Entrepreneurship in the Favela of Rocinha, Rio de Janeiro: A Critical Approach

Abstract

This article explores the reality of entrepreneurship in the favela of Rocinha, Rio de Janeiro. It contrasts the prescriptions of federal and state training programs and support policies for entrepreneurship with the reality of the practice of entrepreneurial activities in Rocinha. It shows that the logic of effectuation can explain microentrepreneurial trajectories in favelas, expanding its original reach from expert entrepreneurs in large firms. It also exposes the severe shortcomings in the training programs and support policies of the Serviço Brasileiro de Apoio às Micro e Pequenas Empresas (SEBRAE). It points to the urgency of reform of the very foundation of entrepreneurship policies in favelas.O artigo explora a realidade do empreendedorismo na favela da Rocinha, Rio de Janeiro. Ele contrasta as prescrições dos programas e políticas de apoio ao empreendedorismo do governo federal e estadual com a realidade da prática das atividades de empreendedorismo na Rocinha. O artigo mostra que a lógica da efeituação, ou effectuation, pode explicar as trajetórias dos microempreendedores nas favelas, expandindo sua abrangência original desde empreendedores experientes em grandes firmas. O artigo também expõe severas limitações nos programas de treinamento e políticas de apoio do Serviço Brasileiro de Apoio aos Micro e Pequenos Negócios (SEBRAE). O texto aponta para a urgência na reforma das fundações das políticas para empreendedorismo em favelas.

Institutional Voids and Business Model Innovation: How Grassroots Social Businesses Advance Deprived Communities in Emerging Economies

“…According to Plakoyiannaki et al (2019), conducting qualitative research in emerging economies provides opportunities to refine existing theories and develop new, context-bound and indigenous theories, and contextual explanations. Finally, yet importantly, our qualitative approach is consistent with prior studies analyzing entrepreneurial phenomena in poor communities (Fernandes et al, 2019; Mair & Marti, 2009; Nunes Pereira, 2017; Sardana et al, 2019).…”

“…Characterized by poor living conditions, a lack of infrastructure (roads, water, electricity, heating, etc. ), and a large informal sector (Imas & Weston, 2012), favelas are usually considered to have developed because of Brazil's unequal revenue distribution, the migration of rural people searching for employment in urban areas, and inefficient public policies (Nunes Pereira et al, 2017). Because of the difficult social context, the government has often neglected and segregated favelas (Lacerda, 2015), regarding them as lawless places to be feared and avoided (Fernandes et al, 2019).…”

“…Favelas are also known for their local culture, which includes dancing (samba, funk, and hip-hop) and street art. Creativity and entrepreneurial initiatives are very much present in favela life (Nunes Pereira et al, 2017).…”

“…For example, non-governmental organizations and businesses from developed countries that enter so-called Bottom-of-the-Pyramid markets to improve the living conditions of the poor and contribute to social change, are an important force in improving the market participation of marginalized groups (Mair & Marti, 2009; Sanchez & Ricart, 2010). Recent research, however, has highlighted the work of grassroots entrepreneurs, who undoubtedly have the greatest potential to tackle social problems, as great numbers of people can become entrepreneurs (Fernandes et al, 2019; Nunes Pereira et al, 2017). In particular, academics and governments view local businesses aiming to change society (i.e., social businesses) as having the strength and legitimacy to provide multiple social benefits to all involved parties (Seelos & Mair, 2007).…”

“…Brazil is the leading emerging economy in Latin America, but suffers from institutional weaknesses generating enormous inequality (Lacerda, 2016). This is particularly evident in favelas, where thousands of people build insalubrious dwellings on illegally occupied land (Gay, 2012; Nunes Pereira, Bartholo, Silva, & Proença, 2017) and suffer from a range of social and economic problems as well as being stigmatized by the rest of the population (Imas & Weston, 2012; Nunes Pereira et al, 2017). We conducted a case study of Alpha, [ 1 ] a social business created to fight obesity – a serious social problem caused by poor-quality diet – by offering freshly made salads at affordable prices and employing favela dwellers.…”