Navigating the Margins: The Role of Formal and Informal Practices in Shaping Morocco's Entrepreneurial Ecosystem

Introduction and Objectives The entrepreneurial landscape in Morocco presents a unique interplay between formal and informal sectors, offering a compelling case study on the dynamics within non-western entrepreneurial ecosystems. While existing research on entrepreneurial ecosystems has largely focused on formal structures within high-income, western contexts (Stam, 2015; Wurth et al., 2019), Morocco's ecosystem exemplifies how informal networks and community-based practices complement or substitute formal support structures in resource-constrained settings. This study aims to explore the specific mechanisms, relational dynamics, and configurational attributes of Morocco's entrepreneurial ecosystem, particularly examining how entrepreneurs navigate formal and informal realms to achieve resilience and growth. Through an auto-ethnographic approach, this paper contributes to an evolving dialogue on the structural and social dimensions of entrepreneurial ecosystems, emphasizing the importance of context-specific factors that shape entrepreneurial practices in non-western and low-income economies. Literature Review The concept of entrepreneurial ecosystems (EEs) has evolved to include relational, structural, and institutional frameworks that influence entrepreneurial success (Stam, 2015). However, existing theories often fall short of capturing the nuances of ecosystems in the Global South, where formal support structures are limited, and informal practices play a significant role in sustaining entrepreneurship (De Soto, 2000). De Soto's theory on informal economies underscores the adaptive strategies that entrepreneurs deploy within "dual economies," where formal and informal mechanisms coexist (De Soto, 2000). This study builds on Granovetter's (1985) theory of social embeddedness, examining how Moroccan entrepreneurs leverage informal networks and community ties to compensate for gaps in formal infrastructure. Additionally, Hofstede's (1980) cultural dimensions theory provides a foundation for understanding the influence of cultural factors, including collective identity and family affiliation, in shaping informal business practices in Morocco. Method This research employs an auto-ethnographic methodology, allowing for a reflective examination of my personal experience as an entrepreneur in Morocco. This approach provides a deeply contextualized analysis of the interactions between formal and informal structures within Morocco's entrepreneurial ecosystem. Data is drawn from interviews, personal narratives, and participant observations, offering a holistic view of how entrepreneurs navigate the complexities of identity, community, and institutional constraints. By examining lived experiences and interactions within the ecosystem, the study reveals the mechanisms through which informal networks, social capital, and community affiliations facilitate entrepreneurial resilience and resourcefulness. Results The findings underscore three core themes in Morocco's entrepreneurial ecosystem: (1) the critical role of informal networks and social capital in resource acquisition and business development, (2) the dual nature of the ecosystem, where formal and informal practices intersect, creating a hybrid structure that supports entrepreneurship, and (3) the importance of cultural identity layers—national, tribal, familial, and linguistic—as significant influencers on entrepreneurial practices and resilience. These themes highlight how Moroccan entrepreneurs create adaptive strategies that enable them to operate within and across formal-informal boundaries, thus fostering a resilient entrepreneurial ecosystem. Discussion Morocco's ecosystem, with its blend of formal and informal practices, challenges conventional EE models that emphasize formalized structures and institutional support. This study proposes that entrepreneurial ecosystems in non-western contexts can benefit from hybrid models that integrate informal community-based practices with formal mechanisms. By drawing on the onion model of identity, which conceptualizes identity in multi-layered affiliations (e.g., national, tribal, and family ties), the discussion explores how cultural identity influences Moroccan entrepreneurs' navigation of ecosystem constraints and opportunities. These findings contribute to an emerging discourse on the ethics, inclusivity, and social dimensions of EEs, highlighting the necessity of models that recognize the legitimacy of informal practices in entrepreneurial success. Implications and Limitations The study has significant implications for policymakers and ecosystem stakeholders in Morocco and similar contexts. Recognizing the role of informal networks in supporting entrepreneurship can inform the design of hybrid ecosystem models that accommodate both formal and informal practices, fostering inclusive growth. However, this research is limited by its auto-ethnographic nature, which, while providing depth, may lack generalizability across diverse non-western ecosystems. Future research could explore comparative studies across different regions in the Global South, examining how varied cultural and institutional contexts impact entrepreneurial ecosystems. Conclusion This study enriches the literature on entrepreneurial ecosystems by providing an in-depth exploration of Morocco's hybrid ecosystem, where formal and informal practices coalesce to support entrepreneurial resilience. By acknowledging the significance of context-specific factors such as identity, community, and informal networks, the paper calls for a more inclusive understanding of entrepreneurial ecosystems—one that accommodates the diversity of practices that drive entrepreneurship in resource-constrained environments.