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Doctoral dissertation: Innovative entrepreneurship may be a viable solution for reducing poverty

Entrepreneurs need an innovative business idea, access to significant support and an environment that endorses entrepreneurship.
Kolmipyöräinen traktori nimeltään Bullet Santi ja kehittäjänsä Mansukhbhai Jagani
Three-wheel tractor named Bullet Santi made by Mansukhbhai Jagani (in the picture)

Poverty is a global problem that is present to varying degrees in all societies. However, the problem is most serious in African and Asian countries where people have difficulties meeting their basic needs and where a lack of basic infrastructure affects people's lives regardless of income. In her doctoral dissertation of management studies, Marleen Wierenga, Master of Science in Economics and Business Administration, has studied entrepreneurship among the poor in India.

‘Innovations created by poverty-stricken Indian farmers, such as refrigerators made of clay and small tractors, and the entrepreneurial activities they generate reduce poverty in many ways,’ says Marleen Wierenga.

‘The entrepreneurial activities of people living in poor conditions are often small-scale and based on copying the practices of others. Income from these endeavours is low and varies on a daily basis, and entrepreneurs have been forced by circumstances to start their business. This kind of entrepreneurship makes day-to-day life easier but has little impact on the reduction of poverty.’

Unlike previous studies, Marleen Wierenga's research has focused on innovative entrepreneurs who have developed an innovation to make their daily lives easier and set up a company to commercialise their innovation.

For her research, Wierenga carried out a six-week field trip to India during which she met entrepreneurs, their customers and organisations that support entrepreneurs locally.

‘I wanted to understand how the businesses of innovative entrepreneurs grow. Although every entrepreneur struggles with a lack of resources, the activities of impoverished entrepreneurs are further restricted by limited social capital, inadequate financial competence and little preliminary knowledge of entrepreneurship, as well as narrow cultural norms. By visiting the entrepreneurs, I gained a better overview of their situation.’

Support for those with the prerequisites to succeed as entrepreneurs

The new doctoral dissertation shows that targeted support related to practical challenges is important in order to enable grassroots entrepreneurs to fully implement their entrepreneurship. In addition, it is essential to establish links between underprivileged entrepreneurs and the rest of society. For example, the expertise of professionals and students may be valuable. In addition to competence, these connections improve the position of entrepreneurs in society and increase solidarity between different social classes.

‘It is worth remembering that entrepreneurship is not suitable for everyone and it is not guaranteed that this solution will reduce poverty. Instead, it is important to support those with good prospects of success as entrepreneurs. Entrepreneurship can be a viable solution for reducing poverty when certain basic conditions are met. The entrepreneur must have an innovative business idea, access to significant support and an environment that endorses entrepreneurship’, says Marleen Wierenga.

This dissertation emphasises the role of innovative poverty-stricken entrepreneurs. As their company grows, the entrepreneurs can overcome poverty and secure a better livelihood for their own family. In addition, the entrepreneurs play a key role in creating solutions that are relevant to people living in poor conditions. On the other hand, entrepreneurs are also important in terms of creating jobs for members of their communities.
 

The doctoral dissertation of Marleen Wierenga, M.Sc, "Innovative entrepreneurial processes in the low-income context" will be publicly examined on Friday, May 29th, 2020. The public defense will be organised via remote technology. The Zoom link will be published on the event page a day before the defense at the latest.

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