Discerning, and Supporting, ‘Transformative Subsistence Entrepreneurs’

At a recent conference organised by Monash University and Institute of Policy Studies, a fellow panelist in my session – Prof. Srinivas Sridharan – made a presentation that changed my understanding of informal entrepreneurs. Srinivas, an Associate Professor at Monash University’s School of Management presented his research on micro-entrepreneurs and subsistence entrepreneurs in 3 countries, including in India. He spoke of a new framework through which to think about these entrepreneurs. I found it compelling, and can help change how we think about bottom of the pyramid customers.
The main takeaway for me was that we have to identify the ‘transformative subsistence entrepreneurs’ from the rest, and help them grow. The main point Srinivas made was that identifying this particular type of subsistence entrepreneur isn’t simply by their income alone – other metrics that determine/predict their success, come into play.
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Srinivas argued that subsistence entrepreneurs are a heterogeneous marketplace. There are:
a) ‘Ordinary’ subsistence entrepreneurs
b) ‘Stability-seeking’ subsistence entrepreneurs
c) ‘Transformative’ subsistence entrepreneurs
It is c) who we need to take a closer look at. He noted that there are 3 characteristics of ‘Transformative Subsistence Entrepreneurs’
1. They experience an income spike (as they are able to move beyond ‘stability-seeking’)
2. They have personal agency – i.e., they have more control of their activities, their business, and are more aware of their rights and ability to navigate processes
3. They contribute to community growth – they employ more people, they have stronger local supply links with other micro-entrepreneurs in the community
The transformative story of these entrepreneurs isn’t so much about income at all, it is more about the increase in their personal agency and increase in community links/community growth.  They have ‘embedded assets’ – not from outside, but from within (i.e., inherent strengths)
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