Are “auto-entrepreneurs” entrepreneurs or not, and Why should we care?

Abstract

The aim of this article is to critically analyze the outcomes of entrepreneurial programs when
the same are not adequately aligned with the features that define entrepreneurship and the
entrepreneur. Taking the “auto-entrepreneur” 1 status in France as an example, we offer an
illustration of the practical implications resulting from a lack of coherence between a legal
status, aimed at encouraging entrepreneurship, and the conceptual basis of what it means to
be an entrepreneur. Our analysis leads us to observe the reasons why the status is
becoming a recurring object of independent activity as opposed to a source for new
business creation. We conclude with some insights on the considerations that governments
must do, when creating programs that intend to promote entrepreneurship and hybrid-
entrepreneurship.

Full text

ARE “AUTO-ENTREPRENEURS” ENTREPRENEURS OR NOT, AND
WHY SHOULD WE CARE?
Fernanda Arreola, Andrés Dávila, Cindy Felio, Jean-Yves Ottmann
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2017/3 n° 34 | pages 57 à 68
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Entreprendre & Innover / 57
Hybrid entrepreneurship
Are “auto-entrepreneurs”
entrepreneurs or not, and
Why should we care?
> Fernanda Arreola
> Andrès Davila
> Cindy Felio
> Jean-Yves Ottmann
Abstract
The aim of this article is to critically analyze the outcomes of entrepreneurial programs when the same are
not adequately aligned with the features that define entrepreneurship and the entrepreneur. Taking the
“auto-entrepreneur”1 status in France as an example, we offer an illustration of the practical implications
resulting from a lack of coherence between a legal status, aimed at encouraging entrepreneurship, and the
conceptual basis of what it means to be an entrepreneur. Our analysis leads us to observe the reasons why
the status is becoming a recurring object of independent activity as opposed to a source for new business
creation. We conclude with some insights on the considerations that governments must do, when creating
programs that intend to promote entrepreneurship and hybrid-entrepreneurship.
1 Named “micro-entrepreneur” since 2016.
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58 /
Are “auto-entrepreneurs” entrepreneurs or not, and Why should we care?
scaling and expansion of their businesses4.
Another approach is that of Knight5 and
Drucker6 who both point to entrepreneur-
ship as a risk-taking activity. Knight con-
siders that entrepreneurs are those who
assume responsibility for uncertainty,
undertaking activities that they cannot be
insured against7.
A fourth paradigm views entrepreneur-
ship as an evolutionary process that goes
through different stages: from concep-
tion, to infancy, from adolescence to matu-
rity8. This paradigm explains the selection
mechanisms that allow entrepreneurial
4 Gartner, W. B. (1990). “What are we talking about when
we talk about entrepreneurship?” Journal of Business
Venturing, 5(1), 15-28.
5 Knight, F. H. (1921). Risk, uncertainty and profit. New
York: Hart, Schaffner and Marx.
6 Drucker, P. (1970). “Entrepreneurship in business enter-
prise”. Journal of Business Policy, 1(1), 3-12.
7 Knight, F. H. (1921). Risk, uncertainty and profit. New
York: Hart, Schaffner and Mar.
8 Aldrich, H. E., & Martinez, M. A. (2001). “Many are
called, but few are chosen: An evolutionary perspective
for the study of entrepreneurship”. Entrepreneurship
Theory and Practice, 25(4), 41-56.
Scholars studying entrepreneurship
often call into question the need to
seek a better definition of entrepreneur-
ship as a key condition for the develop-
ment of the field. While the debate on
this definitional issue has not led to any
concrete answers2, scholars do acknowl-
edge that entrepreneurship rests on a
set of common paradigms. First, we have
the traditional Schumpeterian view that
highlights the decisive role of innova-
tion and defines entrepreneurs as those
that take advantage of market opportu-
nities via organizational and technical
innovations3.
A second paradigm explains entrepre-
neurship as an activity with a growth-
orientation, pointing that entrepreneurs
can improve their chances of survival
by encouraging actions that lead to the
2 Parker, S. C. (2004). The Economics of Self-Employment
and Entrepreneurship. Cambridge University Press.
3 Schumpeter, J. A. (1961). The theory of economic devel-
opment: An inquiry into profits, capital, credit, interest,
and the business cycle. Harvard University Press.
Highlights
• Theauto-entrepreneursstatusdemonstratesambiguousresultsthatare
difficulttointerpretasanadequatehybridstatustosupportentrepreneurship
inFrance.
• Theconceptof“auto-entrepreneur”emphasizesveryfewofthekeytraits
andparadigmsthatareassociatedtoentrepreneurship.Auto-entrepreneur
statusfavorsindependentemploymentwhichisnotnecessarilyassociatedto
entrepreneurship.
• Toovercomeconceptualdifficultiesandtounderstandhowgovernment
policiesandincentivespromotetwodistinctformsofactivity(independent
versusthecreationofastart-up)researchersandpolicy-makersshouldworkat
dissociatingandclearlypresentthetwo.
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Entreprendre & Innover / 59
Fernanda Arreola, Andrès Davila, Cindy Felio, Jean-Yves Ottmann
projects to survive and that include pro-
cess (strategy) and context (environment).
A fifth paradigm sees the entrepreneur
as a coordinator of production, someone
who adds value by pooling resources that
were initially unavailable9. Coordination
may be defined as an improvement in the
allocation of resources, where a decision
maker takes an active position by accom-
modating resources that produce greater
outcomes10. A last approach focuses on
the personality of the entrepreneur,
establishing that he or she is more likely
to have a drive for achievement, control,
problem-solving skills and an innovative
capacity11. This paradigm also touches
on the entrepreneurial drive that comes
from need & opportunity12 as well as the
desire to have more independence and
autonomy13.
These different points of view allow us to
envisage a multi-dimensional definition
of the entrepreneur that may be seen
from agency (the capacity to take action),
developmental and creative perspectives.
They also show the wide range of inter-
pretations that can be given to the term,
depending on the context of research and
its application.
9 Say, J. B. (1846). Traité d’économie politique: Ou simple
exposition de la manière dont se forment, se distribuent
et se consomment les richesses. Guillaumin.
10 Casson, Mark C. (1982) The Entrepreneur: An Economic
Theory. Oxford: Martin Robertson [2nd. ed., 2003].
11 Thornton, P. H., & Flynn, K. H. (2003). Entrepreneurship,
networks, and geographies. In Handbook of entrepreneur-
ship research, Acs, Z. J. & Audretsch, D. B. Springer.
12 Fayolle, A. (2010). “Nécessité et opportunité: les ‘at-
tracteurs étranges de l’entrepreneuriat”. Revue Pour,
n° 204, 33-38.
13 Shane, S., Kolvereid, L., & Westhead, P. (1991). An ex-
ploratory examination of the reasons leading to new firm
formation across country and gender. Journal of Business
Venturing, 6, 431-446.
France, the country
of auto‑entrepreneurs?
“Make France a country of entrepreneurs”,
these are the words spoken in 2007 by
Hervé Novelli, French Secretary of State in
charge of small and medium-sized enter-
prises who was anticipating the creation
of the forthcoming status of the French
auto-entrepreneur. Historically and as
of the late 1970s, French policies have
often strived to make everyone a business
owner. Indeed, in 1976, Prime Minister
Raymond Barre, claimed that entrepre-
neurship would be the key strategy to
jumpstart a stagnating economy, stating
that encouraging the unemployed to set
up their business was the answer to rising
unemployment.
In recent years, fostering entrepreneur-
ship has gained momentum and re-
gained notoriety becoming a top issue in
the political agenda. Simultaneously, the
number of new businesses increased from
17,500 in 2000 to 29,000 by January 2008.
By September 2016, the number had
reached 47,500. Since the appearance
of the auto-entrepreneur status in 2009,
half of new businesses are created under
its umbrella14.
The status of auto-entrepreneur was
created with the purpose of facilitating
entrepreneurship by reducing administra-
tive formalities and providing economic
incentives (e.g., a decrease in welfare con-
tributions and VAT exemption amongst
others). The status was shaped as a cen-
terpiece of the administrative simplifica-
tion policy initiated in France by the 2008
“Modernization of the economy” act. This
act resulted from the recommendations
14 Omalek, L., & Rioux, L. (2015) Emploi et Revenus Des
Indépendants. Références. INSEE.
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60 /
Are “auto-entrepreneurs” entrepreneurs or not, and Why should we care?
of a small committee of business and
political actors who agreed on the need
to simplify the business creation process,
deemed bureaucratic and complex15.
According to the French Chamber of
Commerce auto-entrepreneur is, firstly,
the owner of a “solely owned enterprise”;
secondly, someone who is independent;
thirdly, someone who benefits from a spe-
cial and simplified form of social security;
finally, someone who can opt for a prefer-
ential tax regime but also the regime of
unlimited liability.
Ű Auto‑entrepreneurs ten years after
When it was first launched the “auto-
entrepreneur” status was praised by the
political class as well as by the media,
both claiming it to be a key initiative to
reduce unemployment, create new firms,
launch entrepreneurs and empower work-
ers16. The program was also presented as a
form of hybrid entrepreneurship, an occu-
pation that could be performed in parallel
of a wageworker, retired or a student17.
This notion corresponds well with the aca-
demic definition of hybrid entrepreneurs,
who are individuals that launch their ven-
tures while receiving a salary or wage18.
However, as time passed new voices have
emerged challenging the real outputs of
the program and the fact that it seems to
have encouraged a diversion of traditional
15 Abdelnour, S. (2013). “The Administrative and Political
Inception of the ‘Auto-Entrepreneur’ Regime”. Sociétés
contemporaines, (1), 131-154.
16 Idem.
17 Devenir Micro-entrepreneur, site from the French
Government, retrieved from https://www.service- public.
fr/professionnels-entreprises/vosdroits/F23961 on Jan-
uary 28, 2018.
18 Folta, T. B., Delmar, F., & Wennberg, K. (2010). Hybrid
entrepreneurship. Management Science, 56(2), 253-269.
wage-employment towards independent
labor19.
Although the initial aim of the program
was to foster business creation and entre-
preneurship, the heterogeneity of its
users, and the opacity of reliable infor-
mation, makes it difficult to differentiate
between wageworkers trying to use the
status to make ends meet, the wage-
earners recruited as tertiary workers (driv-
ers, carriers, etc.) and those engaged in
the creation of new businesses.
Studies show that the auto-entrepreneur
status is often adopted by necessity and in
a rather constrained way, which does not
lead to real business creation. Moreover,
it appears that self-entrepreneurs per-
ceive very low incomes20. Finally, becom-
ing an entrepreneur by default, because
there is no salaried contract in view,
places the auto-entrepreneurs in an awk-
ward economic position21. In light of these
observations, many authors deplore the
perverse effects of a policy that seems to
contribute to developing the precarious-
ness of individuals22 and not necessarily
decreasing the risk of entrepreneurship.
This leads to one key question. Why is it
that this status, did not lead to the sought
government outcomes?
19 Fayolle, A., & Nakara, W. (2010). « Création par néces-
sité et précarité: la face cachée de l’entrepreneuriat ».
Cahier de recherche, n° 2010-08 E4.
20 Domens, J., & Pignier, J. (2012). « Auto entrepreneurs :
au bout de trois ans, 90 % dégagent un revenu inférieur
au Smic au titre de leur activité non salariée ». Insee pre-
mière, 1414, 1-4.
21 Fayolle, A., & Nakara, W. (2010). « Création par néces-
sité et précarité: la face cachée de l’entrepreneuriat ».
Cahier de recherche, n° 2010-08 E4.
22 Fayolle, A., & Pereira, B. (2012). « L’encouragement
à l’auto-entrepreneuriat est-il une bonne politique pu-
blique pour l’esprit d’entreprendre et la création d’entre-
prises ? ». Annales des Mines-Gérer et comprendre, n°1,
52-62.
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Entreprendre & Innover / 61
Fernanda Arreola, Andrès Davila, Cindy Felio, Jean-Yves Ottmann
Ű Is an auto‑entrepreneur
an entrepreneur?
In order to answer to this question, we
decided to contrast the entrepreneurship
paradigms against the particularities of
the auto-entrepreneur status. Our analy-
sis intends to bring light and clarity to
the reasons why the program has been
resulting in outcomes other than entre-
preneurial creation. To do this, we bring
our conceptual review of the most rel-
evant entrepreneurship paradigms, and
we contrast the auto-entrepreneur status,
against them.
With regards to innovation, Schumpeter
establishes that entrepreneurs are able to
recombine elements in order to make new
products, markets, sources and economic
organizations23. The auto-entrepreneur
status itself has limitations for innovation
first, because of an impossibility to realize
investments because both the TVA (value-
added tax) cannot be deducted and sec-
ondly because the investment cannot be
amortized. Secondly, the entrepreneur is
also constrained by financing opportuni-
ties, as he does not have access to public
innovation incentives as those associated
with France’s investment arm BPI, limited
to firms as opposed to individuals24.
Meanwhile the risk-orientation of the
entrepreneur can be explained, according
to Knight, as “the system under which the
confident and venturesome ‘assume the
risk’ or ‘insure’ the doubtful and timid by
guaranteeing the later a specified income
23 Schumpeter, J. A. (1936). The General Theory of
Employment, Interest and Money.
24 The innovation aids are limited to PMEs and business-
es with elss than 2,000 employees, retreived from http://
www.bpifrance.fr/Toutes-nos-solutions/Aides-concours-
et-labels/Aides-a-l-innovation-projets-individuels/Aide-
pour-le-developpement-de-l-innovation on January 25,
2018.
in return for an assignment of the actual
results”25. This perspective calls for the
entrepreneur to assume a responsibility
over its actions, while acknowledging an
adventurous position. In terms of this risk
the law of August 4, 200826 establishes
that the personal assets of an entrepre-
neur are liable for any of the activities
that he or she undertakes as well as for
backing up any contracts. This means
that the entrepreneur is firstly and solely
responsible for the risk associated to his
firm. Also, the auto-entrepreneur does
not receive the protection of the “Baux
commerciaux” status, which makes him
susceptible to have his rent contract
rescinded before 9 years and also not to
benefit from a maximum level of increase
of the yearly rent. Indeed, Levratto and
Serverin27, show “that the modest results
obtained by AEs are not offset by a lower
level or range of risk. On the contrary, AEs
are subject to increased risks compared to
other forms of business. We note further
that their isolation and the impossibility
of relying on an organization that is the
corollary, are accompanied by additional
risks, specific to this regime”.
In terms of evolution, Aldrich & Martinez
acknowledge in their theoretical devel-
opment that entrepreneurs must fol-
low a path, a development process that
goes from conception to launch. In this
sense the auto-entrepreneur status does
seem to align with this idea, as it facili-
tates the transformation of an idea into a
25 Knight Frank, H. (1921). Risk, uncertainty and profit.
книга. Pg. 269.
26 Retrieved from https://www.legifrance.gouv.fr/
affichTexte.do?cidTexte=JORFTEXT000019283050, on
January 26, 2018.
27 Levratto, F. & Serverin E. (2015). L’auto-entrepreneur,
au risque de l’entreprise. HAL, https://halshs.archives-
ouvertes.fr/halshs-01300226/document seen 28/01/18.
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62 /
Are “auto-entrepreneurs” entrepreneurs or not, and Why should we care?
project. Additionally, this status does not
restrict the number of days or hours that
an employee can dedicate to his project,
therefore facilitating to a certain extent,
the transition into another phase, some-
thing that would not be the case under
normal wage employment contracts in
France.
When considering the growth orienta-
tion, we see that there are at least three
factors that forbid this perspective from
taking place. The first is the very low
maximum revenue that can be declared
by auto-entrepreneurs, set, until 2016 at
32,900€. To give some perspective on this
value, we can see that, according to the
OCDE, the average gross income in France
for the same year was 35,809€. The sec-
ond detriment to growth is the aforemen-
tioned inability of entrepreneurs to deduct
expenses. In fact not only are these not tax
deductible but also, they do not decrease
the maximum revenue ceilings. The last
factor affecting growth is the firm’s readi-
ness, planning and projection. According
to the Barometer Ciel 2009, only 13% of
auto-entrepreneurs had a business plan
before launching28. Preparation is, one of
the crucial attributes leading to growth,
since it allows the entrepreneur to bet-
ter establish its positioning and strategy.
Finally, the CIEL report also states that
72% of entrepreneurs at the time (2009)
were not willing to transform their activ-
ity into other types of status (for exam-
ple in an SME) which is very indicative of
the interest of keeping a side activity. In
this same line, only 1% of entrepreneurs
report the desire to have the maximum
revenue limit increased.
28 Baromettre Ciel 2009, retrieved from https://www.
ciel.com/RessourcesCiel/Binaires/pdf/presse/dp/
Barometre_Ciel_Auto_entrepreneur_071009.pdf on Jan-
uary 22, 2018.
The coordination aspect means that
the entrepreneur is capable of putting
together resources. Here our analysis
is that the auto-entrepreneur status
does allow for this capacity, but has two
limitations: First, the lack of incentives
for investments; secondly, the limita-
tion of human resources, since no other
employee can be hired. This means that
the person will be limited by his personal
coordination capacity and the to the limit
of the number of hours he can afford to
invest in his project.
In terms of attitudes and traits, there is lit-
tle information about the key motivations
of auto-entrepreneurs, although there
is a natural orientation of the program
towards independence. The Barometer
Ciel establishes that 47% of them do their
activity full-time. In terms of motivations
there seems to be a desire to create a pro-
ductive activity easily (81%). Within the
motivation, another report, prepared in
2014 by the Union des Auto-Entrepreneurs,
establishes that the three key motivations
of auto-entrepreneurs are to make sure to
take a minimum revenue (27%), to make
at least the minimum-wage (26%) and to
make sure to be able to pay taxes (23%).
Meanwhile, the same report also shows
a high affiliation of auto-entrepreneurs
with the idea of being entrepreneurs,
as the majority of them do identify that
their key objective is to make their activ-
ity a success.29 We believe that this appre-
ciation is a result of the messaging and
communication of the government which
without a doubt emphasizes this program
29 Regards croisés sur l’auto-entrepreneuriat, re-
trieved from http://www.union-auto-entrepreneurs.
com/wp-content/uploads/2015/05/Avril-2014-Lauto-
entrepreneuriat-vu-par-les-fran%C3%A7ais-et-les-
professionnels-11juin2014.pdf on January 25, 2018.
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Entreprendre & Innover / 63
Fernanda Arreola, Andrès Davila, Cindy Felio, Jean-Yves Ottmann
as one that can lead people to entrepre-
neurial success.
Following this review we can gather
that the concept of “auto-entrepreneur”
emphasizes very few of the key traits and
paradigms that support entrepreneurship.
The table 1 summarizes our discussion.
Ű The consequences for policy
making
The previous analysis allows us to under-
stand the source of many of the irrec-
oncilable contradictions that lead the
auto-entrepreneur status at odds of
encouraging entrepreneurship. In order to
further our analysis we think it is impor-
tant to review the additional policies and
incentives deployed by the government
to accompany the auto-entrepreneur
status.
In table 2, we introduce a non-exhaustive
list of existing policies and incentives for
commercial development (as an indica-
tor of growth) and innovation. This table
provides practical insights and exposes
how the auto-entrepreneurs incentives
and programs for growth and innova-
tion do not match the criteria treated in
entrepreneurship literature. By doing so,
we provide evidence, on the reasons why
current policies are shaping the auto-
entrepreneur status into an independent
contracting arrangement rather than into
entrepreneurship.
We have restricted our analysis to one
case in point: the incentives given to the
digital technology industries located in
the Ile-de-France region. Indeed, since
there is a trend for web developers to do
business independently (or as free-lanc-
ers), we consider the digital industry to
be a relevant example for our demonstra-
tion. Also, we have chosen to focus only
on incentives geared toward commercial
development (consequently used as incen-
tives for growth) and incentives for inno-
vation. We found 125 available incentives,
50 commercial development incentives
and 75 innovation incentives provided by
government and state-run institutions.
We present in the following table the 15
most popular policies and incentives that
are clearly related to the impediment
or development of growth and innova-
tion in the case of auto-entrepreneurs or
enterprises.
Table 1: Entrepreneurial paradigms and entrepreneurship concepts: contrasting the
entrepreneur’s definition against the auto-entrepreneur status
Entrepreneurial paradigm Entrepreneur Auto-entrepreneur
Innovation (Schumpeter, 1965) Yes Limited
Risk-orientation (Knight, 1921) Yes Yes but higher uncertainty
Evolutionary Perspective (Aldrich &
Martinez, 2001) Yes At creation
Growth orientation (Gartner, 1990;
Gandry & Welsh, 2001) Yes No
Coordination (Say, 1946) Yes Limited
Attitudes / Traits (Robinson & al, 1991) Yes Not sufficient information
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64 /
Are “auto-entrepreneurs” entrepreneurs or not, and Why should we care?
Table 2: Examples of policies and incentives to promote growth (commercial development) and innovation
Status Policy or Incentive Description Insights
Auto-
entrepreneur,
policies and
incentives
Limited turnover (policy) To differentiate the auto-entrepreneur
from enterprises
The turnover limitation and the nature of the status
do not provide access to many of the available
incentives for enterprises
Auto-
entrepreneurs
and enterprises:
policies and
incentives
Business Incubators Social
Factory
Up to 30k € of incentive (BPI + Mairie de
Paris)
Incubation cost and free rent
The incentive is given to entrepreneurs having a
nascent idea and working in the social and solidarity
sectors
Enterprises:
policies and
incentives
Paris Innovation Amorçage –
Ville de Paris
30k € as incentive at priming
Cash-flow advances up to 100k € Provided only to newly created companies
Hub Startup: hosting and
support of young innovative
firms. Bpifrance
Provides guidance and networking
(financed by BPI)
The incentive is only provided to newly created
innovative startups.
INNOV’up – Conseil Régional
Ile-de-France
Feasibility, max. 30k €
Development and experimentation max. of
100k € Advances up to 1M €
Advances for major development projects,
max. 3M €
Auto-entrepreneurs are of course excluded from this
type of support.
Size and liability are essential to obtain these
incentives.
Program Inno’tech
entreprendre – Réseau
Entreprendre
Loan from 30k € to 90k € Only innovative enterprises
CICE – “Crédit d’impôt compéti-
tivité et emploi” - DDFIP Covers up to 7% of eligible salaries Not for Auto-entrepreneurs.
PhD grant - ADEME
Covers 50% of the salary of a Ph.D.
students + social contributions + 15% of
administrative fees.
Is only applicable for company that can hire a
person willing to do a Ph.D.
Jeune Entreprise Innovante
(JEI) et Jeune Entreprise
Universitaire (JEU)
JEI: reduction of social contributions
JEU: exemption of social contributions
Auto-entrepreneurs are not entitled to benefit from
this incentive
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Entreprendre & Innover / 65
Fernanda Arreola, Andrès Davila, Cindy Felio, Jean-Yves Ottmann
Enterprises:
policies and
incentives
DDFIP Depreciation on the investments applied
over 5 years
Auto-entrepreneurs are not expected to invest in
their ventures. Having incentives to do so could
eventually modify the nature of their activities and
accelerate growth.
BEI - BEI global loans Loans converting up to 50% of a needs for
large investments
Only for large projects. Therefore, only established
companies can benefit from it.
PM’up – Conseil Régional Ile-de-
France
Up to 250k € to finance, patents
developments, investments, international
development of activities, and executive
recruitment
This incentive cannot be offered to auto-
entrepreneurs as they are not allowed to hire. In
some cases, auto-entrepreneurs’ activities could
be international, yet they cannot have access to
incentives for international development.
API - Local grants Priming loan between 200k € and 500k €
with an interest rate of 1%
Obstacle in terms of turnover, size and liability.
Auto-entrepreneurs cannot expect to receive a loan
that could be up to 5 times their limited annual
turnover.
Technological partnership grant
- BPIFRANCE
Incentive up to 50k €
Or cash advance up to 50k €
Incentive for enterprises to collaborate in research
projects.
Innovation help - BPIFRANCE Incentive or reimbursable cash advance in
case of success.
Accessible if: a company belongs to a group of less
than 2000 employees.
Companies with fewer than 2,000 employees.
Activities:
B - Extractive Industries
C - Manufacturing
D - Electricity, gas, steam and air-conditioning
production and distribution
E - Water production and distribution; sanitation,
waste management and decontamination
F - Construction
J - Information and communication
M - Specialized, scientific and technical activities
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66 /
Are “auto-entrepreneurs” entrepreneurs or not, and Why should we care?
there are no elements that substantiate
such assumption. While the incentives
to some of the key features of hybrid-
entrepreneurs included the attractive-
ness for people with higher edu cation32,
technological development33, human
capital development34 are not aligned
with the auto-entrepreneur program, this
will continue, as shown, to be a driver of
independent employment, as opposed to
entrepreneurship.
A gap between policy
statements and real facts
Entrepreneurship and independent or
self-employment are two different types
of activity that hardly overlap in spite of
the important conceptual and practical
confusions that exist in the academic lit-
erature as well as in policies. This is one of
the reasons why promoting entrepreneur-
ship is not the most performing economic
policy or an adequate form of money dis-
tribution for reducing unemployment35.
From our review, we have showed that
the French government policies initially
sought to multiply the numbers of auto-
entrepreneurs (now micro-enterprises)
but the way in which the policy has been
set up, has been led to its use as a labor
status that favor independent contract-
ing, especially for low qualified people.
The latter are the most concerned by
unemployment and the most associ-
ated with the usual auto-entrepreneur
32 Folta, T. B., Delmar, F., & Wennberg, K. (2010) Hybrid
Entrepreneurship. Management Science, 56(2): 253-269.
33 Idem.
34 Petrova, K. (2012) Part-Time Entrepreneurship and
Financial Constraints: Evidence from the Panel Study of
Entrepreneurial Dynamics. Small Business Economics,
39(2): 473-493.
35 Shane, S. (2009) “Why Encouraging More People
to Become Entrepreneurs Is Bad Public Policy”. Small
Business Economics, 33(2), 141 49.
Ű Promoting “auto‑entrepreneur”
is promoting independent
employment, not entrepreneurship
As per our review, the analysis of poli-
cies conclusively shows that auto-entre-
preneurs are not eligible for incentives
that promote growth, coordination and
innovation, even when their activities
are related to research & development.
Consequently, if we consider growth,
coordination and innovation as key fac-
tors of entrepreneurship as explained
previously, current policies and incentives
do not promote it for auto-entrepreneurs
but mainly for enterprises. In that sense,
the government contributes to shaping
auto- entrepreneurs into self-employees
rather than into entrepreneurs. If auto-
entrepreneurs cannot develop forms of
entrepreneurship through growth, coordi-
nation and innovation strategies, we can
consider, that they are simply individuals
looking for alternative sources of revenue.
Moreover, the majority of French auto-
entrepreneurs do not have the minimum
wage and solvency conditions to become
entrepreneurs. They don’t earn a suf-
ficient income to live, contrary to other
self-employed workers30. They are, for a
large part, already engaged in a comple-
mentary activity, with a waged work, a
pension or an unemployment allocation
(at least 33%31). This reflection drives us
back to the introduction of our paper,
where we question the extent to which,
auto- entrepreneurs and the policies
accompanying them, will ever result in
a successful example of entrepreneur-
ship, and more specifically of hybrid-
entrepreneurship. We can conclude that
30 Omalek, L, & Rioux, L. (2015) Emploi et revenus des
indépendants. Références. INSEE.
31 Idem.
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Entreprendre & Innover / 67
Fernanda Arreola, Andrès Davila, Cindy Felio, Jean-Yves Ottmann
fully engage in growth entrepreneurship
as aforementioned.
Further, previous research has acknowl-
edge that real hybrid entrepreneurs are
attracted by appropriate policy37 and that
are faster to react to such, which can
make government programs easier to ana-
lyze, and to estimate their success. These
policies should take into consideration the
fact that these hybrid-entrepreneurs are
ready to invest their own salaries into mak-
ing their projects successful, find valuable
business opportunities, missed by full-
time entrepreneurs, have fewer effects in
case of business failure (because of hold-
ing another employment) and motivate
well educated individuals to test innova-
tion in new markets38,39,40, all key features
improving their chances of success.
Ű What is in a word!
To conclude, the French auto- entrepreneur
status must not be equated with entrepre-
neurship but rather as a measure of inde-
pendent employment. Entrepreneurship
and self-employment are two distinct
concepts: the first one is based on inno-
vation and growth and the second is a
way of receiving an income. This frequent
confusion in entrepreneurship research, is
a strong limitation to build research in a
robust way. But it is also restricts research
capacity to contribute or to criticize
37 Schulz, M., Urbig, D., & Procher, V. (2016). Hybrid
entrepreneurship and public policy: the case of firm en-
try deregulation. Journal of Business Venturing, 31(3),
272-286.
38 Folta, T. B., Delmar, F., & Wennberg, K. (2010). Hybrid
entrepreneurship. Management Science, 56(2), 253-269.
39 Panos, G. A., Pouliakas, K., & Zangelidis, A. (2014).
Multiple job holding, skill diversification, and mobility.
Industrial Relations: A Journal of Economy and Society,
53(2), 223-272.
40 Schulz, M., Urbig, D., & Procher, V. (2016). Hybrid en-
trepreneurship and public policy: the case of firm entry de-
regulation. Journal of Business Venturing, 31(3), 272-286.
activities. This policy strategy however,
is not necessarily against a larger policy
objective that affects Europe as a whole;
in fact the European Parliament encour-
ages member nations to promote self-
employment36, while working on the
quality of life it enables and the social
benefits and protections.
The problem with these policies is the fact
that they are portrayed by the govern-
ment as real entrepreneurship and hybrid-
entrepreneurship policies. We assume that
hiding the conflictual and ambiguous term
underpinnings results from the semantic
and conceptual limitations that affect not
only this status but the entrepreneurship
field in general. As long as no theoretical
and formal distinctions between the lim-
its of self and independent employment
against entrepreneurship exist, govern-
ments will either profit or be at odds with
producing comprehensive entrepreneur-
ship programs. This lack of appropriate
wording and often abusive presentation
also leads to overselling entrepreneurship
as the one best alternatives to the eco-
nomic issues faced by a struggling commu-
nity. It also leads to a rhetorical portrayal
of the entrepreneur as a heroic figure thus
making it easier for individuals to agree
to become an entrepreneur rather than
to become independent. Individuals may
feel the pinch of such biased communica-
tion in the longer term. There may be side
effects and a darker side to such termino-
logical confusion, including reduced pen-
sions, lower wages and meagre growth
perspectives for individuals that do not
36 Rapport sur les contrats atypiques, les parcours pro-
fessionnels sécurisés, la flexicurité et les nouvelles formes
de dialogue social (2009/2220(INI)). Commission de
l’emploi et des affaires sociales, retrieved from http://
www.europarl.europa.eu/sides/getDoc.do?pubRef=-//
EP//TEXT+REPORT+A7-2010-0193+0+DOC+XML+V0//FR,
on january 2018.
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68 /
Are “auto-entrepreneurs” entrepreneurs or not, and Why should we care?
should work at dissociating and clearly pre-
sent the two in future studies.
Finally, there may be an opportunity to
utilize the auto-entrepreneur (recently
evolved into the micro-entrepreneur) sta-
tus to enhance policy aimed at the crea-
tion of hybrid forms of-entrepreneurship
(by opportunity, choice or necessity).
However, in its current state, and under
the existing policy mechanisms, we can
argue this is not the attempt or the inter-
est of policy makers.
Fernanda Arreola, PhD in Strategy & Entrepre-
neurship, is a consultant and professor at EMLV
and researcher for the Léonard de Vinci Pôle
Universitaire, Research Center. Her activities focus
on nding new answers for economic, policy and
regulation systems and the way in which these af-
fect entrepreneurship, the internationalization of
the rm and innovation.
fernanda.arreola@essca.fr, 01 41 86 20 18
Andrés Dávila is professor at ESCE where he heads
the “International People Management” and the
“Well-being at Work & HRM” specializations. He is
also co-founder at www.praditus.com (a platform
for evaluation and skills development) where he
coordinates the research activities to help creating
innovative digital HR tools.
andres.davila@esce.fr, 01 84 14 02 98
Cindy Felio is a psychologist of work with a PhD in
Information and Communication Sciences. She has
done research into the consequences of ICT integra-
tion on managers and entrepreneurs. In 2016, Cindy
Felio joined the Laboratoire Missioneo team in their
quest to gain a better understanding of the expec-
tations and needs of present-day working people.
cindy.felio@missioneo.fr, 01 44 69 80 40
Jean-Yves Ottmann has a background in sociology
of work and a Phd in management. He came into
research after several years of professional activity
in change management and work stress preven-
tion. He studies new forms of employment and
self-employment.
jean-yves.ottmann@missioneo.fr, 01 44 69 80 40
entrepreneurship policies or policy mak-
ers, because one cannot talk about some-
thing that can’t be named.
Furthermore, we should underline that
governments must measure the outcomes
of their policies with more objective meth-
ods. In France, it is now mandatory to assess
the performance and implementation of
all projects and policies with objective indi-
cators. Therefore, increases in the number
of companies or the number of micro-
enterprises started by auto-entrepreneurs
may signal an upturn in entrepreneurship
while providing useful quantitative data.
Yet, the new indicators may only help to
partly measure up the results of the poli-
cies that have been implemented. This is
why we would recommend that the total
number of new enterprises and the total
number of new micro-enterprises should
not be bundled together under one single
entrepreneurship indicator that is likely to
invalidate the relevance and the robust-
ness of the measurement.
At a more theoretical level, and in view of
the state of the current literature on entre-
preneurship and independent work, it
seems almost impossible to reconcile two
distinct conceptual characteristics of entre-
preneurship with the categories of inde-
pendent work or self-employment. From a
methodological point of view, it is no longer
acceptable to merge the measurement of
the number of auto-entrepreneur statuses
with that of business venture creations,
as it is not the same to be an independ-
ent worker, as it is to open a new start-up.
Thus, to overcome conceptual difficulties
and to understand how government poli-
cies and incentives promote two distinct
forms of activity (independent vs contract
labor and the creation of new enterprises
vs self-employment) we think researchers
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