NEW RESEARCH | Entrepreneurship not the obvious recipe out of poverty

Entrepreneurship is often presented as a way out of poverty. But in practice, the reality is different for people trying to run businesses under poverty, patriarchal norms and weak institutions. Research at the Swedish University of Agricultural Sciences (SLU) shows this.

Hina Hashim’s doctoral thesis is based on several years of fieldwork in Pakistan. A key finding is that entrepreneurship does not necessarily lead to economic mobility. The entrepreneurs she has studied over time do not follow a traditional business model focused on growth. Instead, their entrepreneurship is about creating security, maintaining legitimacy and making everyday life work.

– In a context where poverty is multidimensional – characterized by gender norms, class, legitimacy, mobility and lack of networks – growth is not the primary goal. Being able to continue operating at all is an achievement, she says.

Quiet and gradual action

Hina Hashim challenges the common image of people in poverty as passive or unable to change their situation. In her study, both women and men show what she calls nuanced agency: small, relational and careful steps that allow them to keep going despite limitations.

– These actions take place within the structure, not by breaking out of it. For example, one woman started sewing clothes in a room at home to stay legitimate within patriarchal norms. Through small, negotiated steps, the business grew – today it includes 700 women.

Another research finding is how entrepreneurs use masking – or concealment – to appear legitimate to both family and state.

– For example, women run beauty or sewing businesses from home without marketing.

– Visibility can create distrust in the family and, in the worst case, lead to sanctions from the authorities demanding commercial premises, fees or payments that the small business owner cannot meet.

Hiding is thus about keeping the business small and invisible in order to continue – not because the entrepreneurs lack ambition, but because the structure does not allow visibility.

Small benefits create big differences

The thesis also shows that some people have relational privilege – small but crucial advantages such as family support, education or social trust. These largely determine what actions are possible.

– One person with family support can negotiate acceptance to run a business from home. Another, without the same benefits, may not be able to take the same steps despite similar motivations, explains Hina Hashim.

Restrictive for both women and men

The study also shows that patriarchal structures do not only restrict women. The men in the study also felt that their freedom of action was affected.

– They are expected to be stable breadwinners, and small-scale entrepreneurship is considered risky and “not a real job”. Men therefore also have to adapt their behavior to be accepted.

Overall, the thesis shows that entrepreneurship in poverty cannot only be understood as an economic phenomenon. It is shaped by relationships, norms and morals – and by what is required to be considered legitimate in the local context. This also means that support efforts based on growth logic often miss the target.

– For entrepreneurship to be possible, people must first have security, support and social acceptance, Hina Hashim stresses.

Contact hina.hashim@slu.se

More about the thesis
Hina Hashim will defend her thesis on December 16 at the Swedish University of Agricultural Sciences (SLU) Entrepreneuring in structurally constrained context Nuancing agency and privilege in poverty.