PUSHED TO START, PULLED TO GROW? A QUALITATIVE STUDY OF NECESSITY- AND OPPORTUNITY-BASED ENTREPRENEURSHIP IN PAKISTAN

Abstract

The distinction between necessity- and opportunity-based entrepreneurship is one of the most widely used typologies in entrepreneurship research. However, most of the knowledge derives from survey data collected in formal, Western labor markets. This paper explores the functioning of the distinction in the lives of micro- and small-enterprise owners in the Islamabad Capital Territory, Pakistan, based on 27 semi-structured interviews with entrepreneurs in the city's urban sectors and rural union councils. Six themes emerged from thematic analysis: braided motivations at founding; transition triggers that convert survival ventures into growth ventures; the household as financier, workforce, and gatekeeper; informality as both shelter and ceiling; improvised human capital that was developed through apprenticeship rather than formal education; and digital payment and social-commerce rails that narrow, but do not close, the rural–urban opportunity gap. The findings suggest that necessity and opportunity are rarely alternatives in this context. Most participants started from a need but held an opportunity in view, and whether they ever moved toward it depended less on their initial motivation than on household permission structures, the costs of formalization, and access to markets beyond the neighborhood. The paper contributes a contextualized, process-oriented account of the necessity–opportunity distinction in a South Asian informal economy and offers implications for SME policy in Pakistan.