Global downturn: how entrepreneurs have been impacted by the global financial crisis
- Document type
- Corporate author(s)
- Delta Economics
- Delta Economics
- Date of publication
- 1 January 2011
- Small business & enterprise: the practicalities of running a small business and the theory of entrepreneurship, Trends: economic, social and technology trends affecting business
- Business and management
- Material type
This report looks at the impact the global financial and economic crisis is having on sustainable enterprise, entrepreneurs, perceptions of entrepreneurs and decent work across the world. It argues that small companies, irrespective of location, are approaching the crisis in a similar way: they are reducing risks, not borrowing and trying not to let their workforces go in the interests of economic sustainability. It looks at individual and own account workers and their experiences on the basis of a qualitative survey of entrepreneurial practitioners in policy and business and argues that the challenge for policy is to provide the mechanisms for turning sole trader or own account business into entities that are sustainable and that provide decent and enduring work, both for the individual entrepreneur or founder and potentially for the communities around them.
It suggests that much of the policy effort to date has taken the approach of providing guarantees to credit through the orthodox banking system. Demand for finance remains low and this is because the perceived personal risks for the individual entrepreneur are perceived to be high at present. The notable exception to this is in micro-credit where supply and demand have increased. However, much of this is going towards replacement income rather than sustainability.
It concludes that the key issue for developing sustainable enterprises is to look at the personal risks that entrepreneurs take in engaging in the labour market. A real understanding of what motivates, and what inhibits entrepreneurs is vital. These are broader than financial wealth and include value creationl, in the form of family and community welfare as well as issues of environmental sustainability.
Related to Small business & enterprise: the practicalities of running a small business and the theory of entrepreneurship
Downloadable report aiming to explain why few startups scale
Downloadable report on the BEIS Business Support Evaluation framework
Downloadable report on consumer prepayments on retailer insolvency