Entrepreneurship by necessity in Palestine: Creating hope from the heart of distress

Against the backdrop of a complex economic and social reality, the Israeli occupation imposes restrictions on Palestinian movement, resources, and development. This is compounded by labor market imbalances, a lack of social protection, and a dearth of formal employment opportunities, particularly among youth and women. In the face of these challenges, establishing an economic enterprise is no longer a voluntary option to achieve wealth or ambition, but rather a means of survival and resilience. This phenomenon is more prevalent in areas suffering from historical marginalization, such as camps and remote villages, where formal support networks are lacking and residents rely on self-initiatives to meet their daily needs.

Entrepreneurship by necessity in Palestine is a practice of resistance, born of need and carrying within it meanings of economic dignity, social empowerment, and local dynamism. It is the story of the Palestinian people confronting marginalization with determination and deprivation with creativity.

Researchers distinguish between two types of entrepreneurship: entrepreneurship of opportunity, where individuals seek to exploit a gap in the market or achieve financial independence with strategic awareness, and entrepreneurship of necessity, where individuals are forced to launch their projects due to the lack of other options (unemployment, poverty, displacement, etc.).

In the Palestinian case, the leadership of necessity cannot be separated from the political context, as it becomes a tool for civil resistance and the provision of services that the state is unable to provide.

Palestinians, particularly in the West Bank and Gaza Strip, live under unfamiliar conditions. Blockades, checkpoints, scarce resources, and restrictions on movement limit regular employment opportunities. Given this reality, many young people, and women in particular, are turning to small home-based or community-based projects as a source of income. These projects do not arise from the luxury of initiative, but rather from compulsion: the compulsion of need, unemployment, and economic insecurity. Motives vary, and the solution is forced entrepreneurship.

Structural constraints, occupation, military checkpoints, Israeli control of border crossings, and land confiscation weaken economic activity and limit businesses' access to markets. This creates a pattern of isolated local entrepreneurship, relying on self-resources or narrow social networks.

Chronic Unemployment and Disguised Unemployment: According to the latest official statistics, unemployment rates in Palestine witnessed a significant increase in 2024, reaching a total rate of 51%, divided between 35% in the West Bank and 80% in the Gaza Strip. It should be noted that these figures reflect the general situation, while other data indicate that the unemployment rate among university graduates in Palestine reached 48%, with disparities between the West Bank and Gaza Strip. Unemployment rates vary by academic discipline, with specializations such as journalism and media, social sciences, physical sciences, and educational sciences recording high unemployment rates ranging from 50% to 78%. This indicates that the Palestinian labor market is not sufficiently absorbing graduates in these fields, forcing them to seek alternative employment opportunities or engage in small businesses or self-employment. Despite the existence of decentralized government programs, weak funding, coordination, and weak networking with the private sector have rendered many official initiatives insufficient, prompting individuals to develop their own solutions.

Gender and societal roles: Palestinian women play a pivotal role in essential entrepreneurship, particularly in rural areas and refugee camps, where many establish micro-enterprises in sewing, homemade food, and medicinal herbs, reshaping the relationship between the informal economy and women's empowerment.

Forced Innovation Amid Scarce Resources: In light of the difficult economic conditions and scarce resources in Palestine, many entrepreneurs are forced to adopt a forced innovation approach as a means of survival and progress. This type of innovation does not arise from a voluntary desire, but rather from an imperative to overcome surrounding challenges. These entrepreneurs are rethinking the use of limited resources in innovative ways, such as recycling, employing simple technologies, or developing products and services that meet local market needs using unconventional methods.

This reality has led to the emergence of unique business models based on flexibility and creativity, contributing to strengthening economic and social resilience despite the challenges.

Relying on social networks, the community becomes the primary incubator. Neighbors, family, the mosque, the local association... form a primary safety net that provides symbolic capital, social credit, and even early customers.

Relying on alternative digital tools. Given the weak infrastructure, tools such as WhatsApp and Facebook Marketplace are alternatives to physical stores and a means of reaching Palestinian markets within the country or in the diaspora. Leveraging technology, digital platforms have become central business tools, enabling access to customers in the absence of traditional marketing infrastructure and breaking down the geographical barriers imposed by the occupation.

Community connection and multiplier effect: Often, necessary projects arise to meet an immediate need: homeschooling for children, traditional bread that is unavailable, repairing appliances in areas with limited service coverage... What gives these projects community acceptance and support stimulates employment for others, rebuilding the fabric of trust in neighborhoods.

Solidarity rather than competition. In an environment plagued by scarce resources and limited opportunities, solidarity and cooperation among entrepreneurs become more of a necessity than an option. Many small business owners in Palestine rely on forming community support and collaboration networks, sharing knowledge, experiences, and resources to address common challenges. This collaborative approach enhances the chances of collective success and creates a more sustainable business environment, far removed from the competitiveness that can undermine individual efforts. Solidarity is clearly demonstrated in collaborative initiatives, such as cooperatives and joint ventures, which support each other, contribute to local economic development, and strengthen social bonds.

Survival before expansion: Unlike opportunity entrepreneurship, which plans for rapid growth, the entrepreneur necessarily focuses on stability and economic survival before thinking about expansion or significant profitability.

With the global technological acceleration, artificial intelligence (AI) has emerged as a highly influential tool in empowering Palestinian entrepreneurs who were forced to launch their projects out of necessity. Despite challenges associated with digital infrastructure, these entrepreneurs can now benefit from free AI tools such as logo design, copywriting, and market data analysis to compensate for the lack of expertise and resources. These tools allow them to improve the quality of their products and services and expand the scope of online marketing at low costs, enhancing their chances of success in a complex economic environment. Free AI tools, such as design generators and marketing content writing, have become a new enabler for entrepreneurs with limited resources, opening up unconventional growth prospects.

Examples from the Palestinian reality:

 From Taboon to Brand – The story of Lina in Rojeeb, who started her home-based bread and pastry business, then developed it into her own bakery after saving some money. Her project has become well-known in her city, highlighting the ability of Palestinian women to transform small businesses into successful ventures.

 Innovation under siege - Gaza Lighting Network (Hassan Saad), recycled damaged batteries to power electrical appliances during chronic power outages, and began marketing his product as an alternative energy source for families (Hassan Saad, a resident of the Shuja'iyya neighborhood, created the "National Unity Charitable Lighting Network" using damaged batteries to provide lighting for more than 50 homes and two streets in the neighborhood.

 From crisis to export - Women marketing their products locally and internationally. They began marketing their products outside the framework of their villages, cities, governorates, the local market, and outside the framework of the homeland.

Fifth: Structural challenges facing necessary leadership.

Necessity-driven entrepreneurship in Palestine faces a set of deep structural challenges that hinder its growth and sustainability. In addition to the economic and social difficulties entrepreneurs face, there are structural barriers that make it difficult for these small businesses to achieve success and expand.

- Poor access to finance and credit.

- Lack of administrative and digital skills.

Legal and bureaucratic obstacles, legal complexities, and unclear project registration procedures all negatively impact entrepreneurs' ability to manage their projects efficiently.

Many projects are exposed to unfair competition from Israeli or imported goods, which often receive greater support and funding, making it more difficult to compete.

Political and economic insecurity and ongoing tensions, including incursions and confiscations, make the continuation of these projects more fragile.

These structural challenges require systematic intervention and comprehensive support strategies to ensure the necessary entrepreneurship capacity to grow and contribute effectively to the Palestinian economy.

Necessity-driven entrepreneurship has a tangible positive impact on Palestinian communities, transcending its economic role to become a catalyst for social change and local empowerment.

• Economic empowerment of families: Women’s and home-based projects have played a prominent role in reducing families’ dependence on foreign aid, by providing stable sources of income that contribute to improving the standard of living and enhancing economic independence.

• Strengthening local solidarity: Cooperative and participatory initiatives have contributed to building strong bonds among community members, fostering a culture of cooperation and solidarity in the face of common challenges, especially in light of difficult economic and political conditions.

• Creating a flexible shadow economy: These projects created a type of alternative economy that was flexible enough to overcome the repeated interruptions and losses resulting from the occupation, which helped sustain economic activity and achieve a degree of stability in local communities.

• Transferring skills between generations: Home-based businesses have become centers of informal education, through which skills, crafts, and practical techniques are passed on between generations, ensuring the continuity of local knowledge and stimulating innovation within the community.

To address the challenges facing entrepreneurs who are driven by the need to survive and adapt, supportive policies and strategies must be adopted to enable this group to strengthen their projects and achieve a sustainable impact on the economy and society. The following are a set of policy proposals that can contribute to supporting necessity entrepreneurship:

1. Establish local microfinance funds without interest: Establish soft finance funds that provide small, interest-free loans, helping entrepreneurs start and expand their projects without significant financial burdens, with a focus on empowering marginalized groups.

2. Establishing digital platforms to market small businesses in the local and international markets: Developing electronic platforms that facilitate business owners' display of their products and services and open up new markets for them, both within Palestine and abroad, thus enhancing growth opportunities and increasing revenues.

3. Providing coworking spaces for marginalized groups (women, youth): Establishing cooperative work centers equipped with all technical and administrative requirements, providing a stimulating work environment and exchange of experiences between entrepreneurs from groups facing additional challenges.

4. Integrating entrepreneurship into school and university curricula as an alternative economic path: Develop educational programs that focus on entrepreneurship and innovation skills, to encourage young people to consider small businesses as a sustainable and effective career option.

5. Amending laws to facilitate micro-business licensing: Reviewing and simplifying the legal and administrative procedures related to establishing and licensing micro-enterprises, to reduce bureaucracy and facilitate entrepreneurs’ legal and orderly entry into the market.

6. Integrating artificial intelligence into Palestinian entrepreneurship projects, albeit gradually, represents an opportunity to overcome some structural constraints and add a competitive technical dimension to projects that were born on the margins but hold great potential.

7. Building free digital learning platforms for entrepreneurial skills, especially in project management and e-marketing.

Implementing these policies can positively transform the necessary entrepreneurial environment and enhance its ability to effectively contribute to economic and social development in Palestine.

At the heart of this scene remains the most important story: how Palestinians transform distress into hope, despair into productivity, and necessity into opportunity to shape a better tomorrow.

Transforming necessity into creativity, entrepreneurship by necessity in Palestine is not a story of quick profits, but rather of living a dignified existence, challenging harsh realities, and insisting on dignified survival. It is one manifestation of the "resistance economy," where oppression is transformed into capability, powerlessness into initiative, and scarcity into opportunity. Necessity becomes a driver of dignity. Entrepreneurship by necessity in Palestine is not an individual success story, but rather a testament to the ability of an entire society to adapt, endure, and create alternatives under pressure. It is both a political and economic act, redefining work, production, and dignity in an occupied and crisis-ridden context.

Entrepreneurship by force and necessity in Palestine is not a story of quick profits, but rather a story of living a dignified life... and supporting this type of entrepreneurship is a national necessity for building a resilient and humane economy.