The Price of Necessity Entrepreneurship

Necessity entrepreneurship

Necessity entrepreneurship is a field that is becoming increasingly prevalent. As time passes, the certainty associated with the employer-employee relationship fades, and job security takes on new meaning.

One study by Intuit, the software company, postulated that 40% of America’s workforce would convert to contingency workers. It all seems like speculation, but if you count part-time workers, individual traders/suppliers, contract workers, and freelancers, 40% actually seems like an underestimate.

A 2006 Government Accountability Office report estimated that 31% of workers were already contingent workers, based on the same criteria used above.

According to Marion Kauffman Foundation reports, entrepreneurship has expanded markedly in the most unlikely age brackets, such as the 55-64-year-old baby boomers who now comprise 23.4% of new entrepreneurs. What remains unclear is how many new entrepreneurs enter the field by choice.

Today, fewer entrepreneurs enter the field through the front door, you see a gap and conceptualize a vision/solution. Many become entrepreneurs for lack of better options, hence the term “necessity entrepreneurship” instead of conventional opportunity entrepreneurship. However, there’s no reason you shouldn’t be happy and/or successful, your entry point notwithstanding.

Necessity entrepreneurship is likely to become more prevalent in the future. Modern white-collar roles are slowly evolving, so many will think of work as a “series of engagements” instead of stable engagements, according to Richard Florida, an urban theorist. This shift is already rife among younger generations, where entrepreneurship is a state of mind rather than an act of establishing a business.

More students are majoring in entrepreneurship in colleges now than before, a transformative process likely to redefine the very essence of work as we know it. Since the early 90s, the population of those who prefer self-employment to traditional employment continued to grow, the number stood at a whopping 63% of Americans after an International Social Survey Program study in 1989.

However, much of this remains lip service because the official entrepreneurship numbers stand below 20%. So why aren’t the masses that prefer self-employment actually venturing into it?

A study by Andrew Oswald and David Blanchflower in 1998 revealed a rather interesting answer. The economists discovered whether an individual ventured into entrepreneurship or not largely predicated on whether s/he received a gift or inheritance. That is, whether or not they have some otherwise security.

This study saw backing from the self-employment explosion that came after the major hip in the real estate industry in 2007. The possibility of homeownership in the US enabled entrepreneurship since people had some security against which they would seek financing, an option that was unavailable by 1998.

Out of the Office and into, what?

The office has received lousy depiction for several decades, in film, studies, and pop culture. Most people believe that you can be fully dedicated to your employer, but your employer is just waiting for the opportunity to cut you loose. The latter’s efforts to make a more comfortable environment for its human resource are viewed as being manipulative.

However, employees still build their lives around those “constricting” cubicles and freak out when their positions become in any way jeopardized. Are there any comforts hidden in those cubicles, aside from the obvious economic stability, making employees that would otherwise prefer self-employment scared to venture out? And what, in our future, do we give up in our transformation and paradigm shift into a nation of entrepreneurs?

Office kinship

Ironically, the office is a station of social relationship-building. As the world grows more “self-centered” fewer people care about their neighbors, town meetings, communal activities, and civic organizations.

However, because the office environment places workers nearby, it makes the perfect environment to nurture relations. Up to 36% of adult workers today have one or more close friends they met at the office, with the number increasing with successively older generations.

Quite a good number of people met their spouses at their workplaces, including Barack and Michelle Obama and Bill and Melinda Gates. At least 20% of couples that married from 2005-2012 had met at or through work. In 2004, Southwest Airlines, which employs 35,000, had 2,000 of its workers married.


Research indicates that the office environment and colleagues help to improve one’s job performance. One such study by Professor Boris Groysberg of Harvard analyzed the highest performers in different professions. His study found that these individuals underperformed when they changed employment positions.

This means that their performance did not wholly peg in themselves, but rather on the environments in which they worked. On changing jobs, the high performers would take up to five years to recover their performance track record.

Colleagues make a huge contribution to the worker’s personal development. They know your weak and strong points. More experienced ones know secret pathways and information to make you do better, which they share over time. By being around when you perform your duties, they give you a chance to perform better.


They say necessity is the mother of invention, which would point to entrepreneurs being the most creative lot. However, offices are also hallways of creativity, made better by collecting so many minds and ideas in one place. Even a random walk down the office halls can expose you to people without whose ideas tasks would be much harder to manage.

Brainstorming sessions are more productive where there are a larger number of minds at work. Together they can come up with and improve on solutions to organizational problems. This is true, even if there’s an antagonistic/competitive rather than cooperative relationship. You are driven to work harder and expect yourself more, which grows your professional capacity and creativity.


There’s much to be said about conventional workplaces and much more about entrepreneurship. However, the facts cannot be ignored; it’s getting more difficult to hold onto your job with uncertain economic times. Entrepreneurship will grow as it gets easier to set up, finance, and manage businesses.

However, holding a one-sided view will not benefit tomorrow’s entrepreneurs. Even in a world where you are your own boss, you should seek out avenues to build relationships that will improve your personal life and business and grow you in a wholesome way.

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