Enacting Entrepreneurship in ‘Informal’ Businesses

Abstract

The objective of this paper is to establish whether informal firms have entrepreneurial possibilities, or are marginal and inconsequential. The authors explore the nature of informal entrepreneurship in the theoretically rich context of Tunisia where, in the turbulent aftermath of the Arab Spring, the fiercely competitive environment is characterized by high unemployment while informal enterprise flourishes. The authors critically examine concepts of push and pull, necessity and opportunity entrepreneurship, as used in some studies to ‘explain’ informal entrepreneurship as inferior. It is argued that these are descriptors and that it is wrong to ascribe causality to them with regard to the nature of businesses. Consequently, it is maintained that informal enterprises have been wrongly construed as dead-end, marginal small businesses with no entrepreneurial future. The paper presents a comparative case analysis of three informal and three formal firms, using the framework of entrepreneurial orientation. The authors find that, although their nature does affect size and growth, informal enterprises are entrepreneurial. Moreover, when viewed more broadly, these businesses are but a different form of entrepreneurship. Their entrepreneurial ‘fit’ is in the opportunity created by their context and circumstances. It is therefore conceptually wrong to dismiss them as marginal, but practically right to seek out ways to bring them into the formal sector.