Electronic Journal of Polish Agricultural Universities (EJPAU) founded by all Polish Agriculture Universities presents original papers and review articles relevant to all aspects of agricultural sciences. It is target for persons working both in science and industry,regulatory agencies or teaching in agricultural sector. Covered by IFIS Publishing (Food Science and Technology Abstracts), ELSEVIER Science - Food Science and Technology Program, CAS USA (Chemical Abstracts), CABI Publishing UK and ALPSP (Association of Learned and Professional Society Publisher - full membership). Presented in the Master List of Thomson ISI.
Volume 9
Issue 1
Available Online: http://www.ejpau.media.pl/volume9/issue1/art-30.html


Joanna Zaj±c
Department of Agrarian Policy and Marketing, Warsaw Agricultural University, Poland



The key role of non-agricultural economic activity in the transformation process as well as in giving up monofunctionality of Polish villages gave rise to the necessity to precisely analyse its character and to define its types. The presented analysis of non-agricultural economic activity was based on interviews with local authorities and on primary data for 1996-2003, gathered from registers of economic activity in offices of thirty-six communes in Mazovian Voivodship (NUTS II). The results of studies showed, however, that complication of social, economic, legal and cultural conditions resulted in quite new types of entrepreneurship run in surveyed communes during transition. The further stage of analysis enabled us to define eight new, untypical (when compared to classical definition) forms of entrepreneurship, which differ considerably from entrepreneurship types described in literature. These are: fictious, constrained and sub-contractual economic activities, economic activity registered alternatively among family members, as well as seasonal, cyclic, occasional and ‘sleeping’ economic activities.

Key words: non-agricultural economic activity, rural areas development.


Non-agricultural economic activity is the aspect of entrepreneurship that becomes the key problem in the context of economic system transformation and of the necessity to give up monofunctionality of Polish village. It plays a unique role for it may give rural population new differentiated sources of income, reduce registered and non-registered unemployment in farming, improve living standards in rural areas by widening range of goods and services and thus level differences between living standards in towns and villages, etc.

Non-agricultural economic activity which is a form of rural population entrepreneurship may be an effective way to achieve economic success in national and local scale. The key role of non-agricultural economic activity in the transformation process gave rise to the necessity to precisely analyse its character and to define its type e.g. according to types presented in the economic literature. The introductory studies showed, however, that complication of social, economic, legal and cultural conditions resulted in quite new types of entrepreneurship realised as non-agricultural economic activity in surveyed communes in 1996-2003. The further stage of analysis of data from Commune Offices registers, information from interviews with local authorities as well as regulations and laws controlling registration and running businesses enabled us to separate eight new, untypical (when compared to classical definition) forms of entrepreneurship, which differ considerably from entrepreneurship types described in literature.


The presented analysis of non-agricultural economic activity was based on primary data for 1996-2003, gathered from registers of economic activity in offices of the below listed thirty-six communes. Interviews with representatives of local authorities were another source of information on untypical forms of non-agricultural entrepreneurship in rural communes during transition.

Mazovian Voivodship is the biggest territorial NUTS II unit in Poland – it covers 11.4 per cent of the whole country. It is very differentiated, considering economic and social as well as geographic conditions. That is why we find on the map of this voivodship both areas located near large cities and agglomerations, making an important source of multifuntionality for rural areas, and typically rural areas facing all problems connected with this sector of economy.

In order to reflect the above mentioned differentiation within Mazovian Voivodship, the research sample contains of thirty-six (i.e. 16 per cent) rural communes (NUTS V), in six poviats (NUTS IV), in four subregions (NUTS III):

1) in ciechanowsko-płocki subregion, in żuromiński poviat, communes:
– Lubowidz, Lutocin, Kuczbork-Osada, Siemiatkowo Koziebrodzkie;

2) in ostrołęcko-siedlecki subregion, in sokołowski poviat, communes:
- Ceranów, Sterdyń, Jabłonna Lacka, Sabnie, Repki, Bielany, Sokołów Podlaski;

3) in warszawski subregion, in otwocki poviat:
Sobienie Jeziory, Osieck, Celestynów, Wiązowna, Kolbiel;
in żyrardowski poviat:
Wiskitki, Radziejowice, Puszcza Mariańska;

4) in radomski subregion, in garwoliński poviat:
Parysów, Borowie, Miastków Koscielny, Górzno, Garwolin, Łaskarzew, Sobolew, Trojanów, Maciejowice, Wilga;
in przysuski poviat:
Klwów, Potworów, Odrzywół, Borkowice, Rusinów, Gielniów, Wieniawa.

The survey was carried out at the turn of 2003 and 2004.


Entrepreneurship has many forms. In Polish and foreign economic literature we can find definitions of entrepreneurship based on different criteria, such as:

  1. kind criterion [1]:

  1. form criterion:

  1. place of entrepreneurial activity criterion [6]:

  1. agricultural entrepreneurship,

  2. non-agricultural entrepreneurship directly connected with farming,

  3. non-agricultural economy not connected directly with farming,

  1. ownership forms criterion [7]:

  1. types in Polish Classification of Activities:

  1. organisational and legal form criterion:

1. enterprise,
3. fund,
5. foundation,

2. association,
4. budget units and agencies,
6. financial institutions, etc.,

  1. entrepreneurial behaviour criterion [4]:

  • spontaneous entrepreneurship,

  • evolutional entrepreneurship,

  • ethic entrepreneurship,

  • system entrepreneurship,

  1. criterion of place of entrepreneurial activity – activity sector [8]:

  1. individual,

  2. internal (in economic organisations),

– individual entrepreneurship,
– organised (team) entrepreneurship,

  1. administrative (in public sector),

  2. social (in non-profit sector),

  1. fluctuation criterion – changes of entrepreneurship intensity in time [8]:

in both cases we can define:

  1. crafts entrepreneurship (small scale),

  2. developing entrepreneurship,

  1. institutionalisation degree criterion [3]:

  1. according to the systematics introduced by S. Kwiatkowski [9]:

  1. criterion of role played by individuals or the state in creating entrepreneurship (macro-social models) [10]:

  • individual entrepreneurship,

  • organised entrepreneurship,

  • national entrepreneurship,

  • holistic entrepreneurship,

  1. criterion of entrepreneurial activity in macro aspect, by M. Binks and P. Vale [2]:

  1. criterion of innovativeness, by H. Leibenstein [8]:

  1. criterion of protestant labour ethics or its negation [5]:

Many of the above listed entrepreneurship types can also define non-agricultural economic activity in Mazovian Voivodship and in Poland. Complicated conditions of Polish economy during transition result, however, in many untypical types of entrepreneurship which have not been studied and defined before.


Polish entrepreneurs running their businesses during transition experience very difficult and still worsening economic conditions. They have to deal with complicated and unclear, full of loopholes laws and regulations on economic activity. Furthermore a considerable part of population is not prepared to act effectively in new free market system. All these reasons resulted in a number of interesting non-agricultural entrepreneurship phenomena observed in surveyed communes in 1996-2003 and were connected with untypical causes to register a company.

A typical reason for registering a business is the intention to run a continuous economic activity, in response to existing demand for goods and services or introducing quite new goods and services into the market, thus filling in the market niche; it should be aimed at gaining regular income in the longest possible time. All other reasons for registering businesses, indicated by local authorities in interviews, allow to define eight new types of entrepreneurship.

Fictitious economic activity: was observed on a big scale in 2000-2002 in Borkowice commune, where businesses were registered and existed for four days only.

The only aim was to obtain a document certifying that the person runs a business, so is employed. Such certificate was required by an agent helping ‘entrepreneurs’ to find a job abroad. The ‘entrepreneurs’ liquidated their businesses immediately after four days after registration date, to prevent their documents from being sent to other offices.

Table 1. Changes in entrepreneurship statistics caused by number of factious entries in Borkowice commune in 2000-2002



Total = 100%

of which:


























A: number of businesses
Source: own elaboration.

Reasons for such behaviour can be found in not too distant past when double employment was widespread in that poviat. Redundancies in industry afflicted, in the first place, double employed farmers. Thus establishing a business was the only way to prove that people looking for another job abroad were employed in Poland and would not try and permanently settle in a foreign country offering the job. All fees for setting up business were treated as a kind of investment, however limited to one register at the Commune Office only. The fictitious businesses were registered in all PCA sectors and their mutual feature was liquidation not later than four days after setting up. Entries of this kind made the entrepreneurship statistics much higher in those communes. Although agents finding a job abroad operated also in other communes, they did not cause such reaction.

Constrained economic activity: was registered by people previously employed and then laid off by employers, who at the same time offered them the same post or responsibilities provided that they would establish their own business. In such situation we observe a kind of economic constraint or even blackmail – keeping the source of income depended on accepting ex-employer’s conditions. Thanks to such solution, the ex-employer got rid of all responsibilities for the new ‘entrepreneur-employee’ resulting from the Labour Code as well as other laws and regulations. In many cases such change was also connected with actual reduction of salary paid to the ‘entrepreneur-employee’, who began to cooperate with his previous employer getting only the net salary, but having to pay all taxes and insurance. In other cases, the ‘entrepreneur-employee’ was paid the whole former gross salary and could even use free all accountancy services provided by previous employer. In both cases, however, ex-employer’s company was not financially responsible for e.g. sick leaves, trainings or holidays of ex-employee and could stop the cooperation at any time.

Constrained economic activity was often found in communes of sub-urban character and in communes where inhabitants could still commute to work in bigger cities, mostly in Warsaw and Garwolin in surveyed group. This phenomenon is very often incorrectly called ‘outsourcing’.

Sub-contractual economic activity: was registered by people subcontracting works for other companies, quite often for another private entrepreneur. It differed from the constrained economic activity, because both sides had not been involved in any work contract before, so they were free to undertake or not the cooperation. Establishing such businesses was a response to a specific work offer, where the offerer burdened the subcontracting entrepreneur with all tax and insurance payments.

Sub-contractual economic activity is still a common phenomenon, especially in service sector, and can be found in all types of communes, independently from their location.

Economic activity registered alternatively among the family members: when one person liquidated the business and another family member (mostly spouses) immediately set up the same economic activity, at the same address. Examples of such re-establishing within a family could be found in many commune registers. Such actions were not illegal. They were caused by higher financial profits than those gained by co-ownership of the business. However the main condition to make re-registering profitable was to be insured in ZUS (general insurance), which entitled entrepreneurs to receive a dole after ‘liquidating’ their business.

Another reason for re-registering businesses was the duty to use fiscal tilts when certain turnover limit was reached by shops. Closing the business by one person and re-establishing it by another family member enabled them to avoid introducing fiscal tilts even if they reached the turnover limit. Such situation lasted till the moment when new regulations introduced fiscal tilts to all shops, regardless their turnover. Then that phenomenon vanished.

Seasonal economic activity: was usually registered in spring and liquidated in autumn by people performing different kinds of construction services or sub-contracting forestry services. If such entrepreneurs were insured in ZUS then liquidation of the company in autumn enabled them to receive both dole and insurance during all the winter time when it was not possible to perform their services. The main feature of seasonal economic activity is that demand for this kind of services vanishes during winter because of geographic and climate conditions and these factors are not influenced by the market mechanisms.

Seasonal economic activity was not liquidated by entrepreneurs who were insured in KRUS (farmers’ insurance) because the fact that they owned a farm obliged them to pay this kind of insurance regardless their economic activity. In such cases, only Revenue Office was informed about finishing economic activity in autumn and beginning it the following spring. It allowed avoiding all fees charged by other registration offices and omitting time-consuming procedures. Such partly liquidation was not allowed by regulations.

Cyclic economic activity: was registered at the same time of each year, usually by the same entrepreneurs and in response to a short-time demand for goods sold at traditional holiday time, e.g. Christmas. While seasonal economic activity depended on climate conditions, cyclic economic activity was performed over a very short time, in different seasons and in many cases it could also be a sub-contractual economic activity. Mostly it was liquidated after finishing the production because of a long break and uncertainty about possible continuation in the future.

Occasional economic activity: an economic activity that does not make the main source of income for the entrepreneur. It is performed occasionally, when there is demand for offered services, which at the same time cannot be provided in so called ‘grey zone economy’. Running such business was profitable only when the entrepreneur was insured in KRUS and paid taxes calculated according to general rules. However, the frequent phenomena of neighbour services exchange in rural areas (non-financial, legally indifferent, informal entrepreneurship) and services provided in ‘grey economy zone’ (informal, illegal, financial, public entrepreneurship) made the registration of occasional economic activity quite rare in surveyed communes. Defining this kind of entrepreneurship was possible thanks to information obtained in interviews with local authorities.

The last defined phenomenon is not connected directly with untypical reasons for establishing business. It results from untypical reasons for living the entry in commune register and was named ‘sleeping economic activity’.

Sleeping economic activity: a big number of rural companies, which have not run any economic activity for quite a long time, found in commune registers. This phenomenon is not connected with any of the above described kinds of occasional, seasonal or cyclic economic activities. The main characteristic of sleeping economic activity is the fact that it has been liquidated in ZUS or Revenue Office, but it still exists in commune registers. Thus, according to the law, these companies still exist. Such situation results both from the lack of administrative discipline of entrepreneurs and from deliberate actions aimed at reduction of registration fees in case of re-establishing the business. It has been observed for many years and is caused by the lack of co-operation between offices and ministries responsible for registration.


Most of presented entrepreneurship types were established and run according to the law. They were caused by difficult social and economic conditions in Poland during transition.

Summing up, we may conclude that fictional, constrained and re-registered economic activities considerably increased entrepreneurship statistics, but they did not cause any real increase in the number of new businesses. Thus, they did not enlarge labour market and did not cause any differentiation in income sources of rural population. Such companies did not fill in the gap in labour market and did not reduce unemployment caused by privatisation of state enterprises, either.

Cyclic, seasonal and sub-contractual economic activities only respond to some certain labour demand and cannot be considered as entrepreneurship in its classical meaning; however, they enable rural population to increase their income level for a short time, at least. Economic effects are not so strong as one could assume analysing the number of registered businesses and not knowing about untypical character of rural entrepreneurship during transition.

Discovering these phenomena and their influence on entrepreneurship statistics leads to the conclusion that typical, real entrepreneurship in rural areas appears on a much smaller scale than it is shown by reports from statistical offices, based on REGON data. Rural entrepreneurship is performed by micro-enterprises very vulnerable to all unfavourable changes in the law or in the direct market surrounding as well as to the smallest increase in tax and insurance burdens. Such changes immediately result in increase of untypical forms of entrepreneurship, aimed at finding solutions to a difficult situation by using loopholes as there is no possibility to make rural businesses more profitable.


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  10. Solarz J. K., Modele przedsiębiorczosci: doswiadczenia USA i Japonii [Entrepreneurship models: experiences of the USA and Japan], Instytut Gospodarki Narodowej, Warszawa 1990 [in Polish].

Joanna Zaj±c
Department of Agrarian Policy and Marketing,
Warsaw Agricultural University, Poland
Nowoursynowska 166, 02-787 Warsaw, Poland
email: as5z@poczta.fm

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