Entrepreneurship, the Informal Economy and Rural Communities

Purpose – This paper aims to evaluate whether early-stage entrepreneurs and the established self-employed in rural communities trade off-the-books and whether this tendency varies across deprived and affluent rural localities. Design/methodology/approach – Face-to-face interviews were conducted with 350 households in both affluent and deprived rural communities in England. Findings – In both the affluent and deprived rural communities surveyed, wholly legitimate enterprises represent just the tip of the iceberg. Beneath the surface is a large hidden enterprise culture of both registered businesses trading off-the-books and unregistered wholly off-the-books enterprises. However, the preponderance of both early-stage entrepreneurs, as well as the established self-employed to trade off-the-books is greater in deprived than affluent rural communities, intimating that deprived rural communities are perhaps relatively more enterprising and entrepreneurial than is currently recognised. Research limitations/implications – These findings are based on a small-scale study of five English rural communities. Further studies are now required to evaluate whether similar findings are replicated elsewhere. Practical implications – The paper reveals that legitimising the hidden enterprise culture in deprived rural communities could be an important but so far untapped means of promoting enterprise and economic development. Originality/value – Evaluates the extent of informal entrepreneurship in rural communities and how this varies spatially.