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Member News: C.C. Eship / NACCE Journal Winter/Spring 2010

A Conceptual Model for Entrepreneurship for Inmates

Tuesday, January 19, 2010   (0 Comments)
Posted by: Matthew Montoya
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By Amy Sauers, Ph.D.
Associate Professor of Entrepreneurship
St. Petersburg College, St. Petersburg, FL
Interest is growingin prisoner entrepreneurship programs as an answer to the crisis of imprisoning more than one in 100 Americans, one in 15 black men, and a tripling of the prison population within the last 20 years (The Pew Center on the States, 2008). The Obama administration’s setting of the goal to break down barriers to employment after release from prison is indicative of this sentiment.

If the alarmingly high recidivism rate is lowered, the overall prison population will be lowered over time. How best to achieve this recidivism reduction is being investigated. Programs such as college education for inmates, working while imprisoned, and entrepreneurship programs are piloted to assess the specific intervention’s affect on recidivism reduction.

This research is needed now because the U.S. imprisons more people than any other nation and costs are growing: The U.S. prison system costs $57 billion a year (Elsner, A., 2004). Working while in prison, however, allows inmates to gain employable skills and defray some costs. Becoming employable lowers recidivism rates, although the stigma of imprisonment can remain.

Data show that various programs are successful in lowering the recidivism rates; however, the system has not kept pace with what works. While one out of three black men are likely to be imprisoned at some point in their lives, over two-thirds of all released prisoners are rearrested within three years (U.S. Department of Justice, 2002).

Studies reveal that the programs that are effective in lowering recidivism rates and thus cutting costs are inmate treatment programs (Oklahoma), community drug treatments (Missouri), college education programs (New York, Massachusetts, Maryland), and lowering the number in the prison population itself (Michigan). Among the most promising of these programs are the prisoner entrepreneurship programs (PEP) as the recidivism rate is as low as 8 percent and the employment rate is more than 80 percent within 30 days of release (Prison Entrepreneurship Program, 2009).

Shared Traits

The marrying of the inmate population to the field of entrepreneurship seems logical as both inmates and entrepreneurs share some fundamental psychological traits. The need to be innovative and seize opportunities when the current mode of society does not see things the same way is shared by both groups. In addition, entrepreneurs by definition destroy some current mode of social operating to create anew: Joseph Schumpeter (1950) termed the economic force of entrepreneurship "creative destruction.” Inmates share in this experience of operating outside the realm of "normal” society. Thomas Kuhn’s (1962) work supports the idea that innovation (a paradigm shift) occurs after a discontinuity in the "normal” progress within a social group.

A growing theoretical foundation exists regarding the psychological attributes of those who start new ventures (criminal or legitimate) to seize unmet market needs. These theoretically grounded entrepreneurial characteristics, such as the need for autonomy and a willingness to disregard conventions, were first put forth by Baumol (1990), who theorized that when the limited labor market meets the entrepreneurial personality, criminal ventures promulgate.

Baumol had such an impact on the field of economics (stemming from Schumpeter) that The Economist in 2006 published a "thank you” to Baumol, noting that economists now have room for entrepreneurs in their theories. Economic theory had been based largely on monetary supply, price, the role of regulation, the value of currency, the importance of a trade stance, and notions about supply and demand. Baumol showed that incentives given to support legitimate enterprise could tip the individual’s trade-offs in favor of productive entrepreneurship (rather than towards criminal endeavors). The personality profile of both inmates and entrepreneurs tend towards non-conformity and risk-taking to seize opportunities most people would not notice.


Although the idea of inmates as entrepreneurs is not entirely new, systematic empirical entrepreneurship research has been lacking on this population. One notable exception to the dearth of such research is the Association for Small Business and Entrepreneurship’s "Best Paper” in 2006 that awarded an investigation of inmate entrepreneurship (Lockwood, Teasley, Carland, & Carland).

In Lockwood, et al’s study of criminal entrepreneurs entitled, "An Examination of the Power of the Dark Side of Entrepreneurship,” the authors expounded upon the similar personality traits between inmates and entrepreneurs (2006). Personality attributes discussed included the need for power, free-spiritedness, independence, confidence, non-conformism, risk-taking, innovativeness, and the need for achievement as common entrepreneurial indicators.

The (2006) authors’ research objective was to understand prisoner characteristics under the working hypothesis that inmates are simply entrepreneurs in spirit, dabbling in socially unacceptable "enterprises.” To explore this idea, the authors measured inmates’ entrepreneurial drive, need for achievement, risk-taking, and innovation, and administered the Myers-Briggs personality test. Their results indicated that inmates are not noticeably different from entrepreneurs on the "outside” (Lockwood, Teasley, Carland, & Carland).

In addition, other studies have begun to link entrepreneurial attributes, tendencies, and behaviors with success in business. These works are important to the study of entrepreneurship for inmates to give validity to the key entrepreneurship constructs to measure in order to build a strong theoretical base for the field.

PEP Success in Texas

The biggest PEP is in Texas. The program is growing quickly and uses business people and Baylor University MBA students to serve as mentors to inmates in the entrepreneurship training program. Inmate entrepreneurs have started 55 businesses, and more have attained quick employment. PEP follows a certain proposed operating model: In prison, the inmate engages in business and life-skills training, as well as a business plan competition. Post-release, former inmates continue in E-School (entrepreneur school) and receive job placement, reintegration assistance, and life coaching. The final stage involves launching the planned business and executive mentoring.

These common scales and the operations model for PEP are taken into account in the development of a conceptual model for inmate entrepreneurship. The conceptual model for inmate entrepreneurship consists of entrepreneurial "inputs” or attributes/behaviors/values, applied entrepreneurship training (the process of transformation), and entrepreneurship as an outcome. (The field of entrepreneurship research has been grappling with an "attributes” vs. "behavior” mindset as requisite for entrepreneurship. This conflict is not a focus of this paper’s research or scope.)

The three main stages (entrepreneurial attributes/behaviors/values, entrepreneurship training, and practicing entrepreneurship) are commonly known entrepreneurship constructs in the literature (Greene, P., & Rice, M., 2007). In addition, the key variables to assess the progress through these stages are common measures used in entrepreneurship research (Fernald, L., Solomon, G., Tarabishy, A., 2005).

In addition to the conceptual model that can be systematically tested and refined, the socio-emotional impetus within the inmate entrepreneur should be considered. These emotional-readiness indicators can be measured for a more complete understanding of the drivers of transformation.

Personal growth and transformation has been extensively researched and applied to the recovery field (Jung, C. & Jaffe’, A., 1965). This body of research suggests that personal transformation occurs in general developmental emotional-readiness stages. These internal emotional stages can bring about transformation most effectively if they map to the entrepreneurship program stages. Personal, emotional transformation can be viewed as a developmental process of separation, initiation, and return (Campbell, J., 1949). The emotional basis for motivation is well documented in the literature (Buck, R., 1964).

Transformation is likely to be more successful if inmates are emotionally prepared for this commitment to transformation. For example, the PEP program in Texas is highly selective. Only about 20 percent of those who apply are accepted into the program (Prisoner Entrepreneurship Program, 2008). This selectivity confers upon those chosen a sense of separateness from what they’ve known before.

In the middle phase, inmate entrepreneurs are initiated into the world of entrepreneurs where cultural norms begin to take shape. The training is applied training in value creation, marketing and sales, and financial planning for their own business idea. Last, the entrepreneurship phase supports entrepreneurs "bringing home” their new business ventures.

In conclusion, inmate entrepreneurs may follow the process model for moving through the stages of entrepreneurship. The constructs are validated by prior research. In addition, the internal emotional processes within the inmate entrepreneur logically overlay the stages. Using the conceptual model for the development and testing of inmate entrepreneurship is recommended with the understanding that the model will evolve based on empirical support. Programs developed to support the inputs, throughputs, and outcomes within each stage in the proposed conceptual model will likely be more successful than a haphazard approach.


Alexander, B., University of Michigan, (2008). Rising prison population an undeclared national crisis. 1 Apr 2008. Baumol, W. (1990).

Entrepreneurship: Productive, Unproductive and Destructive, Journal of Political Economy, Vol. 98(3), pp. 893-921.

Buck, R. (1984). The Communication of Emotion. New York: Guilford Press.

Campbell, J. (1949). The Hero with a Thousand Faces. Pantheon Books. Princeton University Press 1968:

ISBN 0-691-01784-0; Bollingen 2004 commemorative hardcover: ISBN 0-691-11924-4; New World Library, 3rd Edition, 2008: ISBN 978-1577315933

Elsner, A., (2004). Gates of Injustice. FT Press: ISBN: 0131427911.

Fernald, L., Solomon, G., and El Tarabishy, A. (2005). A New Paradigm: Entrepreneurial Leadership. Southern Business Review, 30 (2), 1-10.

Greene, P., & Rice, M., (2007). Greene, P.G. & Rice, M. (Editors). (Forthcoming) Entrepreneurship Education. Edited volume. Cheltenham, UK: Edward F. Elgar Publishing.

Jung, C.G.; Aniela Jaffé (1965). Memories, Dreams, Reflections. New York: Random House.

Kuhn, T. (1962). The Structure of Scientific Revolutions, 1st. ed., Chicago: Univ. of Chicago Press.

Lockwood, Teasley, Carland, & Carland (2006). Association for Small Business and Entrepreneurship.

Prison Entrepreneurship Program, (2009). Results. x

Schumpeter, J. (1950). Capitalism, Socialism, and Democracy. New York: Harper & Row.

The Economist in 2006. March 11, pp 68.  

¬¬The Pew Center on the States, (200¬8). 1 in 100: Behind Bars in America 2008. US Department of Justice, (2002). Criminal Offender Statistics.

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