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Why the poor outcomes? An examination of motivations in a context of poverty entrepreneurship

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Description

Project background 

On a recent investigative visit to the UK, the United Nations (UN) reporter Professor Philip Alston found extensive evidence of poverty. According to the UN report, a fifth of the UK population live in poverty (defined in the report as when a family’s income fails to meet the threshold as set by the associated government). Further, there are predictions that UK child poverty will rise to 7% between 2015 and 2022.  

In Scottish studies investigating poverty rates amongst those in ‘employment’, Scottish Government (2016) findings indicate that rates of poverty for the self-employed are the highest for any ‘employed’ group (eg 27% for couples with dependent children). Thus, a cornerstone policy of the Scottish Government (Achieving our potential: tackling income inequality) appears not to be supporting sustainable livelihoods that contribute to inclusive economic growth for self-employed individuals. Moreover, research indicates that when pursuing self-employment rather than become self-supporting and valuable businesses, many remain in a state of poverty; indeed this is a situation which is getting worse.  
 
Previous research has indicated that motivations for business creation have a significant impact on subsequent business activity, particularly around growth and profits; thus it might be possible to suggest that there is a relationship between motivations and poverty outcomes. Motivations for entrepreneurial behaviour are informed by various aspects, these include: attitudes, social norms and perceived behavioural control. Consequently, the current rhetoric around entrepreneurial/self-employed activity as a route to financial reward, and arguably out of poverty, is a strong message that may be informing attitudes and social norms and subsequent business creation behaviour. Nevertheless, Scottish research has indicated that many self-employed business owners continue to operate in poverty. Therefore, a key question remains regarding why this is occurring; this research project examines this income ‘gap’ puzzle.  

Research overview

This research seeks to better understand the nuance of new business creation motivations in those self-employed business owners who are operating in a context of poverty. The research team conducted 42 in-depth interviews to gain rich information about lived experiences of business creation motivations and operating a business in poverty.  

Findings will inform policy development which reflects the complexity of motivations and new business creation; especially concentrated on an improved awareness of agent and context factors in the development of a business and could contribute to more valuable self-employment in the Scottish economy and beyond.  

Contributions also include those to the theoretical literature regarding the mediating factors in the formation of entrepreneurial behaviour motivations and their effect on subsequent business performance outcomes.  

Publications and outputs

  • ​​​​​​Invited talk: Professor Laura Galloway, “Poverty and enterprise: revisiting social class through the lens of intersectionality”, May 2019, ISBE Gender SIG, Newcastle University Business School  
  • Think Tank event: June 2019, Edinburgh Business School, Heriot-Watt University  
  • Blog post: “Motivations in a context of poverty entrepreneurship”, Leeds University Business School Research and Innovation Blog, June 2017 
  • Conference papers: 
    • 2019 Kapasi, I., Stirzaker, R. Galloway, L., Jackman, L., and Mihut, A. “Entrepreneurship and poverty: an exploration of what’s driving business creation in this context”, ISBE conference, Newcastle, UK. November 14-15, 2019 
    • 2019 Stirzaker, R., Galloway, L., Jackman, L., Kapasi, I., and Mihut, A. “The intersection of poverty with disability, incapacity and the self-employment experience in the UK”, ISBE conference, Newcastle, UK. November 14-15, 2019 
    • 2019 Jackman, L., Stirzaker, R., Galloway, L., Kapasi, I., and Mihut, A. “Entrepreneurship and Disability: An exploration of the drivers of self-employment in this context, RENT conference, Berlin, Germany. November 27-29, 2019 
    • 2019 Mihut, A., Jackman, L., Galloway, L., Kapasi, I., Stirzaker, R. “Socio-economic trajectory and entrepreneurship: a UK study of the experiences of using self-employment as a way out of poverty”, RENT conference, Berlin, Germany. November 27-29, 2019
  • Enterprise on low income: Motives, values, experiences

Funded by the British Academy and The Leverhulme Trust from June 2017 to May 2019. Reference number: SG162905.

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News

Gender and Enterprise – May 2019 

In May 2019, Professor Laura Galloway took part in a Think Space event on Intersectionality at Newcastle University Business School, supported by the Institute for Small Business and Entrepreneurship’s Special Interest Group on Gender and Enterprise. Laura presented research and findings entitled Poverty and enterprise: revisiting social class through the lens of intersectionality as part of this project. 

The event brought together international experts interested in extending theory and research in entrepreneurship, and engaging with the complexities of drivers and experiences of self-employment and business. The two-day event provided space for discussion and development of ideas about the effects of intersectionality on minority and marginalised experiences of entrepreneurship. This was an important first event discussing some initial findings from the research project and the feedback from the event has been valuable in developing our thinking.  

Isla Kapasi Think Space event

 

 

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