Entrepreneurship in the Informal Economy

Abstract

This paper will discuss the role of entrepreneurship in the informal economy. Emphasis will be placed on outlining the general view that entrepreneurship does not exist outside the confines of formality. In this context, the concept of formality, will be challenged as a way of narrowing down the definition of entrepreneurship itself, as it fails to account for the multiple ways in which, the entrepreneurial spirt of individuals manifests its capacity to contribute (in a different… non formal manner) to the growth of national product not only in developing but also in developed countries. This paper will show how the entrepreneurial spirit of informal entrepreneurs in different economic sectors, has contributed to create wealth without resorting to delinquent activities. Operating in the informal sector is, in many cases, not a choice, but, a necessity. The formal limitations imposed by States on their economies, end up excluding the contribution of many potential actors, limiting the country’s economic growth to productive capacity of only a few firms. These firms, that tow the draconian line of formality, are recognized as the real productive units worthy of protection and support by society. On the contrary, those that fail to tow the line of formality (regardless of their reasons), however, are stigmatized and persecuted as enemies of society and denied any recognition of their contribution to the economy.A glance of the economy of countries in all continents, show how the entrepreneurial spirit of people, defies the formal reality of their economies, proving that, an alternative path to growth and wealth creation is not only possible but real.