The Hidden Enterprise Culture
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The Hidden Enterprise Culture

Entrepreneurship in the Underground Economy

Colin C. Williams

Portraying how entrepreneurs often start out conducting some or all of their trade on an ‘off-the-books’ basis and how many continue to do so once they become established, this book provides the first detailed account of the vast and ubiquitous hidden enterprise culture existing in the interstices of western economies. Until now, the role of the underground economy in enterprise creation, entrepreneurship and small business development has been largely ignored despite its widespread prevalence and importance.
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Chapter 10: Helping Enterprises Start Up in a Legitimate Manner

Colin C. Williams


INTRODUCTION If the underground economy is to be tackled, it is insufficient solely to adopt curative remedies to transform those enterprises and entrepreneurs currently operating on an underground basis into fully legitimate enterprises. Initiatives also need to be pursued to prevent future start-ups entering the world of underground work in the first place. While later chapters deal with the curative remedies required, the intention in this chapter is to identify ways of helping enterprises and entrepreneurs start up in a legitimate manner from the outset. To help business ventures start up properly from the beginning, this chapter will evaluate five broad policy measures that might prevent new enterprises and entrepreneurs slipping into underground transactions. First, the issue of simplifying existing formalization procedures will be evaluated. Second, the idea of introducing new categories of legitimate economic activity so as to allow forms of endeavour currently conducted on an offthe-books basis to become legitimate will be considered. Third, the provision of direct and/or indirect tax incentives to help enterprise and entrepreneurs to start up legitimately will be reviewed. Fourth, the use of micro-enterprise development programmes (MDPs) to help micro-enterprises set up and develop in a formal manner will be examined and fifth and finally, a range of initiatives for smoothing the transition from claiming unemployment benefits to becoming self-employed. The outcome will be an analysis of a range of policy measures that could be implemented in order to help enterprises and entrepreneurs start up legitimately rather than conduct some and/or...

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