World Encyclopedia of Entrepreneurship
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World Encyclopedia of Entrepreneurship

  • Elgar original reference

Edited by Léo-Paul Dana

This comprehensive reference work, written by some of the most eminent academics in the field, contains entries on numerous aspects of entrepreneurship.
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Chapter 33: Involuntary Entrepreneurship

Teemu Kautonen, Simon Down and Friederike Welter

Extract

33 Involuntary entrepreneurship Teemu Kautonen, Simon Down, Friederike Welter, Kai Althoff, Jenni Palmroos, Susanne Kolb and Pekka Vainio Involuntary entrepreneurship refers to the phenomenon of business enterprises replacing employment relationships with contracted self-employed workers as a result of vertical de-integration and outsourcing processes. An involuntary entrepreneur is an individual who has become self-employed even though he or she would prefer paid employment, and who is mainly self-employed in contractual terms but in practice is treated as an employee because of the way the contract is executed. Other terms used in this context include forced (Hakala, 2006; Palkkatyöläinen, 2007) and reluctant entrepreneurship (Boyle, 1994; Stanworth and Stanworth, 1997), false self-employment (Harvey, 2001), para-subordination (Perulli, 2003), employed self-employment (Paasch, 1990; Wank, 1988), hybrid self-employment (Bögenhold, 1987) and dependent self-employment (Böheim and Muehlberger, 2006). Developments such as vertical de-integration, lean production and outsourcing in large firms as well as the introduction of new technologies allowing for a separation of work place and activity (Beck, 2000; Boyle, 1994; Harrison, 1994; Sennett, 1998) have given rise to growing political interest and concern regarding people being pushed into new forms of precarious self-employment. These new working arrangements are located somewhere in a grey area between employment and self-employment (Perulli, 2003; Schulze Buschoff, 2004). The employer’s motive for such arrangements is to find more flexibility by avoiding the costs, obligations and responsibilities related to employment relationships. The employee, on the other hand, is often effectively ‘forced’ into becoming a subcontractor. Two streams of...

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