Article Review

Revisiting the Face of “Necessity Entrepreneurship by John Tozzi

            This article checks in on ventures formulated by the unemployed. This is due to signs of economic recovery that have been witnessed. The author notes that with the unemployment rate steady at 9.7%, it is difficult to turn down job offers with special emphasis on those who have been laid off (Tozzi, 2010). An exception is seen on the case of Art Wells, who has left two job offers to stick to his freelance business of web developing that he started in 2008. This was after being laid off by lighting manufacturer, Rejuvenation. Wells says that new clients keep on calling to give him new jobs every week. Tozzi notes that a number of Americans who lost their jobs in the Great Recession, have responded in the same way as Wells. This is by creating jobs on their own.

The Business Week had profiled twenty-six of these ventures about a year ago and has been monitoring their progress. Of the twenty-six, fifteen are still pursuing their ventures full time, while five have returned to full time jobs. Some keep their ideas as side ventures or part time alternatives while others took unexpected turns such as a career shift to teaching yoga. Tozzi notes that, the rate of the so called “necessity entrepreneurship” (people who start businesses because other income opportunities are gone), has increased sharply in the U.S. during the recession. According to the Global entrepreneurship Monitor, a research project that tracks entrepreneurship, necessity was a factor for 24.7% of the new ventures in 2009. This was an increase from 16.3% in 2007(Tozzi, 2010). According to some of these entrepreneurs, getting laid off was a good opportunity to pursue business ideas that they had been considering for long. They also say that these business ideas were not worth risking a job. Donna Kelley, a professor at Babson College says that these entrepreneurs have nothing to lose, considering that there are no better job prospects. She adds that a decline in necessity entrepreneurship is witnessed in the event of a healthier economy.

Wells, who was laid off from a position where he was unhappy, says that, he now earns more money with revenue of $95,000 in 2009. He adds that building the business in a rough economy was not easy. He even says that the early months brought in no work. Most of the entrepreneurs interviewed said they struggled in the first year. Tom Hodge, a 35-year-old toolmaker, who worked for 12 years at the General Motors plant in Moraine, Ohio, started his own machine shop after the carmaker left the city at the end of 2008. He says that his customers are manufacturers but there is not much manufacturing going on. He is now making his own products, which he sells directly to consumers. He says he is still building relationships with his customers and believes his firm is on its way to sustainability. Hodge says that if it reaches a point where his business is no longer viable, he will close up and look for a job. He is still optimistic that this will not happen.

For some of those interviewed, personal ventures proved to be useful bridges between jobs. Ryan Kuder, a 35-year-old former employee at Yahoo!, says that, he spent a year and a half working with a business partner on a web startup called Koombea. However, he was glad to return to a full-time job in February as the vice president of marketing for Biz360. He also says that he does not regret venturing into entrepreneurship because he was able to sustain his livelihood.

This article captures the real life situations that are occurring in the U.S. During the Great Recession, many people were laid off and left without any means of supporting themselves. This situation led to necessity entrepreneurship (Tozzi, 2010). The creative minds of people always harbor great business ideas. If these business ideas were implemented and put into action, then no one would claim to be jobless. According to this article, entrepreneurship can be successful and a source of livelihood to the owners. Entrepreneurs should not wait until they are laid off to implement their brilliant ideas, they should take the option that entrepreneurship could also be fulltime (Tozzi, 2010).

This article identifies a key business issue that many people neglect. Entrepreneurship is a key issue that needs to be addressed by the government. Innovations should be used to satisfy consumer’s needs. It is odd that the recession has helped drive entrepreneurship up. People should take up the opportunity of coming up with their own businesses before the economy recovers. It is also notable that small and medium enterprises were more likely to be set-up. This is because the capital to start a high-income business is elusive when you have just lost your job.

I found this article interesting because it addresses an issue that is affecting people from every part of the world. The author also makes an effort to talk to people who have experienced “necessity entrepreneurship”, first hand. The case of Wells interests me because, his business is doing so well that he has rejected job offers and opted to stick to his business. The author in simple terms also addresses unemployment, which is a key issue in the U.S. He has noted that, the unemployment rate is always going up and therefore should be addressed keenly. Entrepreneurship is a perfect solution to this problem.

Another interesting factor in this article is the different perspectives that people have in view of their business ventures. Some view them as just part-time businesses that may be abandoned in favor of a full-time job. Some have made the permanent decision to their choices while some have decided to shift their career choices. In the light of this article, the author has captured the true sense of “necessity entrepreneurship”. He has given us evidence that entrepreneurship can prosper in each community because it all depends on how serious you take your venture.


Works Cited:

Tozzi, John. “Revisiting the Face of Necessity Entrepreneurship”. Business Week. 9 March. 2010. Web.19 May. 2010. <>

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