship in research studies.

Jordanian Women Entrepreneurs and the Role of Social Media: The Road to Empowerment

Objectives: This study aims to investigate the factors that have influenced women entrepreneurs to use social media to run their businesses. Additionally, it explores how social media has influenced and affected women entrepreneurs' businesses and examines the social changes in their lives instigated by using social media for business purposes.
 Methods: The study adopts a qualitative-inductive approach and utilizes semi-structured interviews with 30 women entrepreneurs from various industries in three main cities in Jordan.
 Results: The paper highlights that social media platforms have provided women with varying degrees of empowerment. The degree of empowerment differs among women and is associated with their motivations for entrepreneurship. Women who started their businesses with opportunity motivations and used social media as their primary platform are found to be more empowered compared to women who engaged in necessity entrepreneurship. The research findings confirm that female entrepreneurs have experienced positive effects by using social media as their primary business platform. Embracing social media has presented new marketing opportunities, leading to significant economic gains.
 Conclusions: This study supports the notion that the status of women's entrepreneurship in Jordan is rapidly increasing, particularly due to the presence of social media platforms. Women adopt different titles and descriptions to gain control over their lives, often referred to as empowerment, which is achieved through access to financial resources, education, and confidence. This empowerment subsequently manifests as entrepreneurship.

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Immigration and Entrepreneurship: The Role of Enclaves

Immigration has proven to be a major force driving entrepreneurial dynamics. In this paper I investigate how the geographical distribution of immigrants within a given country, and in particular the presence of “enclaves,” affects the relationship between immigration and entrepreneurship. I examine the impact of Polish immigration to Great Britain following the unprecedented migration wave caused by the European Union enlargement in 2004. I address omitted variable concerns by using information on the location of historical Polish military settlements and the occupational composition and growth of Polish immigration in Ireland to construct instruments for enclaves and location choices of immigrants. The econometric results indicate, on the one hand, that immigration does increase immigrant entrepreneurship, but not in existing immigrant enclaves. On the other hand, immigrant entrepreneurs outside enclaves tend to achieve worse growth outcomes than those in enclaves. Further analyses provide an explanation to these findings due to blocked labor markets and to the higher prevalence of “necessity entrepreneurship” outside of enclaves. These results offer new insights to understand the influence of geography on entrepreneurship in the presence of immigration. This paper was accepted by Toby Stuart, entrepreneurship and innovation. Supplemental Material: The data files and online appendix are available at https://doi.org/10.1287/mnsc.2023.4776 .

The impact of policy uncertainty on entrepreneurial activity: a cross-country analysis

ABSTRACT This study examines the impact of Economic Policy Uncertainty (EPU), capturing the extent to which a national economy is characterized by uncertainty about future tax codes, monetary policy, and government spending on the rate of entrepreneurial activity, including necessity entrepreneurship and opportunity entrepreneurship. Applying the system Generalized Method of Moments methodology on panel data covering 26 countries over 19 years, we show that higher EPU is associated with increased rates of necessity entrepreneurship. The results are significant even after controlling for other macro-level indicators and alternate EPU specifications. The results also suggest a lower rate of necessity entrepreneurship in developed economies, which reflects the role of safety nets as a shield against sudden loss of livelihood. We find no significant relationship between EPU and opportunity entrepreneurship, suggesting that opportunity entrepreneurship is governed by a more complex combination of factors. Our study contributes to the literature on determinants of entrepreneurship and offers important recommendations for entrepreneurs and policymakers.

Did the unemployment benefits extension between 2009–2013 deter entrepreneurship in the US? Some evidence and a model of unemployment benefits and entrepreneurship

The 2007–2008 financial crisis severely dampened the American entrepreneurial sector, and the rate of business formation remained low until 2014. This study empirically assesses whether the extensions of unemployment benefits (EUB) contributed to the delay in recovery in entrepreneurship. We then introduce a general equilibrium occupational choice model of unemployment benefits and entrepreneurship and use sharp discontinuity and variations across states in the maximum duration of benefits at the end of 2013 to identify the negative impact of EUB on startups. Eliminating the EUB increased entrepreneurship by 1.4–1.78 percentage points in 2014. Regarding the model, moderate increases in unemployment benefits primarily affect entrepreneurship through the extensive margin by deterring low-ability and necessity entrepreneurs while having little impact on decisions for high-ability agents; however, overly generous unemployment benefits can negatively impact entrepreneurship, the labor market and the overall economy.