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Surviving the Digital Economy: Social Capital and Subsistence Entrepreneurship on Peer-to-Peer Platforms

Digital entrepreneurship is most commonly represented through a narrow and idealized image that emphasizes innovation, growth, and technological sophistication. Entrepreneurs operating in digital environments are typically portrayed as young, urban, highly educated individuals who possess advanced technical and business skills and who pursue opportunity-driven ventures. These individuals are often associated with start-ups that aim to disrupt existing industries and scale rapidly, aspiring to become the next generation of global digital firms such as Uber, Airbnb, or Spotify. This representation, while influential, has contributed to a partial and exclusionary understanding of digital entrepreneurship by privileging a specific socio-economic profile and set of entrepreneurial ambitions.

In sharp contrast to this dominant narrative, a growing number of individuals in developed countries are engaging in digital entrepreneurial activities not out of opportunity or ambition, but out of necessity. These individuals use digital platforms to secure basic income, cope with financial instability, and manage everyday survival. This research identifies these actors as digital subsistence entrepreneurs, a category that challenges existing assumptions about who digital entrepreneurs are and what digital entrepreneurship entails. Rather than focusing on innovation or business growth, digital subsistence entrepreneurs engage in small-scale, informal, and survival-oriented market practices that are digitally mediated but socially embedded.

This study explores digital subsistence entrepreneurship through an empirical investigation of buy-and-sell activities conducted on Facebook groups. Using a multimethod qualitative approach involving in-depth interviews, netnography, and participatory observation, the research examines how economically deprived individuals—specifically French mothers living in precarious conditions—use peer-to-peer digital platforms to access markets as both sellers and buyers. The findings reveal that these activities resemble subsistence markets traditionally associated with developing countries, yet they emerge within advanced digital infrastructures in developed economies. In doing so, the study contributes to a more inclusive and nuanced understanding of digital entrepreneurship and highlights the role of social capital in enabling survival-oriented entrepreneurial practices.

Classical Foundations of Entrepreneurship Theory

Entrepreneurship has long been a central concept in economic and social theory, with definitions evolving in response to changes in economic structures and organizational forms. One of the earliest conceptualizations was proposed by Richard Cantillon in the eighteenth century, who defined entrepreneurship as self-employment characterized by uncertain returns. Cantillon’s emphasis on risk and uncertainty laid the foundation for subsequent theoretical developments that positioned entrepreneurs as key economic actors operating under conditions of unpredictability.

In the twentieth century, Joseph Schumpeter’s influential work further shaped the field by defining entrepreneurs as agents of innovation who exploit market opportunities through new combinations of resources. For Schumpeter, entrepreneurship was inherently linked to economic development and creative destruction, as entrepreneurs disrupted existing market equilibria by introducing new products, processes, or organizational forms. This innovation-centered perspective became a cornerstone of modern entrepreneurship theory and continues to inform contemporary research.

Subsequent scholars expanded and diversified the conceptualization of entrepreneurship. Drucker emphasized entrepreneurship as a systematic process of identifying and exploiting change, while Gartner shifted attention to the creation of organizations as the defining feature of entrepreneurial activity. Over time, entrepreneurship came to be recognized as a multidimensional phenomenon encompassing risk-taking, innovation, opportunity recognition, and value creation. Despite this conceptual diversity, a common thread running through much of the literature is the assumption that entrepreneurship involves an active and voluntary pursuit of opportunity, often oriented toward growth and economic advancement.

 

The Emergence of Digital Entrepreneurship as a Distinct Field

With the rapid diffusion of digital technologies, entrepreneurship research has increasingly focused on the transformative role of digital infrastructures. Digital entrepreneurship emerged as a distinct field to examine how digital tools and platforms reshape entrepreneurial processes, enabling new forms of organization, coordination, and value creation. Digital infrastructures—including social media, cloud computing, online communities, and data analytics—have significantly lowered entry barriers to entrepreneurship by reducing costs, minimizing capital requirements, and facilitating access to global markets.

Scholars have argued that digital technologies democratize entrepreneurship by allowing individuals to bypass traditional market constraints and institutional gatekeepers. Digital entrepreneurial processes are often described as more fluid, emergent, and less bounded than their traditional counterparts. Entrepreneurial agency is no longer confined to clearly defined organizational structures or geographic locations, and outcomes are less predictable and more open-ended.

Despite these theoretical insights, empirical research on digital entrepreneurship has largely concentrated on a specific subset of entrepreneurs. Digital entrepreneurs are commonly portrayed as opportunity-driven individuals who possess strong social networks, high levels of education, and advanced technical skills. These entrepreneurs typically pursue innovative ventures with ambitions of scalability and market disruption. As a result, digital entrepreneurship research has reproduced many of the assumptions found in traditional entrepreneurship literature, particularly the emphasis on choice, opportunity, and growth.

Necessity-Driven Entrepreneurship and Its Marginalization in Digital Contexts

In contrast to opportunity-driven entrepreneurship, necessity-driven entrepreneurship refers to entrepreneurial activities undertaken in response to adverse circumstances such as unemployment, poverty, or the need to balance work and family responsibilities. In these cases, individuals are pushed into entrepreneurship not because they perceive an attractive opportunity, but because alternative income-generating options are limited or unavailable. While necessity-driven entrepreneurship has received increasing attention in general entrepreneurship research, it remains largely neglected in the digital entrepreneurship literature.

This neglect is particularly striking given the widespread adoption of digital platforms and the growing prevalence of economic insecurity in developed countries. Students, single parents, migrants, and the long-term unemployed increasingly turn to digital platforms to supplement their income or secure basic livelihoods. Yet their activities rarely fit the dominant models of digital entrepreneurship, which prioritize innovation, growth, and formal business structures. As a result, necessity-driven digital entrepreneurs remain largely invisible in academic research and policy debates.

 

Understanding Subsistence Entrepreneurship

Subsistence entrepreneurship provides a useful theoretical lens for understanding necessity-driven entrepreneurial activities. Subsistence entrepreneurship is defined as entrepreneurial action undertaken by individuals living in conditions of poverty, where the primary objective is survival rather than profit maximization or business growth. This form of entrepreneurship is characterized by small-scale operations, minimal capital investment, and close integration with everyday life.

Research on subsistence entrepreneurship has predominantly focused on developing countries, where it constitutes a significant part of economic activity. In these contexts, large segments of the population engage in informal entrepreneurial activities due to limited access to formal employment. Subsistence entrepreneurs often face severe constraints, including limited financial resources, low levels of education, restricted access to credit, and weak institutional support. Despite these challenges, they remain economically active by leveraging social networks and informal markets.

A defining feature of subsistence entrepreneurship is its embeddedness in local social contexts. Economic activities are closely tied to community relationships, cultural norms, and social obligations. Transactions are often negotiated face-to-face and governed by trust rather than formal contracts. As a result, subsistence entrepreneurship cannot be fully understood through conventional economic models that abstract from social relations.

The Decline of Subsistence Markets in Developed Economies

In developed countries, subsistence entrepreneurship has historically been less visible due to the erosion of local social networks and the regulation of informal economic activities. In the past, working-class communities in industrialized societies relied heavily on informal exchanges of goods and services. Neighborhoods functioned as marketplaces for mutual aid, small-scale trade, and social support.

However, processes such as deindustrialization, urban restructuring, and increased labor market segmentation have weakened these community-based networks. At the same time, public policies aimed at regulating informal markets and discouraging unregistered economic activity have further limited opportunities for subsistence entrepreneurship. As a result, individuals living in poverty in developed countries often face a dual disadvantage: they lack both financial resources and the dense social capital that supports informal economic exchanges.

 

Peer-to-Peer Digital Platforms as a New Opportunity Structure

The emergence of peer-to-peer digital platforms has fundamentally altered the opportunity structure for subsistence entrepreneurship in developed economies. Digital platforms enable individuals to connect with large and diverse networks of peers, overcoming the spatial and social limitations of traditional local markets. Platforms such as Facebook buy-and-sell groups allow users to engage in economic exchanges with minimal technical expertise and financial investment.

These platforms reduce transaction costs, lower entry barriers, and mitigate some of the institutional constraints associated with formal entrepreneurship. They allow individuals to monetize low-value goods, undervalued skills, and surplus resources that would otherwise remain outside formal markets. In doing so, they create opportunities for micro-scale entrepreneurial activities that are compatible with the constraints faced by individuals living in poverty.

 

The Central Role of Social Capital in Subsistence Entrepreneurship

Social capital plays a crucial role in enabling subsistence entrepreneurship, particularly in contexts where financial and institutional resources are scarce. Broadly defined as the collection of social ties and shared norms that facilitate coordinated action, social capital provides access to information, resources, and support. For subsistence entrepreneurs, social capital often serves as a substitute for financial capital.

In subsistence markets, dense local networks enable entrepreneurs to access informal peer-to-peer markets where small-scale transactions can take place. These networks facilitate trust, reduce transaction costs, and allow for flexible negotiation of prices and quantities. Social capital also provides emotional and psychological support, helping individuals cope with uncertainty and economic hardship.

Empirical studies have shown that subsistence entrepreneurs in developing countries are often resource-poor but network-rich. Their social ties enable them to share information, pool resources, and sustain their livelihoods. Social capital thus constitutes the primary asset upon which subsistence entrepreneurship is built, shaping both economic outcomes and social well-being.

Digital Platforms and the Restoration of Social Capital

Beyond their economic functions, peer-to-peer platforms play a crucial role in restoring social capital in developed contexts. Digital platforms facilitate horizontal connections among users, enabling both strong and weak social ties. They allow individuals to maintain existing relationships while also expanding their networks to include acquaintances, group members, and local peers.

In the context of digital subsistence entrepreneurship, these connections provide access to informal markets, information, and social support. Transactions are often embedded in social interactions, echoing the characteristics of traditional subsistence markets. As such, digital platforms recreate, in digital form, the social conditions that once sustained subsistence entrepreneurship in physical communities.

 

Empirical Insights from Facebook Buy-and-Sell Groups

The empirical findings of this study show that individuals engaging in digital subsistence entrepreneurship primarily pursue survival-oriented goals. Their activities are aimed at generating supplemental income, managing household expenses, and coping with financial instability. However, these activities also generate a range of non-financial benefits.

Participants report hedonic benefits such as creative satisfaction and enjoyment derived from making or selling goods. They also experience relational benefits, including opportunities to meet new people, form social ties, and develop a sense of community belonging. Symbolic benefits are equally important, as participation in digital markets enhances self-esteem, restores a sense of agency, and allows individuals to redefine their roles within the household and society.

Implications for Theory and Public Policy

By highlighting the existence of digital subsistence entrepreneurship in developed economies, this research challenges dominant models of digital entrepreneurship and calls for a more inclusive theoretical framework. It demonstrates that digital entrepreneurship is not limited to innovation-driven ventures but also encompasses survival-oriented practices that address both economic and social needs.

From a policy perspective, the findings underscore the need for regulatory approaches that recognize the diversity of entrepreneurial activities within the sharing economy. Policies designed exclusively for high-growth digital firms risk marginalizing vulnerable populations who rely on digital platforms for survival. Supporting digital subsistence entrepreneurship requires balancing regulation with inclusivity, ensuring that digital platforms remain accessible while protecting users from exploitation.

Digital subsistence entrepreneurship represents a significant yet overlooked dimension of contemporary economic life in developed countries. Enabled by peer-to-peer platforms and grounded in digitally mediated social capital, these practices allow economically vulnerable individuals to cope with poverty, maintain social ties, and assert dignity and agency. Recognizing and integrating this form of entrepreneurship into academic research and public policy is essential for understanding the full social impact of digital platforms and for building more equitable digital economies.