Necessity is the Mother of Isomorphism: Poverty and Market Creativity in Panama

• In Event: 148 - Regular Session. Economic Sociology. Creativity in Economic Life

Abstract

Does poverty hinder or encourage market creativity? Businesses that offer novel, creative products have greater growth potential than businesses that conform to market norms. Yet scholars generally view the poor as lacking the tools to found such businesses. Since poor individuals have more constrained social networks and less start-up capital than their higher-income peers, they are seen as engaging in less market creativity. In this paper, however, I argue that the relationship between poverty and market creativity is more complex than previously believed. Drawing on survey and interview data from entrepreneurs in Panama, I show that poverty both hinders and encourages market creativity at different points in the business development process. As poor individuals are pushed to migrate in search of improved educational and employment opportunities, they develop diverse cultural repertories that encourage them to conceive of novel businesses. However, poor entrepreneurs need to generate income quickly. As a result, they rush under-developed businesses to market in communities where consumers are also poor. These factors make it difficult for the poor to sustain novel businesses and profit from their creativity. This paper theorizes the dual effect of necessity on creativity, and helps explain why economic mobility via self-employment proves elusive for the poor.

Author

• Laura Doering, University of Toronto