Entrepreneurship Flourishes in Areas with Terrorism
Feb 2, 2011
Ivey study shows that new enterprises are resilient under extreme adversity in developing countries
LONDON, ON, February 2, 2011 – Small business is widely understood to be the backbone of a country’s economy. Enterprise has an extraordinary power to emancipate people from poverty. In developing countries, small family business accounts for more than 95% of the workforce. A new Richard Ivey School of Business study says the spirit of entrepreneurism has been discovered to flourish even among intense levels of terrorism. In fact, small businesses may have added prospects of success under those dangerous conditions.
The study entitled “Another Dollar, Another Day: Enterprise Resilience under Terrorism in Developing Countries” – lead-authored by Oana Branzei from Richard Ivey School of Business, The University of Western Ontario – describes how terrorism conditions may create psychological incentives for entrepreneurs to be more resilient to hardship and to yield more favorable economic payoffs.
“The urban poor in developing countries continually emerge as entrepreneurs in the aftermath of terrorism,” said Branzei. “Enterprise activities at different conditions and levels of terrorism suggest how taking both into account can increase the odds of success for international development in post conflict settings.”
Branzei based her work on data collected for urban slums where 31.6% of the world’s urban populations live and where civil unrest, ethnic clashes and terrorist events are most prevalent. Specifically, the survey data from the six largest cities in Bangladesh was used because terrorism statistics had been accurately maintained between 2001 and 2005, including date, type of attack and number of injuries.
The data incorporated factors such as the level of formality of the business, the stage of the area’s terrorism (outbreak, escalation, reduction) and demographics such as age, family size, and education. Interestingly, the findings indicated that younger people and women in particular had greater enterprise resilience than others, and thus were more prepared to be successful with their enterprises.
“Women entrepreneurs may be more resilient than men following sudden terrorism outbreaks,” Branzei said. “When necessity pushes them into entrepreneurial roles, women are opportunity-oriented, resourceful and highly motivated.” The study also believes that women are more attuned to social change and quicker to adjust their roles in response to social changes.
These findings give professor Branzei reason to hope that international programs may benefit from greater efforts to understand how and when interventions can promote stable and sustainable peace by fostering entrepreneurship – even under extreme adversity.
“Another Day, Another Dollar: Enterprise Resilience under Terrorism in Developing Countries” was published in the 41st edition of the Journal of International Business Studies (2010). The full text is available for viewing online:
About the Richard Ivey School of Business, The University of Western Ontario
The Richard Ivey School of Business (www.ivey.ca) at The University of Western Ontario is Canada’s leading provider of relevant, innovative and comprehensive business education. Drawing on extensive research and business experience, Ivey faculty provide the best classroom experience, equipping graduates with the skills and capabilities they need to tackle the leadership challenges in today’s complex business world. Ivey offers world-renowned undergraduate and graduate degree programs as well as Executive Development at campuses in London (Ontario), Toronto and Hong Kong.
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