Digitizing Business: Advantages and Disadvantages of Informal Entrepreneurship

Abstract

Informal entrepreneurship represents a large portion of business, there are barriers to market entry in the formal sector that lead individuals to choose this type of entrepreneurship.

The purpose of this paper is to understand the context of informal entrepreneurship, to understand what are the reasons for individuals and companies to choose this path, as well as the advantages and disadvantages of informal entrepreneurship.

Thus, a search was conducted in several databases and applied certain inclusion and exclusion factors until we were left with the most relevant articles. Among the main results, it can be highlighted that informal entrepreneurship is more prevalent in developing countries and that it is very much linked to the sociodemographic characteristics of individuals. It is also concluded that online platforms, mainly, social networks, are a facilitating channel for informal entrepreneurship, due to the diminished need for costs and infrastructure to start an online business.

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Keywords: Entrepreneurship, Informal Economy, Informal Entrepreneurship, Digitalization, Organization, Europe, Social Networks, Online, Internet.