Entrepreneurship, the Informal Economy and Rural Communities

Abstract

Purpose This paper evaluates whether early-stage entrepreneurs and the established self-employed in rural communities trade off-the-books and whether this tendency varies across deprived and affluent rural localities.

Methodology Face-to-face interviews were conducted with 350 households in both affluent and deprived rural communities in England. Findings In both the affluent and deprived rural communities surveyed, wholly legitimate enterprises represent just the tip of the iceberg. Beneath the surface is a large hidden enterprise culture of both registered businesses trading off-the-books and unregistered wholly off-the-books enterprises. However, the preponderance of both early-stage entrepreneurs as well as the established self-employed to trade off-the-books is greater in deprived than affluent rural communities, intimating that deprived rural communities are perhaps relatively more enterprising and entrepreneurial than is currently recognised.

Research limitations/implications These findings are based on a small-scale study of five English rural communities. Further studies are now required to evaluate whether similar findings are replicated elsewhere. Practical implications The paper reveals that legitimising the hidden enterprise culture in deprived rural communities could be an important but so far untapped means of promoting enterprise and economic development.

Originality/value Evaluates the extent of informal entrepreneurship in rural communities and how this varies spatially.

Keywords: entrepreneurship, enterprise culture, rural economies, informal sector, local economic development, enterprise development

JEL Classification: H26, J46, J48, K34, K42, O17