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Tackling the hidden enterprise culture: Government policies to support the formalization of informal entrepreneurship

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  • Colin C. Williams
  • Sara Nadin

Abstract

It is now recognized that many entrepreneurs operate wholly or partially in the informal economy. Harnessing this hidden enterprise culture by facilitating its formalization is therefore a potentially effective and innovative means of promoting economic development and growth. To start evaluating how this might be achieved, the aim of this paper is to understand entrepreneurs’ motives for operating in the informal economy so as to identify the public policy interventions required to facilitate the formalization of this hidden enterprise culture. Reporting a survey of 51 nascent entrepreneurs in North Nottinghamshire, of which 43 were operating in the informal economy, the finding is that entrepreneurs’ rationales for working informally differ according to both whether they operate wholly in the informal economy or have registered enterprises but trade partially off-the-books, as well as whether they view themselves as on a journey towards formalization or not. Different policy measures are therefore required to tackle each type of informal entrepreneurship. The outcome is a tentative call for a more nuanced and bespoke policy approach for tackling the different kinds of informal entrepreneurship that comprise the hidden enterprise culture.

Suggested Citation

  • Colin C. Williams & Sara Nadin, 2012. "Tackling the hidden enterprise culture: Government policies to support the formalization of informal entrepreneurship," Entrepreneurship & Regional Development, Taylor & Francis Journals, vol. 24(9-10), pages 895-915, December.
    • Handle: RePEc:taf:entreg:v:24:y:2012:i:9-10:p:895-915
    DOI: 10.1080/08985626.2012.742325
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    1. Annette Mummert & Friedrich Schneider, 2002. "The German Shadow Economy: Parted in a United Germany?," FinanzArchiv: Public Finance Analysis, Mohr Siebeck, Tübingen, vol. 58(3), pages 286-316, July.
    2. Benno Torgler, 2007. "Tax Compliance and Tax Morale," Books, Edward Elgar Publishing, number 4096.
    3. Colin C. Williams, 2006. "The Hidden Enterprise Culture," Books, Edward Elgar Publishing, number 3948.
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    Cited by:

    1. Sam Njinyah & Simplice A. Asongu, 2022. "The relationship between firms that start operating as unregistered and firms’ innovation: the moderating effect of access to finance," Working Papers 22/099, European Xtramile Centre of African Studies (EXCAS).
    2. Williams Colin C., 2015. "Evaluating the Variations in Employment Relations Across Developing! Economies: A Degrees of Informalisation Approach," Journal of Economy and its Applications, Sciendo, vol. 5(1), pages 1-21, December.
    3. Ashenafi Biru & Pia Arenius & Garry Bruton & David Gilbert, 2024. "Firm Formalization Strategy : The Interaction of Entrepreneurs and Government Officials in the Enforcement of Regulation," Post-Print hal-04493248, HAL.
    4. Kareem Elhennawi, 2016. "Factors Affecting Business Informality Among Egyptian Opportunity Entrepreneurs: An Exploratory Study," Journal of Developmental Entrepreneurship (JDE), World Scientific Publishing Co. Pte. Ltd., vol. 21(04), pages 1-18, December.
    5. Veronica, Scuotto & Manlio, Del Giudice & Shlomo, Tarba & Antonio, Messeni Petruzzelli & Victor, Chang, 2020. "International social SMEs in emerging countries: Do governments support their international growth?," Journal of World Business, Elsevier, vol. 55(5).
    6. Colin C. Williams & Youssef Youssef, 2014. "Classifying Latin American Economies: A Degree of Informalisation Approach," International Journal of Business Administration, International Journal of Business Administration, Sciedu Press, vol. 5(3), pages 73-85, May.
    7. Yulita, & Muhamad, Suriyani & Kulub Abdul Rashid, Noorhaslinda & Hussain, Nor Ermawati & Mohamad Akhir, Noor Haslina & Ahmat, Nizam, 2020. "Resilience as a moderator of government and family support in explaining entrepreneurial interest and readiness among single mothers," Journal of Business Venturing Insights, Elsevier, vol. 13(C).
    8. Suwastika Naidu & Anand Chand, 2017. "National Culture, Gender Inequality and Women’s Success in Micro, Small and Medium Enterprises," Social Indicators Research: An International and Interdisciplinary Journal for Quality-of-Life Measurement, Springer, vol. 130(2), pages 647-664, January.

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