Situated Effectuation, Popular Economy and Territorial Identity in Rocinha: Between Necessity, Opportunity and Solidarity

Abstract

This article examines entrepreneurship in Rocinha, the largest favela in Rio de Janeiro’s South Zone, where high population density, a strategic location, and trust-based networks sustain a hybrid economy with distinctive developmental dynamics. The discussion is structured around three theoretical axes: the motivational continuum that links necessity- and opportunity-driven ventures; the alternation between causation and effectuation logics, here read as ‘situated effectuation’; and the popular–solidarity economic infrastructure that underpins entrepreneurial decision-making. The analysis draws on census statistics, Global Entrepreneurship Monitor micro-data, case studies, and government reports produced between 2010 and 2024. Findings indicate that ventures launched as survival strategies may integrate exploratory elements when investment-worthy niches emerge, even while remaining subject to defensive pressures. Formal planning and improvisation tend to coexist, adapting to prevailing levels of risk and information, especially in popular territories such as favelas, whereas community credit networks and territorial reciprocity cushion external shocks and help maintain low default rates. The article concludes that productive-inclusion policies must recognize this institutional plurality and value reputation and social capital as core assets for local development.