Evaluating informal entrepreneurs' motives: evidence from Moscow

Purpose – Recently, distinctions between “necessity‐driven” entrepreneurs who have limited options for work and “opportunity‐driven” entrepreneurs pulled into the exploitation of a perceived business opportunity have been transcended by commentators displaying the co‐presence of opportunity and necessity in entrepreneurs' motives and how their relative importance shifts over time. This paper aims to evaluate, critically, whether this re‐theorisation is also valid when considering the motives of informal entrepreneurs. Design/methodology/approach – A household survey of entrepreneurship is reported conducted in Moscow during late 2005 and early 2006. In the 313 households surveyed, 81 entrepreneurs were identified who had started‐up a business venture in the past 42 months, all of whom reported that they were operating wholly or partially in the informal economy. Findings – For some 80 per cent of informal entrepreneurs, both necessity‐ and opportunity‐drivers were co‐present in their decision to start up an enterprise. There was also a clearly identifiable shift in their motives away from necessity‐ and towards opportunity‐drivers as their ventures became more established. Research limitations/implications – Akin to recent literature on mainstream (legitimate) entrepreneurs' motives, the survey thus displays the need for a less bifurcated understanding of informal entrepreneurs' motives that recognises the co‐existence of necessity‐ and opportunity‐drivers and the temporal changes in their relative importance. Originality/value – The study reveals the need to transcend the currently dominant simplistic portrayals of informal entrepreneurs as either universally necessity‐driven or universally opportunity‐driven.