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As North Korean athletes participate in the Olympics in Pyeongchang, South Korea, you might be curious about how ordinary North Koreans live under the grip of Kim Jong Un. Is everyone starving and marching in lockstep?

While poverty does exist and North Koreans don’t live freely inside the communist nation, more ordinary citizens are quietly becoming entrepreneurs. As business is incrementally tolerated yet monitored by the regime — everyone from millennials to wealthier professionals are bootstrapping ventures inside the world’s most totalitarian state. “It’s constrained and camouflaged, but it’s capitalism nonetheless,” says Sokeel Park, director of research and strategy at Liberty in North Korea, an international NGO that supports North Korean defectors.

Strains of capitalism emerged in this communist society back in the 1990s as markets popped up across the country to cope with the famine. Here North Koreans became entrepreneurs out of necessity to trade for food and other necessities. Over the years the practice expanded and the regime, unable to feed its own people, was forced to tolerate the marketisation. According to Daily NK, an online newspaper focused on North Korean issues, more than 5 million North Koreans, or 20 percent of the population, are now directly or indirectly involved in the general markets.

This growing tolerance for free enterprise has contributed to expanding physical, outdoor market spaces that permeate cities and the countryside. Comprised of stalls and roughly akin to an outdoor flea market, entrepreneurs conduct cash transactions in Korean won, Chinese yuan and even the US dollar. Ventures range in size and type — offering everything from consumer goods, like food and clothing, to services including haircuts and transportation, according to a report on North Korea’s marketisation and details from North Korean defectors. The net effect is a budding, entrepreneurial ecosystem that is evolving beyond mom-and-pop stalls run by housewives. The outdoor markets in turn are part of a larger, emerging business framework that includes a start-up bootcamp and government-supported tech zones. State officials are in on side hustles, too, helping to create a hybrid, private-state model of marketisation.

Not even the economic sanctions imposed by the US^[1] and international community is ebbing this movement.

Just to clarify, North Korea is not the next Silicon Valley. Challenges for entrepreneurs are formidable. Obstacles include lack of modern infrastructure and transportation, no widespread internet access and absence of robust bank-lending activity. Micro entrepreneurs aren’t selling their goods online. And there’s nothing equivalent to a venture capital framework. International sanctions also make large-scale business and trade activity across borders difficult.

Despite these challenges, scrappy entrepreneurs are self-financing their own small businesses. They’re getting access to often Chinese-made goods that arrive through the porous North Korea–China border.

Lack of internet access and a modern digital landscape can in fact spark ingenuity. For example, if you acquire Chinese-made apparel through a middleman, you might resort to an analogue, guerrilla marketing tactic. Get your most attractive — and tallest — female friends to model outfits and strut up and down an outdoor North Korean market, as one defector details in a new film on North Korea’s millennial entrepreneurs called “Jangmadang Generation” (or market generation).

Roughly 20 percent of North Korea’s population of 25 million rely on the outdoor markets alone, according to a report published last year by Daily NK.

Beyond the market spaces, some North Koreans are participating in business training offered inside the country. Equivalent to a start-up bootcamp, the programme is run by Choson Exchange, a Singapore-based nonprofit that supports North Korean entrepreneurs. Choson Exchange mentors its North Korean partners to incubate and develop their roughly 30 start-up ventures and early-stage business ideas through workshops and additional initiatives.

Ventures range from ginseng-infused face cream to an electricity surge protector. Students are curious about advances like drones and nanotechnology. Training workshops include lectures by visiting foreigners from organizations including Facebook and The Economist. Each workshop includes roughly 80 to 120 students, and the sessions are held in Pyongyang or Pyongsong, located north of the capital. On rare occasions a handful of North Koreans have travelled to Singapore for internships and skills training, but most sessions are held in the North. The workshops focus on entrepreneurial skills and economic policy.

“There is a hunger in this country for people to start their own business,” said Ian Bennett, outreach coordinator for Choson Exchange. “North Koreans are fairly open in saying they want to open businesses,” said Bennett. “Profit is not a dirty word.”

North Koreans have dabbled in free enterprise for years in a kind of gray market with prescribed rules. After the North’s state food system collapsed in the 1990s, people turned to markets to feed themselves. Based on interviews with North Korean defectors and experts over the last few years, it’s apparent the markets are irreversible and entrenched fixtures in the economy. — CNBC.com.