Overcoming the liability of poorness: disadvantage, fragility, and the poverty entrepreneur

Drivers of fragility in the ventures of poverty entrepreneurs

This study examines whether and how the experience of poverty shapes the entrepreneurial journey. The research builds upon disadvantage theory to explore how liabilities resulting from the poverty experience can serve as obstacles to the creation of sustainable enterprises. An analysis of data from a sample of 202 entrepreneurs in poverty contexts in the USA demonstrates how liability of poorness (LOP) factors leads to the emergence of more fragile ventures. The findings further indicate that entrepreneurial alertness can moderate the effect of LOP on venture fragility. The study offers theoretical and practical suggestions for further understanding and fostering entrepreneurship as a viable solution to poverty.

Natural hazards compound COVID-19 impacts on small businesses disproportionately for historically underrepresented group operators

In the wake of the COVID-19 pandemic small businesses made headlines as hard hit by customer losses, revenue declines, and business closures. Yet, the impacts have been felt disproportionately by small businesses that suffered interruption due to pre-existing socioeconomic stressors and/or concurrent natural hazards experienced during the pandemic. To illuminate those compound impacts, we conducted a survey of over 1350 U S.-based small businesses. Our findings indicate that those businesses that experienced concurrent natural hazards during the pandemic were associated with relatively greater negative impacts. But importantly, enterprises that are historically underrepresented group operated (HUGO)-minority, women, and veteran-operated businesses- saw largely amplified negative impacts from COVID-19. In terms of the magnitude of COVID-19 impacts, the effect size of belonging to HUGO was more than twice as large as the effect size of experiencing a concurrent natural hazard during the pandemic. These results provide evidence for the disproportionate impacts that HUGOs face due to the pandemic, which are exacerbated when compounded by natural hazards. Given these results, there is evidence that the opportunity gap between HUGO and non-HUGO businesses is significant ahead of additional stressors or shocks. This opportunity gap is further accelerated when compounded with other events, here the compounding of natural hazards and COVID-19. Additional interventions need to be offered to HUGO businesses in areas with high likelihood of overlapping incidents. Further work is required to address social inequity and economic fragility of HUGO businesses, especially those that face the complexity of additional shocks, such as natural hazards.

The future of entrepreneurship: the few or the many?

Gazelles (high-growth), unicorns (ventures valued at $1 billion), and decacorns (ventures valued at $10 billion) appear to be dominating the landscape of entrepreneurship. In 2021, there were more than 700 ventures that have been valued at $1 billion or more by venture capitalists, and there seems to be a continued trend in more arising. However, the facts show that small- and medium-sized enterprises (SMEs) account for over 90% of businesses and 50% of employment of the worldwide population, contributing up to 55% of GDP in developed economies. Thus, it is clear that in developed countries, small firms are the economy. However, the entire realm of entrepreneurship appears to drifting slowly away from the importance of smaller firms and focusing the entire emphasis on the relatively few tech giants. These giant corporations are now viewed through the prism of entrepreneurship. Thus, we ask quo vadis - where will the focus of entrepreneurship be post-COVID-19 - centralization or democratization? For researchers and policy makers, shedding some light on this question may help in the formulation of research agendas and policy directions.