Informal entrepreneurship and the insidership–outsidership duality

Introduction

High rates of entrepreneurial activity are often observed in countries with low levels of industrial development (Naudé, 2010). This apparent paradox is now relatively well understood, insofar as it is driven in large part by inequality of economic opportunity: in wealthier countries, the availability and quality of wage employment are generally higher than in poorer countries, where the industrial base tends to be narrower and labour market institutions weaker (Acs et al., 2008). This inaccessibility of decent work pushes a large number of people into entrepreneurship (Dencker et al., 2021; O’Donnell et al., 2024), much of which is undertaken in the informal economy. It is a phenomenon that can manifest even more strikingly within developing countries, where the poorest and most marginalised districts – particularly in urban areas – become visible hotbeds of informal entrepreneurship (de Soto, 2000). But this explanation yields its own paradox. It is in essence a narrative of economic outsidership, whereby those who find their options circumscribed by inequalities in our global economic system turn to entrepreneurship as a means of income generation. However, structural inequalities of this kind do not make outsiders of individuals, rather they make outsiders of the communities and other social collectives to which those individuals belong, and herein lies the paradox. Social collectives that are acutely and chronically marginalised can play an important enabling role for the entrepreneurs that belong to them. So, whilst entrepreneurs that operate in so-called ‘base of the pyramid’ (BoP) settings are among the archetypal outsiders of the modern economy, research into their practices, and into the broader institutional architecture of BoP markets, shows that they are also embedded in rich sociocultural systems that enable and regulate their work (Slade Shantz et al., 2018; Sydow et al., 2022; Weiss et al., 2024).

BoP contexts, therefore, have the potential to reveal particular insights into the phenomenon of outsider entrepreneurship – not only because they constitute an ‘extreme case’ (Alvi et al., 2019) of entrepreneurial outsidership but also because they provide a rich illustration of the multi-dimensionality of outsidership. The macroeconomic inequalities that produce outsider entrepreneurs tend to do so by creating dense clusters of outsidership – in the form of deprived communities – which means that we must consider outsidership and insidership as two sides of the same coin if we are to understand the micro-level implications of those inequalities. In other words, we are forced to consider outsidership not only as a question of ‘I’ but also as a question of ‘we’. Similarly, the lens of outsider entrepreneurship is one that can yield new and important insights for research on entrepreneurship in contexts of severe poverty. Although much attention has been paid to the various ways in which communities enable and constrain entrepreneurial action in BoP contexts (Peredo and Chrisman, 2006; Viswanathan et al., 2010), much less attention has been paid to the fact that these communities play host to insider/outsider dynamics which are deeply complex (Bähre, 2007), and which are likely to have a profound impact on entrepreneurial practices and outcomes.

In this respect, our study seeks to move beyond an analysis of how entrepreneurial practices are influenced by the contexts in which they are enacted; taking the premise that ‘context matters’ as a point of departure (Welter, 2011; Zahra, 2007), we instead attempt to drill deeper into the question of why different entrepreneurs relate to the same context in different ways. To provide a theoretical grounding for the intertwinement of insidership and outsidership, we draw from Giddens’s (1986) seminal distinction between a duality and a dualism. The paired elements within a duality – in the case of Giddens’s structuration theory, these paired elements were structure and agency; in our case they are insidership and outsidership – are assumed to be structurally inseparable, such that the interaction between those elements may make them mutually generative or mutually reinforcing. By contrast, a dualism tends to treat those paired elements as essentially separate and therefore, amenable to categorisation by dichotomy (Jackson, 1999). This point of view yields what we believe to be a novel and theoretically important starting assumption: rather than assuming that entrepreneurs will look to shed the status of outsider with a view to obtaining the status of insider (or even postulating that they might attempt to preserve their outsider status for whatever benefits it might bestow), we instead assume that entrepreneurs – particularly those operating in disadvantaged contexts – are both outsiders and insiders at the same time. Accordingly, our research question can be stated as follows: how do entrepreneurs operating in BoP contexts navigate the insidership–outsidership duality that stems from being embedded in a community that is itself acutely marginalised?

Data for the study were collected during two phases of ethnographic fieldwork – spaced one year apart and totalling four-and-a-half months – conducted by the first author in an informal (or ‘slum’) settlement called Mukuru, in Nairobi, Kenya. Beyond the fact that a slum represents a stark embodiment of poverty and marginalisation, there are several reasons why the community of Mukuru provided an appropriate empirical context for the research question at hand. First, Mukuru plays host to an extraordinary concentration of entrepreneurship, a large majority of which is undertaken on a purely informal basis. Second, the territorial boundaries of Mukuru are quite clear, as is the glaring disparity in the quality of physical infrastructure, services, economic opportunities and so on, between the slum and its hinterland. This socio-spatial boundedness supports at least a rudimentary delineation between ‘insiders’ and ‘outsiders’, which is important to our theoretical aims. Third, because Mukuru is a community that exists in an ongoing, decades-long state of rapid expansion, a large proportion of its entrepreneurs have experienced – or are somewhere in the midst of – ‘crossing the threshold’ between outsidership and insidership, which is something that may be less commonplace in more stable communities, particularly those in rural areas. Finally, entrepreneurship in Mukuru is sufficiently homogenous to reveal the kind of patterns and themes that underlie qualitative theorising (Chalmers and Shaw, 2017; Miller, 2011; Wiklund and Shepherd, 2011); yet, it is sufficiently heterogenous to enable a systematic analysis of variance. This, too, is core to the basic aims of our study.

The contributions of our study are threefold. First, we contribute to the emerging literature on entrepreneurial outsidership by re-imagining the insider–outsider dichotomy as a duality. More specifically, we examine how entrepreneurs cultivate and capitalise upon the solidarity that derives from collective outsidership, where entire social groups believe themselves to be marginalised. To-date, research has generally treated entrepreneurial outsidership as a function of individual difference, where specific individuals (e.g. migrants, people with disabilities, people from deprived backgrounds) are deprived of certain opportunities or privileges because they do not conform to a given social or cultural ‘standard’ (Miller and Le Breton-Miller, 2017; Neville et al., 2018; Santos et al., 2022). Surprisingly little attention has been paid to the fact that outsiders – peripheral as they may be within society at large – are often bound by geography, ethnicity or lived experience to each other. That is to say, outsidership creates in-groups, as the attributes, circumstances, interests or worldviews that constitute the social markers of outsidership come to double as the basic symbolic ingredients of collective identity (Haslam et al., 2005; Snow and McAdam, 2000). Whilst other literatures, such as those on the emergence of social and political movements (Polletta and Jaspar, 2001; Snow, 2001), have long seen outsidership as a cornerstone of collective struggle, the still-nascent literature on entrepreneurial outsidership has tended instead to frame the process of ‘breaking in’ as a relatively solitary one. Our central contribution of, therefore, is to bridge the literatures on entrepreneurial outsidership and entrepreneurial embeddedness (Jack and Anderson, 2002), and to illustrate that – far from being conceptual opposites – outsidership and embeddedness are deeply intertwined.

Linking this premise to the context of poverty and informality yields our second and third contributions, both of which pertain to the literature on entrepreneurship in developing world or BoP settings. Our second contribution is to provide much-needed insight into the heterogeneity of entrepreneurship in such contexts. Subsistence markets are often said to be characterised by the proliferation of informal micro-businesses which are virtually identical in their commercial offering, but there remains a broad consensus that underlying entrepreneurial processes are much more heterogeneous than extant research suggests (Dencker et al., 2021; Weber et al., 2022). In this article, we examine not only the ways in which entrepreneurship is embedded in our study community but also the ways in which it is embedded within various fragments of that community’s internal structure. In so doing, we explore different conceptualisations of community (Bacq et al., 2022) and consider how different notions of community emerge and interact. Our third and final contribution is to draw attention to the acute vulnerability of those for whom collective outsidership is compounded by individual outsidership, that is, those that do not perceive themselves to be embedded in any kind of relational network that might afford them some measure of economic security. Prior research in poor and informal contexts has emphasised how interpersonal networks and an overarching spirit of collectivism play an important part in attenuating the immense precarity that pervades people’s economic lives (Shepherd et al., 2021). Although our data lent some support to this view, it also suggested a need for researchers to theorise solidarity in a more nuanced way, and in a way that more effectively captures the often partial and contingent nature of solidarity amongst entrepreneurs (and between entrepreneurs and their wider community) (Bähre, 2007; Molyneux, 2002). Solidarity, mutuality and goodwill are rarely distributed evenly across societies or other social collectives (Fafchamps and Lund, 2003; Foster and Rosenzweig, 2001), and it is important that researchers and developmental practitioners avoid the simplistic (if morally appealing) assumption that generalised norms or proclamations of togetherness translate into an economic safety net upon which all members of a community can rely to a more or less equal extent. Within poor and marginalised communities, as within communities of other socioeconomic status, cliques, rivalries and patterns of interpersonal exchange serve to make insiders of some and outsiders of others. Understanding how entrepreneurs navigate outsidership within social contexts that are themselves socioeconomically peripheral is vital in our wider efforts to unpackage the role that entrepreneurship plays in alleviating poverty and vulnerability.

Theoretical background

The uneven distribution of economic development in the past 30 years or so has brought improved living standards to more than one billion people in Asia, Latin America and Eastern Europe, whilst causing another billion plus people, most of whom live in Sub-Saharan Africa, to become increasingly disadvantaged (Collier, 2007). Within 10 years, 9 out of 10 people in extreme poverty will live in Sub-Saharan Africa (World Bank, 2019), with ‘the urbanization of poverty’ (Ravallion, 2002) continuing to spawn pockets of acute economic disadvantage in larger cities. More than three-quarters of adults living in Africa’s urban centres earn a living from the informal economy ¹ ; of that number, more than half are self-employed (ILO, 2018). In general, informal entrepreneurs operating in developing world cities live deeply precarious economic lives. The overwhelming majority of informal enterprises are small in size, with many operating in ultra-congested markets characterised by low levels of differentiation, strong reliance on local knowledge and resources and exposure to a wide array of environmental shocks (Alvarez and Barney, 2014; Morris et al., 2022). At the same time, informality allows for the circumvention of typical barriers to market entry such as the costs and bureaucracy that accompany new-business registration, meaning that it provides a critical ‘in’ for those living in subsistence contexts (Danquah et al., 2021; Khavul et al., 2009). Indeed, informal businesses can achieve varying grades of economic success (de Mel et al., 2008; Kodithuwakku and Rosa, 2002), with some providing levels of security and prosperity that may be modest in absolute terms, but which compare favourably to typical returns to wage employment (Gindling and Newhouse, 2014; Sarkar et al., 2018; Weber et al., 2022).

Contexts in which economic informality is prevalent are often understood through the prism of ‘institutional voids’ (Mair and Marti, 2009; Webb et al., 2020), owing on the one hand to the absence or ineffectiveness of formal institutions within those settings, and on the other, to the elevated role played by informal institutions – like norms, values and customs – in regulating economic and social exchange (Acquaah, 2007; Mair et al., 2012; Puffer et al., 2010; Williams and Vorley, 2014). For this reason, high levels of social embeddedness are usually seen as characteristic of informal entrepreneurship (Khavul et al., 2009; Kodithuwakku and Rosa, 2002; Viswanathan et al., 2010); informal entrepreneurs depend to an even greater extent than their formal counterparts on personal contacts for resources since they often cannot obtain resources through official channels like banks and state bodies (Barrios and Blocker, 2015; Honig, 1998; Imas et al., 2012; Valliere and Peterson, 2009). Driven by internal patterns of repeated reciprocal exchange and by the participant’s marginal status in the wider economy, informality can inculcate collectivistic, ‘us-and-them’ values that promote strong internal solidarity (Lee and Hung, 2014; Peredo and Chrisman, 2006; Portes and Sensenbrenner, 1993; Webb et al., 2009).

Shepherd et al.’s (2021: 365) account of how entrepreneurs in the slums of Mumbai and Delhi relate to their community provides a vivid illustration of how this looks, and what it means, for entrepreneurs in operating in acutely marginalised contexts. They highlight that ‘a common theme for enabling slum entrepreneurship was the strength of the community [. . . which] appeared to be developed, fostered, and maintained by the nature of the slum’s harsh living conditions’, most notably the poor-quality and high-density housing that characterises slum settlements. For entrepreneurs in the slums, this strong community ethos found expression in co-operation and in the sharing of information and resources; although this ‘caring orientation’ did not fully offset the wide-ranging difficulties that entrepreneurs faced, it was nevertheless essential for the viability and longevity of micro-enterprises. Similarly, Weiss et al. (2024) highlight the centrality of entrepreneurial solidarity to the practice of ‘survivalist organising’, while across the wider literature on entrepreneurship in BoP settings, we see reference to an array of indigenous concepts that encapsulate the selflessness, social belonging and collective agency that serve as the sociocultural framework for this kind of solidarity; faena (referring to the communal unsalaried work in which residents of Andean villages have habitually engaged for generations), harambee (the grassroots rallying cry of ‘lets pull together’ that was popularised in post-independence Kenya) and ubuntu (an idea of South African origin that denotes a feeling of absolute one-ness with a social group) are some examples (Peredo, 2003; Vershinina et al., 2018; Zoogah et al., 2015).

Taken together, this body of work provides a strong affirmation of the importance of solidarity in enabling entrepreneurial activity in subsistence contexts. However, solidarity is underpinned by complex relational and institutional dynamics which remain poorly understood. Whilst much is made of the potential for outsidership to engender solidarity – where those on the socioeconomic periphery come to identify as a collective that is bound by a shared struggle – far less attention has been paid to the potential for solidarity to engender outsidership. This is a deeply problematic oversight, since social boundaries are an inherent property of solidarity, and outsidership is an inherent property of social boundaries. If solidarity is to be taken as a key facet of entrepreneurial practice in developing contexts, it is important that we take seriously the notion that solidarity can be both a consequence and a cause of economic outsidership. Limited attention has been paid, for example, to the fact that informal institutions can perpetuate hierarchies of status and power which result in the (often unseen) exclusion of particular individuals and groups (Webb et al., 2020). For example, in strongly patriarchal societies, women may not enjoy the same range of economic freedoms as men, meaning their efforts at entrepreneurial venturing often do not garner the support of friends and family members or of society at large (Essers and Benschop, 2009; Haugh and Talwar, 2016). This does not dispel the notion that solidarity is important – indeed, research on women’s entrepreneurship in patriarchal societies illustrates the potential for solidarity networks to form at the margins of what are themselves marginalised communities (Datta and Gailey, 2012; Schindler, 2010) – but it forces us to consider where the boundaries of that solidarity might lie, and what it may mean to be an ‘outsider’.

It also forces us to consider the manner in which solidarity might be – or could be – expressed. Whilst members of a chronically deprived community may feel a strong sense of affinity towards one another, material assistance (in the form of loans or gifts, e.g.) tends to flow more freely within tight-knit network clusters such as close friends or extended families than within communities at large (Fafchamps and Lund, 2003; Khavul et al., 2009). This is, first and foremost, a question of material constraints: severe poverty places relatively firm limits on how, and with whom, people express solidarity (Park, 2006). It is also a reflection of the extent to which people feel bound by social expectations, which is in turn contingent on the range and efficacy of the sanctions through which such expectations are enforced. In small, stable communities with firmly established patterns of reciprocity, the potential consequences for defaulting on one’s economic or social obligations may be far more severe than in a larger or more transitory setting with lower levels of interdependence. Studies on the so-called ‘paradox of embeddedness’ (Uzzi, 1997), which call attention to the suffocative effects that social expectations can have on small businesses in poor settings – as prosperous business become ‘welfare hotels’ (Portes and Sensenbrenner, 1993: 1339) for those struggling financially – suggest that outsidership might, in fact, enable business growth by mitigating overembeddedness, and therefore, diminishing the salience and potency of solidarity norms.

Overall, prevailing notions of solidarity, at least within the entrepreneurship literature, conceive of it as a public good, that is, as a property of a social group which is accessible in more-or-less equal measure to all members of that group. Even within the small body of research that has considered the possibility that overembeddedness might yield a dark side to solidarity (Slade Shantz et al., 2018; Wincent et al., 2016), it is generally assumed that solidarity norms are clear, consistent and ingrained in the everyday social intercourse of community life, including the practice of entrepreneurship. In reality, solidarity is fluid, patchy and deeply situational. Bähre (2007: 52) writes that solidarity ‘is the conflict about the parameters of inclusion’ and thus, is predicated on negotiation, rivalry and ambivalence as much as it is on collectivism and mutuality. Accordingly, the lens of outsidership has the potential to enrich our theoretical understanding of the role that solidarity plays in enabling (and constraining) entrepreneurship, particularly in poor and marginalised contexts.

Methodology

Data collection

During two separate rounds of dedicated fieldwork – the first lasting three months and the second lasting six weeks – the first author made daily visits to the slum, spending over 530 hours collecting primary data through a diverse set of ethnographic techniques, including unstructured and semi-structured interviews, focus groups, and nonparticipant observation (Hammersley and Atkinson, 1995). As Altheide and Johnson (2011: 591) write, ‘[a] key part of the ethnographic ethic is how we account for ourselves’. In ethnography, positionality – ‘who we are’ whilst in the field, and the relationships that we have with research participants – impacts on how we are perceived, the participants we have access to, and ultimately, the data we gather and the knowledge we claim (Heyl, 2001). In Table 1, we draw from Brewer (2000: 132) to provide a critical and reflexive account of how this research, both in its formulation and execution, was influenced by the fieldworker’s positionality. Since this research will largely be consumed within a cultural context that differs markedly from that in which it was created, this section also serves as an opportunity to identify and scrutinise particular cultural ideologies that were challenged in the course of this research.

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Table 1.

An overview of key positionality considerations as they pertain to the present study.

Element	Leading assumptions	Influence on research formulation/execution	Other notes
Business school background	Entrepreneurship is good, can be a means of escaping/alleviating poverty	Assumption that entrepreneurship can be effective in alleviating poverty was a key motivational factor for the research.	Fieldwork challenged the assumption that escape from poverty was necessarily seen as the objective of entrepreneurship, and that entrepreneurs had to exhibit constant creativity in order to survive; instead, the importance of routing and stability was much more apparent.
Pursuing an ‘emic’ (insider) perspective	The assumption that there is a monolithic or unitary ‘insider view’ was not carried into fieldwork; nonetheless, the diverse array of perspectives and processes with which people approached entrepreneurship was somewhat surprising.	The importance of qualifying claims of emicism with the caveat that no singular form of entrepreneurship exists, even in an apparently homogeneous context, became increasingly apparent.	Wolcott (2008: 147) calls this ‘the ultimate conceit of fieldwork’ and introduces the concept of ‘soft eticism’ as a substitute for emicism.
Inability to help research participants	Not applicable	During fieldwork, the fieldworker was variously perceived as a developmental professional, employment provider, business expert, advocate for the community and Santa Claus figure. Occasionally, prospective informants were passed over if it appeared that their expectations regarding his presence were out of sync with the reality of it.	Resources designed to clarify his purpose, such as Informed Consent Forms or Plain Language Statements were of limited value, and it was only with the passage of time and repeated explanation that these ambiguities were cleared.
The choice to conduct this research in an immersive way, which involved the fieldworker walking around the community, eating there, interacting with locals, etc., almost always unescorted.	Not applicable	Almost all informants remarked that they appreciated the fact that the fieldworker had approached the study in this way. One informant drew a comparison between this approach and that employed by another (Kenyan) researcher, who knocked on his door, proceeded to ask him a series of questions, and then left. Our informant noted that the answers that he gave to this researcher were not guided by fact, but by how quickly he could get the researcher to go away.	Not applicable
Being an outsider to the research setting (white, educated, relatively wealthy).	That the fieldworker’s status as an outsider might make informants reluctant to divulge important or personal information.	Local informants, for the most part, exhibited a remarkable willingness to discuss sensitive topics, and frequently divulged personal information with little prompt.	Divulging personal information was always a two-way street, and participants routinely questioned the fieldworker about his own background and circumstances. Topics included his income, marital status/intensions, and how much he paid in rent for his shared apartment in Nairobi, frequently dominated conversations at the expense of entrepreneurship-related topics.
Language	Not applicable	English and Swahili are the national languages of Kenya, and most Kenyans speak both (as well as at least one other ‘tribal’ language) fluently. However, some of the slum’s older residents did not speak English well and, because the fieldworker did not speak Swahili, he could not converse with them.	The fieldworker experimented with the use of a local translator, but found this to be an impediment to the development of rapport and the free flow of conversation which is important in ethnographic interviews. Therefore, our sample is limited to informants that were able to speak English. Since most interactions between locals were conducted in Swahili and English was not especially useful in the everyday course of business, it is unlikely that this introduced any meaningful bias into our sample.
Gender	Gender would not impact significantly on participant recruitment.	In practice, being male (coupled with being an outsider) made it more of a challenge to recruit female participants. Since participants were mostly retained for the entire duration of fieldwork, the fact that most of my early informants were men means that, even if our sample was approximately balanced, the majority of our actual research interactions were with men.	As it became evident that the gender imbalance in our early stage sample was systematic, we sought the help of a female friend who lived locally. By accompanying the fieldworker on visits to the research community, she gave women who were perhaps reticent to speak directly to him the opportunity to find out who he was and what he was doing by speaking to her instead. This directly facilitated the recruitment of two of our female informants.
Developmental experience in the community (some years prior to earlier, and during the data collection period, the fieldworker provided assistance in two local schools).	The fieldworker’s prior contacts could be leveraged to help identify and recruit participants in the early stages of fieldwork.	The fieldworker’s relationship with local organisations in fact proved of limited use in identifying participants; however, it did serve to legitimise his presence in the community, since he was not only a researcher (which was an unfamiliar role for many of our participants), he was also a volunteer (which was a much more familiar role, particularly for an outsider).	Assisting at these two schools also served as an avenue for the fieldworker to ‘give back’, in which benefits were not concentrated on the small number of people that we were studying (which would have been ethically sensitive), but were more broadly spread.

Having identified Mukuru as an appropriate study setting, partly on the grounds that prior research has neglected contexts characterised by such entrenched poverty and marginalisation, it made greater logical sense to sample primarily for ‘similarity’ than for ‘difference’ (Gobo, 2004: 445). Along these lines, the empirical sample was not purposefully composed of cases which exhibited marked difference from what might be considered ‘the norm’ for communities of this kind, meaning, for example, that we did not focus exclusively on high-performing entrepreneurs or entrepreneurs that in some way sought to leverage new technological possibilities. Although such ‘extreme’ or ‘deviant’ cases (Flyvbjerg, 2011) were included as a means to explore what entrepreneurship can do in such settings, they were viewed as being peripheral to the majority of cases which illustrated what entrepreneurship actually does. Thus, sampling procedures pursued the ‘emblematic case’ (Gobo, 2004: 449), which is concerned with the typical case rather than the deviant case. This represented a critical design choice which enabled the study to address mounting calls for entrepreneurship research, in both established and non-traditional contexts, to focus less on the ‘gazelles and unicorns’ of the discipline, and more on the ‘cows and horses’ that in fact make up its vast majority (Welter et al., 2017: 313; see also Hjorth and Steyaert, 2004; Imas et al., 2012; Watson, 2013). The process of recruitment itself was often opportunistic, with snowball techniques – where interviewees are identified and recruited with the assistance of other interviewees (Noy, 2008) – used occasionally but sparingly. For the most part, initial contact with interviewees was organic or serendipitous; in some cases (e.g. Francis, Simon), entrepreneurs would beckon the fieldworker as he walked past their businesses, and inquire about his background and the reason for his sudden appearance in their community; in others, like that of Peter, a barber, the fieldworker began as a customer; a small number of entrepreneurs were known to the entrepreneur through his work as a volunteer at a local school some years prior.

Defining a clearly bounded ‘sample’ is often difficult in ethnography: in the course of the four and a half months that he spent in Mukuru, for example, the fieldworker met with countless micro-entrepreneurs, and it would be impractical – indeed, impossible – to list each one. Instead, we provide summary information only for the entrepreneurs that we cite directly in our analysis, all of whom engaged in multiple, recorded interviews and became relatively well known to the fieldworker (see Table 2).

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Table 2.

Study participants.

Pseudonym	Business	Gender	Age
Francis	Tailoring and selling men’s clothes	M	49
Lawrence	Selling charcoal	M	32
Sarah	Women’s hair salon	F	Early-30s
Ade, Musa, Martin, Abdul, Isaac, Dominic, Charles	Car wash service and delivery of goods by handcart	M (all)	17–26
Kathy	Selling over-the-counter medication and beauty products	F	22
Thomas	Selling household utensils (e.g. plates, cutlery, basins)	M	25
Joseph	Jeweller/artisan	M	50
Simon	Selling sugarcane	M	25
Victoria	Selling assorted small goods (cutlery, shoe polish, toiletries, stationary)	F	Late-30s
Damaris	Selling OTC medication and beauty products	F	35
Abraham	Selling second-hand t-shirts	M	Mid-30s
Peter	Barber, selling small hardware products, owns a ‘casino’ (seven slot machines)	M	35
Samuel	Selling potatoes and second-hand shoes	M	Early-30s
Bella	Selling second-hand women’s clothes	F	Early-30s
Mark, David, Michael	Provides basic computer services	M	25, 25

Individual research interactions ranged in duration from a couple of minutes (an informal chat in passing) to a full working day. Interviews and conversations with a broad array of local actors, including NGO representatives, community leaders, and countless other Mukuru residents, lent added richness as well as an important breadth of perspective to our core data (see Table 3). The final corpus of primary data consisted of 264 pages of single-spaced, typed interview transcripts and 150 pages of typed fieldnotes.

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Table 3.

Breakdown of data collection techniques.

Data collection technique	Application and general purpose	Number of instances	Method of capture
Casual conversations	- Quick conversations (<10 minutes) as Fieldworker passed their stall/premises. - Vital in building a tacit understanding of the everyday ‘ups and downs’ of entrepreneurship in the slum.	Innumerable (across 98 days of field visits)	Contact summary sheet (adapted from Miles and Huberman, 1994) and field diary, written up each evening
Nonparticipant observation	- ‘Hanging out’ for an extended period of time with interviewees as they went about some of their routine duties (e.g. cutting fabric for tailoring, hairdressing, purchasing stock at city-centre markets, or simply waiting idly for passers-by to show and interest in their stock). - Conversation during these interactions was generally wide-ranging but served the dual purposes of building trust and uncovering important aspects of the informant’s social or entrepreneurial experience that would otherwise have gone unmentioned.	53
Unstructured interviews	- Opportunistically exploiting a window of time during which the Fieldworker had an informant’s undivided attention to ask unscripted questions about their business, their background their community, etc.	102
Semi-structured interviews	- Developed pre-prepared questions based on themes that emerged and observations made during everyday interactions with informants. - Deployed sparingly, as higher level of ‘formality’ and demands on interviewees’ attention risked disruption to rapport.	47 (1–3 conducted with each informant, typically 20–40 minutes long)	Electronically recorded
Non-core informants	For additional breadth of perspective, semi-structured interviews were conducted with development specialists and other community activists (four, all of which were electronically recorded). At the invitation of various locals, I also visited several churches, schools and homes, assisted with a vocational training programme run by a local NGO, and spoke with countless Mukuru residents outside of our core sample (observations were captured by way of field diary).

Findings

How do entrepreneurs operating in BoP contexts navigate the insidership–outsidership duality that stems from being embedded in a community that is itself acutely marginalised? We begin our analysis with a brief illustration of what we mean by an insidership–outsidership duality, and how this was manifest in the study community.

Mukuru’s marginal economic status meant that living conditions for its residents were characterised by a set of shared hardships that were remarkable in both their intensity and their range. The community was poorly served by infrastructure and state services and was characterised by social problems such as widespread unemployment, deficient housing and sanitation facilities, highly variable standards of education provision, single parentage and increased mortality. Unsurprisingly, this fostered a sense of economic and political outsidership.

Mukuru itself, it is a void. And it is a void because [. . .] Kibera is the biggest, the largest and the most wonderful, [it] wants to be the most wonderful slum in the world [laughs] . . . but Mukuru is this place where everybody thinks there should be work, everybody thinks there shouldn’t be a slum because it’s in the middle of an industrial area. [. . .] But it doesn’t happen. And for whatever reason, I dont know, but it doesn’t happen. But we are just ignored because the voice here is the industry. – Non-core interviewee (development worker)

When I was small I was thinking, ‘Ah, Nairobi is a very good place to stay.’ When I came here I was asking, ‘Is this place [really] Nairobi?’ Because you look [at] this [neighbourhood], even our [rural] homes are not like this. No toilets, you rent a house without toilet, without a bathroom . . . The people who stay in estates, those are the ones that can say ‘I stay in Nairobi’, but in this [community] you can’t talk. – Bella

The idea of an insidership–outsidership duality is predicated on the idea of collective outsidership, which is one that came to the fore in our analysis. We use the term collective outsidership to highlight that the perception of being economically and politically excluded was – somewhat paradoxically – a deeply unifying sentiment. Markers of the community’s disadvantage were so ubiquitous and salient that outsidership was accepted as a defining feature of the community’s shared conception of ‘who we are’. In this respect, outsidership went hand-in-hand with a sense of belonging to a readily delineable social collective.

You do not need to believe [everything you hear about Mukuru]. Come by yourself and see. Experience is the best teacher. Don’t judge a book by its cover, you just come and see for yourself. – Musa

People of Mukuru are not like people of other places. When it comes to things like elections, I haven’t seen Mukuru people fighting, but [in] other places you can hear that boys have been shot, that people are fighting. But in Mukuru I have never seen anything like that. – Dominic

You know, police they are there, tomorrow they will not be there. But Chief, we determine the Chief because he is a long-lasting person in the community. [. . .] Chief is trusted more than the police. Chief is someone who will determine if you will stay here or you will move. When chief says, ‘This guy, I don’t want him in my area, he’s not a good guy’, you have no alternative. Leaving. Because Chief, the government understands Chief most than other people. Chief talks the truth. But the police will just chase you today, chase you tomorrow. But they will not be there [for long]. – Simon

As these comments illustrate, the territorial boundaries of the slum enclosed a social world which – in the mind of community members – looked, sounded, and worked very differently to what existed on the outside. The implications for entrepreneurship are clear in the extent to which the institutions – the ‘rules of the game’ (North, 1990) – that set the parameters for ‘normal’ or ‘acceptable’ entrepreneurial practice differed from those of the wider environment. This institutional incongruity was most visible in the prevalence of informal entrepreneurship.

If you open a business in Kibera [another slum in Nairobi], even if it is small . . . you must pay 50 shillings per day. And here, they don’t pay. You don’t pay anything, just open business and continue. . . . Here if you open a business, even if you want to [sell] sweets outside there, they don’t care. Nobody will ask you. – Sarah

Do you know if you come here, like you, you want to put a business here, nobody comes [to see your registration]. – Francis

This is a slum. A slum cannot be, the government cannot be so strict. – Peter

Whereas paid employment was generally accessible only if one had the right contacts or upon payment of a bribe, informal entrepreneurship was virtually barrier-free. As such, it was widely relied upon to provide for basic household needs, and as a backstop against destitution. At an individual level, informal entrepreneurship was routinely framed as an economic imperative. More importantly, at an institutional level, the ‘right’ to engage in informal entrepreneurship was framed as a moral imperative, insofar as it constituted a ‘levelling of the playing field’ – a way for those at the very margins of society to claim the baseline measure of economic security that was not afforded them by the State.

If they [the authorities] were competent, we would pay tax. – Francis

How can you come and tax someone that is selling sukuma wikki [cabbage], Unga [corn flour], these small small things. You want 50 bob [50c] and maybe he earns like 150 [$1.50] a day. So if you take 50 bob it’s like you’re killing him. – Michael

While the de facto right to operate informally may have been grounded in outsidership, it was the specific conditions of collective outsidership that enabled and empowered people to assert that right whenever it came under serious challenge. This is illustrated powerfully by the contrast in the way that entrepreneurs operating within and outside the slum interacted with local officials and other agents of the State. The extract below, taken from the first author’s fieldnotes, documents his experience of eating lunch at one of the slum’s hotelis (small, outdoor eateries) when word circulated that a city council official was in the area to check the trading permits of local businesses.

Word of their presence spread in a chain from hoteli to hoteli all the way down to us. [The proprietor] started packing things away hurriedly, and soon she picked up my half-finished plate and told me to move along. Once she hid the food she hid herself, leaving the pots with beans and rice and ugali steaming at the side of the road. Walking past all of the other hotelis between there and Kobil, every single one had been deserted. – Extract from fieldnotes

In the interior of the slum – on what community members saw as ‘our turf’ – evasion tactics such as these gave way to much more confrontational and forceful forms of resistance.

There was a time when the Kanjo people came here to register all the businesses and people started to throw stones that them. So they said, ‘Hey, we cannot go there’. – Ade

Kanjo are so afraid of this place! They don’t come, they don’t come. – Samuel

Outsidership – and specifically the collective outsidership that was the basis for the insider–outsidership duality at the heart of our research question – therefore helped to legitimise a set of institutional arrangements that were particular to the local setting of the slum. Although the context was inhospitable to entrepreneurship in many important ways (e.g. the acute shortage of financial and material resources, infrastructural deficits, etc.), the predominance of informality served a clear enabling purpose; namely, it allowed ‘insider’ entrepreneurs – those belonging to and operating within the community in question – to circumvent the costs and bureaucracy associated with formalisation and to start trading with very limited stocks of financial capital.

Discussion

Outsidership is typically framed within the entrepreneurship literature as a liability to be overcome, or as an asset to be leveraged (Baron et al., 2018; Li and Fleury, 2020; Pidduck and Clark, 2021; Schweizer, 2013; Stoyanov et al., 2018). Implicit in this view is a conceptualisation of outsider entrepreneurs as atomistic, aberrant outliers and of markets as enclosed places of opportunity which are characterised by rigid institutions and by consistent patterns of internal exchange. This paper is guided by the idea that outsidership can be a collective as well as an individual state, and by the corollary that if outsidership is a collective state, outsidership and insidership ought to be treated as a duality rather than a dichotomy. Under this view, the question shifts from ‘how do entrepreneurs overcome/leverage their status as outsiders?’ to ‘how do entrepreneurs navigate the insidership/outsidership duality?’ We present this not as an abstract or purely theoretical idea, but as one which we believe could serve as an illuminating lens through which to study entrepreneurship in contexts that are chronically and systematically marginalised. In their seminal work on social identity theory and intergroup behaviour, Tajfel and Turner (1986) posit that individuals who belong to low status groups – that is, outsiders – can improve their circumstances in one of two ways. The first is through social mobility, where the goal is to move from the lower status group to a higher status group. Drawing on the writing of Hirschman (1970), they relate the idea of social mobility to that of the American dream: ‘The successful individual who starts out at a low rung of the social ladder, necessarily leaves his own group as he rises; he “passes” into, or is “accepted” by, the next higher group. He takes his immediate family along, but hardly anyone else (pp. 108–109)’. The second is through social change: here, the intention is not to move from a low status group to a higher status group, but rather to bring about a narrowing or an inversion of the status differential between the groups, typically through some form of collective action (Haslam and Ellemers, 2005; Rao et al., 2003).

We see the premise of an insidership/outsidership duality as a means to more effectively sensitise future work on entrepreneurial outsidership to two foundational ideas of social identity theory. The first of those ideas is that the state or condition of outsidership is not one that is necessarily characterised by lower levels of embeddedness or social belonging; rather, the outsider entrepreneur is generally an outsider only to the extent that the social group to which s/he belongs lack status and power. Second, in their efforts to improve their economic circumstances or achieve some measure of personal fulfilment, it is likely that outsider entrepreneurs will choose to (or perhaps need to) marry aspects of social mobility and social change strategies (DeClercq and Voronov, 2009; Mair et al., 2016). This may be particularly true in the context of ‘institutional voids’ (Mair and Marti 2009; Webb et al., 2020), where extreme persistent poverty might incentivise social mobility, but where the norms, values and networks that are relied upon to regulate social and economic exchange may make the notion of individual mobility problematic. We observed how shared or collectivistic notions of outsidership accreted into a set of institutional arrangements that deviated fundamentally from the mainstream, and that were valued for their role in enabling the kind of informal micro-entrepreneurship that provided an economic lifeline to a large portion of the community’s residents. In this way, outsidership was used as a way to justify or legitimise informality (Webb et al., 2009), and the sense of solidarity to which collective outsidership gave rise found expression in a desire to preserve this institutional status quo. However, enabling institutions such as these tend to be accompanied by ‘levelling pressures’ (Portes and Sensenbrenner, 1993: 1342), where, ‘as long as everyone is relatively equal, entrepreneurs can “afford” to be a-competitive. However, as soon as someone appears to become significantly more successful, jealousy and competitiveness ensue’ (Slade Shantz et al., 2018: 430).

Our observations also made clear that the insidership–outsidership duality was a multi-dimensional one. Insidership ‘entitled’ community members to engage in entrepreneurship on a purely informal basis, but it did not entitle an entrepreneur to any kind of material assistance from their peers or wider community, even if their venture was drifting towards collapse. Material assistance of this kind tended to be accessed within pockets or fragments of community, where the parameters of insidership were entirely different. These parameters, and the interpersonal obligations that were predicated on them, can be understood as an approximation of the sociological dichotomy between universalism and particularism (Parsons, 1951/1991). Universalism reflects the view that rules, standards and norms are (or should be) applied in a way that is impartial and indiscriminate, such that one person’s moral obligations to another are not contingent on whether they are known to one another, or whether they have an affinity of one kind or another. Particularism, on the other hand, stresses the role of social affinity in guiding social action, positing that people are likely to treat one another more favourably if they share some kind of positive affinity. Although prior work has tended to treat the two as mutually exclusive (Leavitt et al., 2012), universalism and particularism were both discernible in our findings – universalism in the propensity of community members to respond violently to efforts by the City Council to tax local enterprises (irrespective of the specific entrepreneur being targeted), and particularism in the clear reliance on relational and identity-based networks (ethnicity, age, gender, etc.) for material support. The co-presence of these contrasting social orientations, and the distinct role that each one plays in enabling entrepreneurship, illustrates that insidership and outsidership can interact and intersect across different levels of analysis.

Our findings also highlight how an overemphasis on the inclusivity (or universality) of solidarity norms may lead to the acute vulnerability of some entrepreneurs being overlooked. An analogy might be made here to Penrose’s (1959) ‘interstices’, a term that she famously used to describe the market gaps that exist as a residual by-product of large firms not having the capacity or the inclination to pursue all available avenues for growth, and into these gaps step small (new) firms. Such interstitial spaces, as they might relate to our findings, are not so much spaces of opportunity as they are the ‘cracks’ that become visible when we recognise that communities are a confluence of disparate identity groups as well as distinct social collectives in their own right. Our findings highlighted not only that entrepreneurs, in their resourcing practices, tended to see the community as a relatively fluid aggregation of identity groups – ethnicity, gender, shared interests and so on – and that it was within these groups that solidarity networks tended to emerge, but also that some entrepreneurs felt that any solidarity norms that might exist within these structures were closed to them. Despite being community insiders, these entrepreneurs found themselves in the interstices – that is to say, they fell through the cracks – of the solidarity structures that are often considered to be characteristic of contexts of deep informality.

For the field of development studies, our findings suggest that efforts to reach the so-called ‘poorest of the poor’ should be informed by a more nuanced understanding of the role that social capital plays – or sometimes doesn’t play – in enabling entrepreneurship in BoP contexts. It has been noted that – although much has been written about the solidarity and collectivistic ethos that often prevails in poor and marginalised settings – far less has been written about ambivalence, rivalry and exclusion, all of which are inevitably manifest in and around the boundaries of that solidarity, and all of which could play just as significant a part in the social and economic lives of the poor (Bähre, 2007). For example, the proliferation of microfinance – designed to promote small-scale enterprise as a vehicle for poverty alleviation in the developing world, and among the most heralded social innovations of the last quarter-century (Roodman, 2012) – has been predicated heavily on the existence and cohesiveness of such solidarity networks. This can be seen from the centrality of borrower groups and joint liability to its classic operating model (Banerjee and Jackson, 2017; Rankin, 2002). In pointing out that ‘comparatively little attention has been paid to situations where social solidarity is weak’, Molyneux (2002: 178) observes that, by failing to properly grasp the nuances of solidarity, developmental interventions such as microfinance have sometimes forced people to co-operate and support one another even when there has been no meaningful history of – nor, indeed, appetite for – collective action or reciprocity between them.

Conclusion, limitations and future research

This study proceeded from the idea that our understanding of entrepreneurial outsidership could be meaningfully advanced if we were to re-imagine the insider–outsider dichotomy as a duality. We examined how entrepreneurs operating in a socioeconomic context that was profoundly marginalised cultivated and capitalised upon the solidarity that derived from collective outsidership. From an empirical perspective, we sought to provide much-needed insight into the heterogeneity of entrepreneurship in such contexts. Subsistence markets are often said to be characterised by the proliferation of informal micro-businesses which are virtually identical in their commercial offering, but there remains a broad consensus that underlying entrepreneurial processes are much more heterogeneous than current research suggests. In this article, we examined not only the ways in which entrepreneurship was embedded in our study community, but also the ways in which it was embedded within various fragments of that community’s internal structure. In so doing, we also drew attention to the acute vulnerability of those for whom collective outsidership is compounded by individual outsidership, that is, those that did not perceive themselves to be embedded in any kind of relational network that might help to mitigate the immense precarity of their economic lives.

This study has touched upon the temporal changes that communities, particularly those at the vanguard of macro demographic shifts like urbanisation, are subject to, and the bearing that this can have on entrepreneurs and entrepreneurship within them. Such tumultuous social conditions are fertile ground for the emergence of new organisational forms (Hsu and Hannan, 2005), and it is almost certainly the case that these divergent organisational forms bear the imprint of several aspects of the reality of disenfranchised urban populations. A deep dive into this topic was beyond the scope of the present study, but our data and field observations hinted at a considerable depth of insight that has yet to be tapped. The structure and composition of these alliances served to highlight the social upheaval that urbanisation can engender. Young people, often with little or no familial guidance, begin to encounter the harsh economic imperatives of slum life from a young age, and are forced to develop coping strategies with the limited set of tools (human, financial, social capital) at their disposal. It is vital, however, that scholars contextualise these economic imperatives within the broader set of needs – the need for self-esteem and self-expression, the need to feel a sense of belonging, the need to feel physically safe – that all humans are inherently subject to. This would suggest a pressing need to depart from the widespread fixation with bottom-line profits, and a more general embracing of the possibility that, even where poverty is rampant, the goal of profit maximisation vies for supremacy with other, more social, objectives that do not sit within the economic sphere.