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‘Helping a Large Number of People Become a Little Less Poor’: The Logic of Survival Entrepreneurs

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Abstract

Survival and growth-oriented entrepreneurs follow qualitatively different logics. In this article we retrace the scattered previous theorization of this distinction and present a consolidated set of key characteristics of the two types of enterprises, enriched by our own observations in the field. Our main purpose is to typify the different rationalities of the two groups of entrepreneurs. Second, we argue that because most existing interventions are based on the implicit assumption that all entrepreneurs are growth-oriented, they often fail to address the specific needs of survivalists. Finally, we outline an intervention rationale more attuned to the logic of survival entrepreneurs.

Les entrepreneurs axés sur la survie suivent des logiques qualitativement différentes de ceux dont l′objectif est la croissance économique. Dans cet article nous revenons sur la théorisation déjà vaguement esquissée de cette distinction et présentons un ensemble consolidé des caractéristiques clés des deux types d′entreprises, en nous appuyant sur nos propres observations de terrain. Nous cherchons, en premier lieu, à caractériser les logiques des deux catégories d′entrepreneurs. Puis, nous montrons que les interventions sont généralement fondées sur l′hypothèse implicite que tous les entrepreneurs sont axés sur la croissance. De ce fait, celles-ci répondent mal aux besoins spécifiques des entreprises axées sur la survie. Enfin, nous décrivons une approche d′intervention plus en lien avec la logique des entrepreneurs qui sont axés sur la survie.

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Notes

  1. Portes and Hoffman build on a (mainly Latin American) theoretical tradition that attempted to salvage the ‘working class’ as emancipatory agent by incorporating ‘petty commodity producers’. Indeed work for a fixed wage is only one of various forms of labour relations in the informal sector, including piece-rate homework and ‘renting’ assets (such as taxis and trucks) from an employer. We see a qualitative difference between these ways of organizing dependent labour (mainly found in production and transport) and ‘own-account’ survival entrepreneurs (typically in trade and petty services).

  2. Possible sub-categories within the group of growth-oriented entrepreneurs, for example distinctions between small, medium and large businesses, are outside the scope of this article. We would assume these to be predominantly quantitative in nature. We also do not go into more detailed sub-categories of survival entrepreneurs, like distinctions between basic survival pre-entrepreneurs and subsistence entrepreneurs, as proposed by Eigen (1992).

  3. For a recent literature review on graduation among micro and small businesses, see Gómez (2008).

  4. From our personal experience in visiting and evaluating enterprise development programmes, we found the ‘ladder’ metaphor to be one of the most popular among project staff.

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Acknowledgements

We thank Woord en Daad for allowing us to use material from a recent evaluation study carried out by Peter Knorringa and Erhard Berner on their SME programme in Bangladesh, and from a literature survey on graduation done by Georgina Gómez. We are also grateful for the constructive comments of the anonymous referees on a previous version of the article.

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  1. Institute of Social Studies, Erasmus University Rotterdam, The Hague, The Netherlands

    Erhard Berner, Georgina Gomez & Peter Knorringa

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  1. Erhard Berner
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  2. Georgina Gomez
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Berner, E., Gomez, G. & Knorringa, P. ‘Helping a Large Number of People Become a Little Less Poor’: The Logic of Survival Entrepreneurs. Eur J Dev Res 24, 382–396 (2012). https://doi.org/10.1057/ejdr.2011.61

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