The rise of the chancer entrepreneur: Institutions and digital technology for entrepreneurship in uncertain times

Abstract

The COVID-19 pandemic brought economic activity to an abrupt standstill, prompting many existing businesses to temporary pause trading, whilst several others pivoted toward digital platforms. The UK labour market was particularly affected, with widespread unemployment leading individuals to seek alternative income sources—often through entrepreneurship. In response, the government implemented subsidies and cash transfers, whilst digital technologies—especially internet use—emerged as vital tools for launching and managing new businesses. Despite these developments, limited research explores how institutional support and digitalisation jointly shape entrepreneurial behaviour during crises. This study addresses that gap by asking: how do government support mechanisms and digital technologies influence entrepreneurship amid economic disruption? Drawing on institutional economics and technology affordance theories, we focus on chancer entrepreneurs—individuals who leverage government aid and digital tools to navigate uncertainty and seize business opportunities. We estimate longitudinal probit models using UK Household Longitudinal Study data from 2019 to 2022. Our findings highlight the key role of institutional and digital factors in fostering entrepreneurship during disruptions. Government support increases entrepreneurial aspirations by 0.12 points during the pandemic, as well as the probability of becoming self-employed by 0.05 and 0.09 points before and during the pandemic period, respectively. Similarly, digital technologies raise the likelihood of entrepreneurial intention by 0.27 points during COVID-19 and self-employment by 0.30 points pre-pandemic. These results underscore important policy implications: sustained institutional support and improved digital access can transform crisis-driven necessity into long-term entrepreneurial success, enhancing economic resilience in the face of future shocks.