Some risks of informal business in Russia – a case study from Saint Petersburg

Abstract

Purpose The purpose of this paper is to describe some risks and risk-taking when launching and running business in Russia during the socio-economic transformation. The risks are related to informal economy. Design/methodology/approach The research material consists of 11 thematic interviews of families, who launched and ran a business during the turn of the millennium and follow-up interviews. The interviews were extracted from a larger material of 100 interviews and 40 follow-ups focusing on household coping in Russian socio-economic transformation. Findings The paper focusses on risky shuttle trade as well as crime-related risks of business, as poignant illustrations of problems of entrepreneurship linked with informal economy. The risks are seen as social facts, objective or constructed, in some cases pointing out also how people speak about them. The testimonial stories of business show an individual or family focus on the risks, without major concern for legitimacy of action, albeit a need for distinction toward other corresponding risk-takers. Research limitations/implications The findings illustrate important aspects of informal economy in Russia, but they cannot be generalized. It would be most useful to carry out qualitative studies of small business to assess perception and construction of risks and coping with them, capturing the views of entrepreneurs themselves. Originality/value There is rather little micro-level information concerning the risks or uncertainty when launching and running business in the Russian Federation. Qualitative data enable deeper understanding of sensitive issues. The paper wants to introduce the concept of risk into the social research of informal economy.