Subsistence Entrepreneurship, Value Creation, and Community Exchange Systems

Abstract

We study subsistence entrepreneurship, defined as entrepreneurial actions undertaken by individuals living in poverty. Subsistence entrepreneurs are important elements of the global economy. By virtue of being poor themselves and co-locating in the same community as their customers living in poverty, subsistence entrepreneurs create value for their customers more effectively than outside entities. We suggest that this marketing exchange (micro-level phenomenon) leads to the building of a community-level exchange system that is unique and inimitable (meso-level phenomenon). Viewing through the theoretical lens of social capital, we develop insights gleaned from qualitative interviews with subsistence entrepreneurs. Community marketing systems that arise out of micro-level interactions between subsistence entrepreneurs and their customers form the glue holding the so-called “informal economy” together in subsistence economies.