Spatial variations in the hidden enterprise culture: Some lessons from England

Despite the growing recognition that many businesses start by trading on a partially or wholly off-the-books basis, there has been little investigation of whether the prevalence and character of this hidden enterprise culture varies spatially. The aim of this paper is to start to fill that gap. Reporting the results of face-to-face interviews conducted in affluent and deprived urban and rural English localities with 91 early-stage entrepreneurs and 81 established self-employed, it is shown that in all localities wholly legitimate businesses are just the tip of the iceberg and that beneath the surface is a large hidden enterprise culture. However, the preponderance of early-stage entrepreneurs and the established self-employed to trade off-the-books is greater in some locality-types than others. Not only do early-stage entrepreneurs and the established self-employed more commonly trade off-the-books in deprived and rural localities, but they are also more likely to trade wholly off-the-books and therefore not be even recognized as existing by official data sources. The implication is that deprived and rural communities are more enterprising and entrepreneurial than is currently recognized and, consequently, that legitimizing this hidden enterprise culture could be an important means of promoting enterprise and economic development in such communities. The paper concludes by briefly reviewing how this might be achieved.