King's College London

Entrepreneurs driven by social and environmental goals may represent an overlooked engine of job creation during economic crises, according to new research co-authored by Professor Ute Stephan at King’s Business School.

The study, published in Small Business Economics, analysed data from more than 5,500 entrepreneurs across 48 countries during the Global Financial Crisis, offering rare international evidence on how entrepreneurs respond to economic shocks.

Contrary to conventional assumptions that crises suppress entrepreneurial ambition, the researchers found that socially and environmentally motivated entrepreneurs reported higher growth expectations than those primarily driven by profit.

Growth expectations are a key indicator used by policymakers to anticipate business expansion and job creation. Entrepreneurs who expect their firms to grow are more likely to invest resources, hire staff and pursue expansion strategies.

The research suggests that mission-driven entrepreneurs respond differently to crises because they see expanding social and environmental needs as opportunities to scale their impact.

The study was carried out alongside Dr Tran Ngoc Thien Thy (Ho Chi Minh University of Banking), Professor Tomasz Mickiewicz (Aston University) and Dr Emma Folmer (University of Groningen).

It also identified two key mechanisms that help explain this difference.

First, entrepreneurs driven by social and environmental goals reported lower levels of competition, as many commercially focused businesses scale back or exit during downturns. This effect was particularly pronounced among environmentally motivated entrepreneurs.

Second, these entrepreneurs were more likely to identify new opportunities during the crisis, especially where social and environmental needs were becoming more urgent.

Together, these dynamics suggest mission-driven entrepreneurs may be better placed to grow when traditional businesses pull back.

Rather than focusing solely on profit, they often aim to expand their impact, with job creation one possible outcome of that growth.

This points to a wider role for these ventures in supporting economic activity during periods of instability.

The authors argue that this potential remains largely overlooked in economic policy.

Professor Stephan said:

“Policymakers often focus on traditional high-growth entrepreneurship when thinking about job creation. Our findings suggest that socially and environmentally motivated entrepreneurs may be an important and underappreciated source of economic resilience during crises.”

The research also highlights broader implications for how entrepreneurship is understood.

While much entrepreneurship research assumes entrepreneurs are primarily motivated by financial returns, the study shows that different motivations can shape how entrepreneurs interpret crises and respond strategically.

The authors conclude that recognising this diversity in entrepreneurial motivations could help policymakers design more effective crisis-response policies that support both economic recovery and societal impact.

Related research by the authors shows that mission-driven entrepreneurship attracts a more diverse range of founders, including more women. This suggests that inclusive entrepreneurship may play a critical role in driving both economic recovery and resilience.

Read the full study, Growth expectations of entrepreneurs during crisis: the role of social, environmental, and economic motivations, in Small Business Economics.