Entrepreneurship and Organised Crime

Entrepreneurship and Organised Crime

Entrepreneurs in Illegal Business

Petter Gottschalk

Entrepreneurship and Organised Crime provides a fresh and realistic insight into the problem of organised crime activity and the role of entrepreneurs in illegal business.

Chapter 6: Entrepreneurial Growth in Illegal Business

Petter Gottschalk

Subjects: business and management, entrepreneurship


Opening up new markets and developing new products are part of a strategy to sustain and develop a business. Ruggiero (2000) tells the story of how organised criminals opened up the new criminal market for heroin in the United Kingdom. Until 1968, heroin was bought legally with a medical prescription, which partly ended up feeding a grey market. Then new legislation limited medical doctors’ power to prescribe, which stimulated criminal entrepreneurs to develop a black market. A turning point for drug distribution occurred a decade later, as locally centred and poorly structured supply was replaced by organised professionals’ well-structured supply chains. The explosion of heroin consumption probably stimulated this turning point in the early 1980s. Developing new products is always important. When everyone in the rich part of the world had a telephone in each home and each office, the demand for telephones dropped. What did producers such as Ericsson, Nokia and Sony do? They developed the mobile phone. In the beginning, you could only talk with the mobile phone, like you did with the stationary phone. Soon, you were able to use your cellular phone for e-mail, pictures and music. This is a typical example of new product development in legal business. Similarly, criminal business enterprises need to develop new products to sustain their crime business over time. According to Davidsson (2008: 15), entrepreneur and entrepreneurship are often implicitly understood as someone successful and something successful in terms of growth and prosperity: Many scholars include in their understanding of...

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