Entrepreneurship Out of Shame: Entrepreneurial Pathways at the Intersection of Necessity,Emancipation,and Social Change

First-person experience of shame: Shaming triggers internalized feelings of shame

People may be shamed by others because of who they are or what they do, which we label a “first-person experience of shame”—a “negative evaluation of their global self” which is seen as somehow “defective” or “discredited” (Tangney et al., 2007, p. 349). For example, people who were past terrorists or engaged in criminal activity face denigration from society for their past behaviors (Chandra, 2017); individuals with mental illness at work have been shamed for being “weak” and less capable (Elraz, 2018), and those who come out as lesbian, gay, bisexual, transgender or queer (LGBTQ+) can experience shaming from religious institutions that define homosexuality as an “abomination” (Creed et al., 2010). As we illustrate at the top of Figure 1, shaming—or what we call “first-person experience of shame”—can take many forms, from insults and violence to exclusion from the labor market (Ajunwa & Onwuachi-Willig, 2018; Goffman, 1963; Pescosolido & Martin, 2015; Rüsch et al., 2014; Western et al., 2015).

Many who directly experience shaming come to feel shame and internalize the negative views that have been cast. Feelings of shame can cause withdrawal, aggressive behaviors, and maladaptive identity outcomes, such as self-blame and self-doubt (Sheikh & Janoff-Bulman, 2010; C. A. Smith & Ellsworth, 1985; Tangney et al., 2007). Indeed “feeling shame triggers a deluge of painful consequences” (Kwon, 2016, p. 67). Specifically, the shame associated with being excluded from social interactions and work opportunities can lead to an “emotional spiral” (Scheff, 1990, 2007). When emotions escalate, they can begin to damage one’s self-worth, as well as one’s belief that one can alter these negative evaluations. These negative emotions can thus have dampening effects on entrepreneurial action by fostering or reinforcing feelings of helplessness, and a perceived inability to change the status quo (Doern & Goss, 2014). Accordingly, direct and personal experiences of being shamed can lead an individual to internalize feelings of shame (mechanism (1a), Figure 1). This “felt shame” translates into self-perceptions of failing to meet societal expectations. Felt shame often leads to feelings of helplessness (mechanism (1b) in Figure 1), which impedes action, including entrepreneurship.

Third-person experience of shame: Connecting to a collective identity

Individuals are embedded in the social world and, even though they may be shamed as an individual (e.g., for being a sex worker), there are often others who are similarly shamed for the same attribute or behavior (Ashforth & Kreiner, 2014; Ashforth, Kreiner, Clark, & Fugate, 2007). When one has the opportunity to witness, and connect with, similarly shamed others by hearing their stories (mechanism (2), Figure 1), individuals may have what we call a “third-person experience of shame.” Through this experience, an individual becomes aware of the shaming, and the resulting suffering, experienced by similarly shamed others. In this case, shame comes to be understood as a shared, collective experience taking place beyond oneself.

A third-person experience of shame requires opportunities to witness or connect with others being shamed. J. C. Scott (1990) found that clandestine communication that took place in paddy fields, kitchens, and hidden corners of villages (i.e., safe spaces away from power) resulted in the development of a “hidden transcript” that allowed peasants to realize the collective nature of the injustice they faced. While in the time of J. C. Scott’s (1985) seminal peasant resistance it was often difficult to find ways to connect with others, in an age of open and widespread information technology such opportunities are now more commonplace. For instance, on RuPaul’s Drag Race, a famous reality competition television show, many participants recount how they felt alone in their shame when they were stigmatized over their sexual orientation throughout their lives. One of the show’s accomplishments is that it allows people globally to witness how others have been shamed for similar reasons (i.e., their gender expression) (Campana, Duffy, & Micheli, 2022). This also happens more frequently now over social media. For example, Ruebottom & Toubiana (2021) show how sex workers could observe others virtually and hear their stories. To the extent that individuals can communicate and engage with others in the community experiencing shaming, they can share stories that make sense of their shared experiences of shame.

We argue that a third-person experience of shame has important implications in terms of coming to see shame as a collective experience, which can then transform the impact shame has on one’s views of oneself. When individuals experience shame in the third person and witness the shaming of similarly shamed others, they can begin to connect their own direct and personal stories to those who have also been shamed. They begin to make sense of their experiences collectively—triggering identification with a collective (mechanism (3), Figure 1).

Research on stigmatized occupations and groups, for example, has suggested that collective experiences of stigmatization, and shame, can lead to “entitativity”—a sense of being grouplike (Ashforth & Kreiner, 2014, p. 92). Establishing a connection between self and others enables a shift in focus from “me” to “we” (Creed et al., 2020; Prins, van Stekelenburg, Polletta, & Klandermans, 2013). As such, a third-person experience of shame can provide individuals with a way in which to see themselves as part of a group. Through the mechanism of identification, a “person’s unique sense of self comes to be understood in reference” to a particular group (Postmes & Jetten, 2006, p. 260; Toubiana, 2020). Through this mechanism, an individual self-identifies as a member of a specific group, and integrates the prototypical features of that group as their own (Ashforth, 2001).

As illustrated with the entrepreneurs’ stories presented in our vignettes, Jeff (vignette 2) began to see himself as part of a community of transgender people, particularly those in the sex industry who are exploited and shamed as a “freak show.” He shared how his story was similar to others even though he came out so long ago. In doing so, Jeff was connecting himself to this community who were shamed for being transgender. Similarly, Brandon (vignette 3) began to see himself as part of a community of the previously incarcerated as he witnessed the shame cast on himself and others. By identifying with others who are similarly shamed, an individual begins to understand that they are part of a group with a “shared status” (Polletta & Jasper, 2001, p. 285). By contrast, in the absence of such identification, the individual may be “stuck” feeling shame on their own and which may continue to impede action through feelings of helplessness (as theorized as mechanism (1b), Figure 1).

Collective identity, narratives of injustice, and entrepreneurial self-efficacy

Collective identity is defined as “an individual’s cognitive, moral, and emotional connection with a broader community, category, practice, or institution. It is a perception of a shared status or relation, which may be imagined rather than experienced directly” (Polletta & Jasper, 2001, p. 285). In this way, collective identity is a sense of “who we are” as a group. Collective identities are particularly salient for groups that have been stigmatized. Van Maanen and Barley (1984) explain that stigmatized “members will turn to one another for aid and comfort and, through such interaction, sustain a view of the world that justifies and vindicates itself as a defense against outsiders” (p. 326). The idea is that when an individual feels identified with a community based on shared experiences of stigmatization and shaming, they can generate positive views of themselves as a collective which acts as a defense against shaming at the individual level.

One of the key ways that shamed individuals develop identification with a community is through shared narratives that define and elaborate “who we are” (Brown, 2006). From this perspective, “collective identity is a discursive (rather than, for example, psychological) construct, and ‘resides’ in the collective identity stories that, for example, people tell to each other in their conversations” (Brown, 2006, p. 734). For individuals facing stigmatization and shame, narratives of injustice are often used to build collective identity (Benford & Snow, 2000; Prins et al., 2013). As Prins et al. (2013) found, these stories of injustice contain examples of “typical” treatments of the group, such as those of Moroccan-Dutch young adults who were discriminated against in job interviews and often excluded from the job market. The stories of injustice are shared and compiled by the group, and often shift from “I” to “we,” which “implies that this is not just his [or her] experience and that it is not an isolated experience” (Prins et al., 2013, p. 91). In this way, the narratives of injustice come to define the shared experience of those who identify with the collective.

Importantly, when a collective identity focuses on shared injustice instead of individual failing, it serves as a critical moment for individuals that can “open their eyes and sharply increases their grievances” (Opp, 1988, p. 854). Injustices based on shared shaming accounts thus provide the fuel for a reflexive shift, “externalizing” the personal to a collective consciousness (Freire, 1970; J. C. Scott, 1990). A collective identity rooted in narratives of injustice thus helps shift an individual’s perception of who bears the responsibility for shame—from the individual being shamed, to those involved in the act of shaming, and to the social structures that define what is shameworthy.

While many narratives, with varying details, combine to shape the collective identity centered around injustice (Brown, 2006; Prins et al., 2013), we argue that there are two core themes underlying narratives of groups who have been shamed. Some narratives of injustice focus on victimization, while others are centered around resilience. We suggest that whether an individual’s identification is rooted in a victimization or a resilience narrative will affect their entrepreneurial self-efficacy. ² Individuals for whom the victimization narrative is primary can become “stuck” in their status and will likely have low levels of entrepreneurial self-efficacy. By contrast, individuals whose identification is rooted in a resilience narrative will experience higher levels of entrepreneurial self-efficacy.

From collective identity to entrepreneurial pathways

Even though shared stories of injustice transform individual feelings of shame, the stigma that leads to shaming is not necessarily eradicated. This means that while individuals may be buffered by the third-person experience of shame that connects them to a community of similarly shamed others, they will still be exposed to shaming (see the top of Figure 1) by those who perceive them as having a discreditable attribute. This shaming can impact all areas of life, but particularly relevant for entrepreneurship is the impact on work and employment. As Stone et al. (1992) explained:

In the context of work organizations, stigmatized individuals may face a host of problems that relate to both (a) access to jobs, and (b) treatment as a job incumbent. With respect to access, stigmatized individuals may be unfairly excluded from jobs through organizational recruitment, and selection practices (p. 396).

As such, stigmatization and the shaming that ensues can mean difficulty within the work context or exclusion from the labor market altogether (Ajunwa & Onwuachi-Willig, 2018; Goffman, 1963; Pescosolido & Martin, 2015; Rüsch et al., 2014; Western et al., 2015).

Recognizing this broad-based observation, we theorize two entrepreneurial pathways out of shame, depending on the narrative of injustice that is the basis of an individual’s identification—victimization or resilience. As argued above, identification rooted in victimization narratives will reduce individuals’ agency and, thus, entrepreneurial self-efficacy. Yet, even though this may curb an individual’s intention to engage in entrepreneurship, such shaming is often paired with exclusion from the labor market, such that the individual has in many instances no other choice but to start a venture out of necessity. We call this pathway necessity entrepreneurship out of shame. Indeed, necessity entrepreneurship has been shown to serve as a vehicle to fulfill an individual’s personal basic needs when no other employment options remain (Dencker et al., 2021). Necessity entrepreneurs thus aim at addressing their most basic needs, such as providing food and shelter for themselves and their families, and ensuring their own safety.

By contrast to this first pathway, when third-person experiences of shame lead to identification rooted in resilience narratives, we argue that this will fuel individuals’ entrepreneurial self-efficacy. When individuals have high entrepreneurial self-efficacy while being shamed in the workplace, they can be propelled to start a venture, not only for themselves but also to alleviate the shaming experienced by others. Beyond financial necessity and the need to provide for themselves, we argue these individuals will be compelled to turn the lack of access to safe spaces in the labor market into an opportunity to bring about important social change, fueled by their shared identity grounded in resilience. We name this pathway emancipatory entrepreneurship out of shame.

Entrepreneurship can thus become a direct form of action through which individuals can improve the situation for themselves as well as for similarly shamed others, allowing them to work beyond the boundaries of the current labor market by creating a shame-free space. For those who are shamed, entrepreneurship can provide tangible benefits, such as employment, as well as intangible benefits, such as the development of a positive sense of self and protection from further shaming. For instance, Brandon’s (vignette 3) primary goal was to enable himself and other individuals with criminal records to reduce or eliminate their collective sense of shame surrounding their background by gaining prestigious employment in the haute cuisine restaurant industry—an industry that was not open to hiring “ex-cons”—thereby allowing individuals to develop a positive work identity.

Similarly, Cuong (vignette 1) was told he would never work because he was deaf. After witnessing the shaming of other deaf people and sharing stories with the deaf community, he developed a collective identity based on a resilience narrative that inspired him to start a venture to create work for himself and others who are deaf. Not only did he create jobs and training for deaf individuals who were shamed and excluded from the labor market, he also created a safe space for deaf and hearing-impaired youth to come together. In this space, they would not be demeaned or told that they cannot provide valuable work. Additionally, Jeff (vignette 2) could not find work in porn that would not cast him as a “freak” and thus created his own label to provide a shame-free space. He did so first for himself, but later as the business grew, it became a space for other transgender people to share their own stories without shame.

While the design of these ventures generates a shame-free space, entrepreneurs may also push to create social change beyond their venture, challenging the sources of stigmatization altogether. For instance, Cuong’s salon (vignette 1) encourages signing between hearing customers and hearing-impaired employees to destigmatize sign language and create stronger social cohesion among the hearing-impaired and the broader community. Similarly, Jeff’s (vignette 2) “docu-porn” aims to educate and normalize transgender bodies, identities, and sexualities, spurring critical discussion among a wide base of viewers beyond the stigmatized community about what it means to be a man or woman. Jeff’s films are shown in gender studies classes at universities around the world, and he is a guest speaker at many sexuality events and conferences. As such, entrepreneurs like Jeff use entrepreneurial action as a way to create a shame-free space within the venture, but also as a vehicle to reduce the stigma in society (Hampel & Tracey, 2017; Lyons et al., 2017).

In sum, when individual shame is transformed through collective identification and is focused on community resilience, we theorize that emancipatory entrepreneurship can emerge as a result. Importantly, the resultant ventures may not just solve individual-level issues such as a lack of employment opportunities for those shamed and excluded from the labor market, but they can also create solutions for the collective by providing a shame-free space and societal-level change by challenging the root causes of stigmatization. Yet, as the pathways to entrepreneurial action described above are rife with challenges, many situations may break down these processes. Next, we discuss these possible breakdowns.

Counterfactuals and breakdowns along the pathways

It is important to acknowledge that elevating shame from a first-person to a third-person experience depends on how an individual perceives themselves in relation to similarly shamed others, and the stories that are shared within communities. If there is no space for sharing stories of shame, an individual may feel stuck in shame and be barred from shifting their understanding from individual failure to a collectively shared injustice. It is also possible that the pathways to entrepreneurship we identified might break down because of persistent shaming of an individual. We have argued that identification with similar others may help an individual shield her/himself from any ongoing shaming. It is possible, however, that the intensity of shaming in the labor market is so severe that it can undermine the possibilities of this process. For instance, aspiring entrepreneurs could be persistently blocked from gaining access to resources necessary to found a venture or may more generally come to doubt their ability to found a venture as a result of years of exposure to shaming and negative self-evaluations. Indeed, following longstanding devaluation and exclusion, an individual may be worn out to the point that it is hard to connect with similar others. In Toubiana’s (2020) study of previously incarcerated men, many had been cycling in and out of prison for years and had given up hope on themselves. As such, a sense of resignation to shame and one’s stigmatized status after prolonged shaming can break down the process we have outlined.

We have also argued that identifying with a collective of similarly shamed others is a critical component of transforming shame and enabling entrepreneurship out of shame. It is likely, however, that the strength of the identification with the group may vary. Existing theory suggests that the more intense the stigmatization, the greater the sense of grouplikeness—meaning that the more shaming that is collectively experienced, the tighter the bonds felt by those who are stigmatized (Ashforth & Kreiner, 2014; Kreiner, Ashforth, & Sluss, 2006). However, an individual may hold dual identifications that impede a strong identification with the group, despite intense stigma. For example, someone might come to see themselves as part of the LGBTQ+ community, but may also have strong and longstanding ties to a religious congregation with conflicting values that prevent the individual from fully identifying with the LGBTQ+ community. If identification with the shamed group is not made or is weak, we expect shame to remain in the intrapersonal dimension and stall agentic behaviors toward social change. While entrepreneurship out of necessity may in such instances still happen as individuals are shut out of the labor market and may have no other choice, any attempts at creating a shame-free space, as well as at engendering any broader social change, will likely be stalled.

Additionally, our model assumes the presence or pre-existence of two different kinds of narratives: victimization and resilience. Some more nascent communities may not have reached the point of developing such cohesive master narratives. Instead, there may be many, fragmented stories told by individuals within such a collective that do not yet represent the group (i.e., the narratives do not shift from “I” to “we”; for an example of research theorizing the process by which collective identities can become legitimated, see Wry, Lounsbury, & Glynn, 2011). If this is the case, these narratives will not offer the same narrative resources as those found in the victimization or resilience narratives, thereby limiting their subsequent impact on the entrepreneurial pathways. Alternatively, competing narratives within the group could also complicate an individual’s identification, thereby limiting the impact on entrepreneurship. For example, within the sex industry, different groups of sex workers may have their own interests and narratives that privilege some and disadvantage others, impacting the master narratives of the community as a whole (Toubiana & Ruebottom, 2022).

Finally, other contingency factors and personal circumstances may also shape an individual’s entrepreneurial self-efficacy and can therefore impact the entrepreneurial pathways that we have conceptualized. We have theorized the direct factors tied to shame—shaming and collective identity—that can lead individuals to entrepreneurship out of shame. However, many of the factors that impact entrepreneurial self-efficacy in other contexts may also apply, such as prior education and the presence of entrepreneurial role models, among others (e.g., N. G. Boyd & Vozikis, 1994; C. C. Chen, Greene, & Crick, 1998). Our vignettes suggest that collective identification is likely to have a stronger impact on self-efficacy than factors such as prior education; however, it is quite likely that factors such as class or gender, and the broader social support that is present or absent due to one’s class or gender, will have quite a large impact on entrepreneurial self-efficacy (e.g., Tonoyan, Strohmeyer, & Jennings, 2020). Further exploration of each of these factors and their impact on the entrepreneurial pathways out of shame is required to understand the factors that can lead to a breakdown in this process.

Stigma, shame, and entrepreneurship: The promise for social change

While existing research has emphasized the multiple strategies that individuals can employ to cope with stigma and with the negative emotions associated with stigmatization such as shame (e.g., Ashforth & Kreiner, 1999; Ashforth et al., 2007; Dick, 2005; Goffman, 1963; Hamilton, Redman, & McMurray, 2019; Mavin & Grandy, 2013), the role of entrepreneurship has been overlooked. This lacuna is perhaps the result of a historic paucity of entrepreneurial ventures being founded to combat or reduce shame, given the often marginalized and/or disempowered status of stigmatized actors, and their resultant lack of financial, social, and/or cultural resources needed for entrepreneurship (Goffman, 1963; Pescosolido and Martin, 2015; Western et al., 2015). Nevertheless, the barriers to entry to entrepreneurship have decreased in recent years (Ismail, Malone, & van Geest, 2014), and stigmatized individuals are increasingly finding ways to launch new ventures (Hwang & Phillips, 2020; Irankunda et al., 2020; D. Miller & Le Breton-Miller, 2017; Ruebottom & Toubiana, 2021). As these ventures gain more exposure, we thus shed light on entrepreneurship as an alternate coping mechanism for shame and as one with the potential for positive social change (Haugh & Talwar, 2016; Lounsbury & Glynn, 2001, 2019).

Whereas other recognized strategies, such as media appeals, act as disruptive mechanisms that unsettle the status quo and call for others to change policies and practices (Gamson, 1989; Ostrom, 2000; van Stekelenburg & Klandermans, 2017), entrepreneurship directly implements changes needed to improve the conditions for oneself and possibly others, as in the case of emancipatory entrepreneurship out of shame. As such, entrepreneurship is a form of “prefigurative organizing” that enacts the desired future state, putting the alternative ideology into practice (Reinecke, 2018). By creating jobs for themselves and for others who are similarly shamed and excluded from the labor market, the entrepreneurs such as those featured in our vignettes have the potential to challenge their own self-perceptions as well as overall societal perceptions of whether stigmatized individuals can be valuable and visible workers in the labor market. Therefore, our theory extends past work on the complementarities and synergies between entrepreneurial endeavors and other social initiatives aiming to create social change (Akemu, Whiteman, & Kennedy, 2016; Hiatt, Sine, & Tolbert, 2009). Further research may build on the insights of our study and explore further when and how forms of collective action and social movements (Polletta & Jasper, 2001; van Stekelenburg & Klandermans, 2017) can spring from entrepreneurial processes (e.g., Shepherd, McMullen, & Ocasio, 2017; Zahra, 2008) and foster social change.

Further, by theorizing why and how stigma-induced shame is not always paralyzing and counterproductive for entrepreneurship, we are among the first to discuss pathways from this negative emotion of shame to entrepreneurship. Past entrepreneurship research has proposed that negative emotions, and specifically shame, tend to stifle entrepreneurship (e.g., Doern & Goss, 2014). By contrast, we outline two possible pathways that transform shame from a self-destructive emotion into either a sustainable source of livelihoods for individuals excluded from the labor market (necessity entrepreneurship out of shame) or into a venture that addresses shame for self and others, thereby creating a path for broader social change (emancipatory entrepreneurship out of shame). We argue that attending to the broader social context and experience of emotions, and how they relate to collective identification and shared narratives, can make us more attuned to when and how emotions may be at play in, and shape, entrepreneurial action. In doing so, we build bridges between the literatures on negative emotions (Cardon, Foo, Shepherd, & Wiklund, 2012; De Cock et al., 2020; Foo, 2011; Jennings, Edwards, Jennings, & Delbridge, 2015; Nikolaev et al., 2020; Shepherd & Patzelt, 2018; Welpe et al., 2012) and entrepreneurship (Foo et al., 2015; Shepherd, 2015; Shepherd, Patzelt, & Wolfe, 2011).

Given the paucity of work at the intersections of stigma, negative emotions, and entrepreneurship, scholars may study the noticeable rise of entrepreneurship by stigmatized individuals being shamed as a way of further examining the drivers of this phenomenon. For instance, future research could examine how to best manage entrepreneurial ventures working to reduce shame and protect against shaming. Future research could also explore how other negative emotions (e.g., guilt or pity, instead of shame) might have an energizing impact on entrepreneurship; research could also explore whether this impact has a limit (Lebel, 2017). These lines of research could uncover a range of negative emotions that can play a productive role in entrepreneurship, and conceivably perhaps even identify a range of positive emotions that may impede entrepreneurship.

Necessity entrepreneurship and its emancipatory potential

Our theorizing enriches the traditional conceptualization of necessity entrepreneurship, understood as “venture creation activities by individuals who seek to fulfill their basic physiological and safety needs” (Dencker et al., 2021, p. 63). Specifically, the emotional drivers of necessity entrepreneurship have largely been ignored in existing literature. Since individuals are “pushed” to necessity entrepreneurship out of lack of any other or better options, any emotional antecedents to their venture creation have been deemed irrelevant in comparison to their pressing basic needs. However, just as Dencker et al. (2021) revealed that necessity entrepreneurs may differ in the types of opportunities they exploit, we add further texture by suggesting how shame can trigger different pathways to entrepreneurship for individuals under conditions of basic needs.

Importantly, we highlight two instances leading to necessity entrepreneurship out of shame (one through mechanism (1b) and one through mechanism (4), Figure 1). As a baseline, we propose that when individuals do not have third-person experiences of shame and continue to feel shame as an internalized, first-person experience, feelings of helplessness combined with exclusion from the labor market will lead to necessity entrepreneurship (upper pathway in Figure 1, through mechanism (1b)). By contrast, upon third-person experiences of shame, when an individual’s identification is rooted in a victimization narrative (mechanism (4), Figure 1), it will generally hinder and reduce entrepreneurial self-efficacy. As such, it appears that in this second instance, these individuals are not driven by intrapersonal feelings of shame but by a collective identity rooted in stories of victimhood—which in turn may affect the way in which they evaluate their business opportunities (mechanism (4), Figure 1). Future research may therefore helpfully explore the effects of different emotional antecedents on necessity entrepreneurship and on opportunity recognition and exploitation. For instance, building on Dencker et al.’s (2021) insights, might entrepreneurs entrenched in feelings of shame be more inclined to replicate existing business models, rather than create entrepreneurial opportunities?

We further distinguish another pathway out of shame from the necessity entrepreneurship out of shame one, namely the emancipatory entrepreneurship out of shame. In this pathway, individuals’ collective identification is rooted in resilience narratives (see the lower pathway, Figure 1). As a result, their entrepreneurial self-efficacy is heightened (mechanism (5), Figure 1), propelling their entrepreneurial action towards emancipation for themselves and the collective. They do so by creating shame-free spaces. Our theorizing highlights that being driven to entrepreneurial action by the necessity to fulfill one’s basic needs may shift into other motives and outcomes such as, in this case, emancipation. By contrast to the first and basic necessity entrepreneurship out of shame pathway, we labeled this pathway as emancipatory because it helps remove or lessen constraints: cognitive as entrepreneurs feel more capable, emotional as their shame is reduced, and structural as they create new structures and work to change the various conditions that lead them to be shamed in the first place.

In sum, we reveal that entrepreneurship can become emancipatory in situations of necessity when actors experience collective identification in the face of shame. When stories of resilience are primary, this gives individuals fuel to believe they can reduce or lessen the constraints they face and that contribute to their stigmatization. In this way, we help make sense of when and how entrepreneurs in situations of necessity may be able to turn to, and indeed benefit from, the emancipatory power of entrepreneurship. Importantly, in outlining two distinct pathways to entrepreneurship for those facing basic needs out of shame (see Figure 1), we highlight a form of entrepreneurship that can be both out of necessity and emancipatory, building bridges between these separate literatures.

Transcending the self/other dichotomy in entrepreneurial motives

Alongside the above contributions and implications, our model furthermore highlights the possibilities that arise from breaking down existing dichotomies in the literature. The emancipatory entrepreneurship out of shame pathway suggests that entrepreneurs may be positioned to seize opportunities that simultaneously lead to first- and third-person outcomes. By doing so, our model breaks down distinctions traditionally portrayed in the current literature on entrepreneurial motives as being either self or other-oriented (Branzei et al., 2018; Carsrud & Brännback, 2011; Ruskin et al., 2016; Van de Ven et al., 2007). We challenge this dichotomy by theorizing an entrepreneurial pathway that is driven by and connected to both self and others.

Specifically, the emancipatory pathway out of shame reveals how stigma-induced shame, usually considered debilitating, can turn into entrepreneurial action that creates positive social change for both the self (e.g., employment, income, reduction of shame and other negative emotions, development of a positive sense of self) and others (e.g., employment and training opportunities for the community of stigmatized individuals, positive changes in societal norms, expectations and societal perceptions of the specific stigma). Critically, entrepreneurial efforts to reduce shame bridge individual and collective feelings of injustice that transcend the self/other dichotomy of entrepreneurial motives entrenched in the current entrepreneurship literature (e.g., Grant, 2008; Ruskin et al., 2016; Van de Ven et al., 2007). In fact, our emancipatory pathway is unique in that it seems to have both components of necessity entrepreneurship (Ballesteros-Sola & Osorio-Novela, 2021; Doering & Wry, 2022; Weber, Fasse, Haugh, & Grote, 2022) and social entrepreneurship. These two types of entrepreneurship have been cast as distinct: one being self-interested and driven out of need (Dencker et al., 2021), the other being other-orientated and driven by a desire for change (Chatterjee, Cornelissen, & Wincent, 2021; George, Haas, Joshi, McGahan, & Tracey, 2022; T. L. Miller et al., 2012; Vedula et al., 2022). Yet, while the entrepreneurs following the emancipatory pathway may be experiencing conditions of material necessity (similar to necessity entrepreneurs) and are removing constraints for themselves and others (which aligns with the concept of emancipatory entrepreneurship), they also aim at creating broader societal change by tackling shame (similar to social entrepreneurs). In this way the pathways in our process model transcend the existing self-other dichotomy of entrepreneurial motives, and related ones, such as those dividing entrepreneurial activity into particular “forms” of entrepreneurship.

While much entrepreneurship out of necessity can enable marginalized individuals to make a living for themselves (Dencker et al., 2021), entrepreneurship also has the potential to help transform the labor situations that may have placed them in such positions for themselves and others. We argue that combining first- and third-person experiences of shame, related to stigmatization and marginalization, is what may enable entrepreneurship to fulfill its emancipatory outcomes and act as a force for good. Critical to this shift from the necessity to the emancipatory pathway we have outlined is a connection between the individual and a community of similarly stigmatized others: between individual and collective identities.

The literature has revealed a great deal about the importance of identity for entrepreneurship (Cardon et al., 2009; Demetry, 2017; Essers & Benschop, 2007; Foy & Gruber, 2022). For example, we know that founder identities shape entrepreneurs’ motivations and approaches to entrepreneurship (e.g., Fauchart & Gruber, 2011; Gruber & MacMillan, 2017). The literature has also considered when founder identities are aligned and misaligned with the social context and the consequences of that for entrepreneurship (Foy & Gruber, 2022). We extend and complement this body of work by introducing the impact of collective identity on individual entrepreneurs. We show that narratives from the community can shape entrepreneurial self-efficacy and have an impact on how actors move from shame to entrepreneurship. We reveal how some collective identities may be generative at a personal level but not necessarily engender self-efficacy for entrepreneurship: the victimization narrative can help people cope with shame and avoid internalizing it, however, the narrative does not develop self-efficacy that can support entrepreneurship; the resilience narrative, on the other hand, can fuel entrepreneurial self-efficacy and drive actors towards social change. In doing so, we illuminate the importance of collective identities and the narratives that comprise them, and suggest they can shape the identity of prospective entrepreneurs. As such, we point to fruitful pathways for future research to consider the ways in which collective identity might shape role or founder identities, and/or how different nested combinations of identities may result in different entrepreneurial intentions and activities.

While beyond the scope of our theorizing, we suspect that entrepreneurial pathways from shame will have a reinforcing impact on collective identities and their associated narratives. As entrepreneurs in the emancipatory pathway provide more evidence in support of resilience narratives, the necessity pathway may similarly reinforce victimization narratives. This then raises the question of how individual entrepreneurs might break out of these reinforcing patterns. It could be that individuals have to de-identify with a collective or perhaps engage in cultural entrepreneurship (Wry et al., 2011) to generate new collective identities and narratives. Looking beyond past entrepreneurship research on role and social identities (e.g., Fauchart & Gruber, 2011), we encourage future research to examine the ways in which collective identification may shape entrepreneurial behavior and action. These questions will no doubt open up exciting new conversations about entrepreneurship and identity.