In times of financial crisis, some people will roll the dice on starting a new venture to cope with the uncertainty of unemployment, say business researchers.
In a new study in the Journal of Business Venturing, University of Alberta researcher Angelique Slade Shantz, Madeline Toubiana of the University of Ottawa and their team found that when people lost jobs and experienced “occupational disorientation” during the COVID-19 pandemic, some chose to “play” with entrepreneurship, simply to see where it might lead or to explore a new identity.
The qualitative study focused on 47 people who had lost jobs or career paths between 2020 and 2021 — but had a safety net of savings, government benefits or family support, rather than those pursuing an “urgent, compelling, and obvious course of action based on dire need.”
In most cases, survival or wealth generation was not the main driver. Instead of languishing in career paralysis, interview subjects recognized opportunity in crisis and reported satisfaction in taking back a sense of control over their lives.
Even if the business failed, it was still seen as worthwhile if it helped people navigate disorientation and trauma, say the researchers. In those cases, entrepreneurship was considered “scaffolding” to help rebuild identity or clarify the right path.
One crucial finding is that most subjects underwent a psychological process of granting themselves permission to launch a venture, rather than rushing in impulsively. They felt the need to justify their choice, framing it as a now-or-never moment to pursue latent passions, or a temporary pause or time-out allowing for experimentation.
“We noticed cautious, tentative movements through a permission-play cycle,” say the authors. “This expands our understanding of how to support those for whom entrepreneurship may be a long-standing goal but whose ultimate adoption of an entrepreneurial path is fragile.”
For some, this permission led to an entrepreneurial identity and sticking with their venture. Others returned to a traditional job; those who did returned with a clearer head and a restored sense of control and professional worth.
“Be they economic, social, environmental or technological, crises are becoming ever more frequent and disruptive,” say the study’s authors. “Our findings reveal a process whereby individuals try entrepreneurship as a way to envision a possible future in the face of occupational disorientation induced by crisis.”