Misunderstandings and Fallacies Surrounding Poverty Entrepreneurship: A Capabilities Perspective

Abstract

While poverty has emerged as a mainstream topic within the discipline of entrepreneurship, there is much we do not understand at a basic level when it comes to the poverty and entrepreneurship interface. This research explores areas where significant misperceptions, errant assumptions, and questionable conclusions exist when it comes to ventures launched by individuals in poverty circumstances. Using capabilities theory as a foundation, and focusing on liabilities that derive from the poverty experience, the discussion is organized around ten major fallacies. In each area, we introduce prevailing perspectives, and then provide a countervailing argument based on available, albeit limited, research. It is argued that these fallacies can serve to misdirect or undermine the ability to advance theory, practice and policy development. Establishing a more evidence-based foundation for ongoing research is critical for realizing the potential of entrepreneurship as a vehicle for enhancing the lives of the poor.

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