Why barefoot entrepreneurs struggle to succeed - the role of institutional resistance

Entrepreneurship is seen as a way out of poverty, and yet despite widespread entrepreneurial activities among the poor in developing countries, poverty persists. These 'Barefoot entrepreneurs' find that social and market exclusion are huge barriers to success.

Barefoot entrepreneurship can be defined as the entrepreneurial practices of individuals who live primarily in marginal, poor and excluded places. Research on barefoot entrepreneurship is growing, yet we still know little about the potential limits of institutional entrepreneurship in the context of extreme poverty. In their paper, Staying poor: Unpacking the process of barefoot institutional entrepreneurship failure, the authors seek to understand how barefoot institutional entrepreneurship efforts fail amidst resistance from powerful actors in the institutional context.

A qualitative study of marginalised waste pickers in Colombia sheds light on the role of power in barefoot institutional entrepreneurship failure. Along with an NGO who acted as their valued partner, the waste pickers worked on legitimising their market inclusion (through practices like framing, coalition building, employing ingenuity, bargaining, and even begging for compliance) and organising themselves for collective action. Despite achieving regulatory change that endorsed their market inclusion, they were met with immense resistance from various powerful actors in the field, such as local authorities, private companies, the media, and the Court. To suppress support for the waste pickers' efforts, powerful actors mobilised overt power mechanisms such as de-legitimising (through mythologising and demonising) and deterring (by barring access to waste). They also employed covert power mechanisms, such as manipulating (through empty promises, dividing and conquering, reinterpreting the law, enabling, and silencing) and abstaining (neglecting and omitting the duty to protect, turning a blind eye, not complying, and remaining silent). The study's findings reveal a process where regulatory change, which endorsed waste pickers' market inclusion, exacerbated these power mechanisms, contributing to the waste pickers' market exclusion.

The study therefore reveals a paradox of inclusion: the harder marginalised barefoot entrepreneurs push for and gain regulatory legitimacy for their market inclusion, the more both overt and covert power mechanisms work to suppress the diffusion of institutional change, aggravating barefoot entrepreneurs' market exclusion. The study shows that while regulatory change is necessary to enhance barefoot entrepreneurs' market inclusion, it is not sufficient without normative and cognitive support from powerful actors in the institutional field.

This study brings important nuance to the understanding of the limits of entrepreneurship in the context of extreme poverty, and should serve as a guide to policy, by demonstrating the oppressive, hegemonic role of power. It expands the conceptualisation of barefoot institutional entrepreneurship, not only as an emancipatory force with the potential to transform societies and alleviate poverty, but also rife with social and market inclusion challenges stemming from marginalisation, power differentials, and lack of normative and cognitive support for institutional change.

Staying poor: Unpacking the process of barefoot institutional entrepreneurship failure has been published in Journal of Business Venturing. The published paper can also be downloaded at City Research Online.