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.