Informal Economies
This is a page on informal economies.
Seed content[edit]
Kenya[edit]
Participants at the forum took part in a Collective Intelligence exercise where they collaboratively identified youth unemployment as the most pressing development challenge in Kenya, and hence the challenge that the Accelerator Lab should focus on. The participants also worked in groups to identify and map solutions to address the challenge of youth unemployment, with responses drawing on a strong theme of entrepreneurship: solutions included mentorship and skills training for creative and informal economies, education around Intellectual Property law, expanded polytechnic education and support of youth-led start-ups.
Source: AccLab Blog
On 2 May 2020, the UNDP Accelerator Lab in Kenya partnered with Konza Technopolis Development Authority to hold a webinar discussion on ‘Leveraging Tech to spur Decent work and Economic Growth during and post COVID-19’, drawing panelists from the public and private sectors, representing a wide cross-section of society. There was a vibrant discussion on how to ensure digital inclusion for all sectors, and in particular the informal economy, which presents untapped opportunities for employment and which will play a big role in the country’s recovery post COVID-19. It was noted that digital ‘gig economy’ apps are already giving Kenyans opportunities for autonomy and self-employment as well as aggregation of demand for services and products, and this trend is only set to continue.
Source: AccLab Blog
Philippines[edit]
Sharing Economy. Yi Wu and Lin Liu, both UNDP Philippines interns, compared the ecosystem in Quiapo as having elements of an informal sharing economy. Lin finds the piso-gadget as a creative way to make money while allowing other people to play the expensive gadget. This ecosystem, however, has a dark side to it as Yi observes: “This ecosystem seems to make people be stuck by making them get used to it.” She added that “They should be exposed to the external community and be connected with other parts of Manila to learn new skill sets and help them grow in the process.”Ready for moreALabPH Intern Marky Torres finds the SalikLakbay to be too short and was hoping to have immersed himself longer to see more different aspects of grassroots innovation: “For two hours, we only saw snippets of how these innovations were being used. I’d love to be able to immerse myself fully in the experience to understand deeply the context and culture behind each innovation.”
Source: AccLab Blog
Serbia[edit]
Irena: I cannot say that we have not been affected by this switch to working remotely – creative work is difficult enough in itself, and lack of real teamwork and non-verbal communication comes at a price. I miss the time dedicated to thinking together. On the other hand, all the changes that have occurred along with the pandemic can be regarded as a unique social experiment, and as such, they provide a fantastic working ground for the entire network of Accelerator Labs. This situation is also important for our work on depopulation, as it has the potential to change the rules of the game: on the one hand, it can have drastic negative effects on those segments of the population that are already at risk, whose potential society currently uses insufficiently (for instance, those whose income is solely from the informal economy); on the other, it can lead us to entirely new ides when it comes to the way we work, places we live in and the way we maintain contact with people.As Draško has put it, we cannot predict the future, but as far as this quartet is concerned, it is certain that they will pursue to look for the right formula to solve the development challenges caused by the shrinking population in Serbia.
Source: AccLab Blog
South Africa[edit]
This hypothesis was: If we provide vouchers to community members, they will redeem these at local vendors and traders (thus providing support to the informal economy). This did not play out in reality with the vast majority of vouchers being redeemed at formal retailers. This failed experiment surfaced lessons which you can read about in our next blog (coming soon!).In delivering development, real success goes beyond the numbers. One of the youth participants expressed this by saying through this project “The spirit of trust and Ubuntu was awoken” in their community.
Source: AccLab Blog
The project experimented with an alternative method of food distribution by supplying money through a cloud-based transactional platform in the form of vouchers. These vouchers could be redeemed at the major retailers near the communities, and the project additionally registered local spaza shops and informal traders as vendors for voucher redemption in an effort to support the local and informal economy. This mechanism was introduced to avoid the challenges associated with traditional food parcel delivery such as packaging and storage, delivery costs, as well as novel challenges such as the lockdown limitations. Additionally, without a needs-based assessment, we wanted to provide community members the ability to choose for themselves rather than being passive recipients. Although limited, this mechanism did create some sense of autonomy.
Source: AccLab Blog
Uzbekistan[edit]
In Uzbekistan, small and medium enterprises (SMEs) were among the hardest hit. 80% of all individual enterprises were not able to continue their operations. Service and retail sales sectors suffered severely from the disruption to their business operations. The first signals of impact on ordinary people are already worrisome. The number of unemployed increased from 1.35 to 2 million in just three months. Vacancy announcements on one of the top advertisement platforms dropped by 75% overall, and by as much as 90% in the tourism, restaurants and education sectors compared with the same period of the previous year. Considering that the size of the informal economy in Uzbekistan is between 40-50% of GDP, the scale of the economic impact is estimated to be even more serious.
Source: AccLab Blog
Zimbabwe[edit]
Zimbabwe has the world’s second largest informal economy with over 60% of the population relying on informal activities for their source of income. The Zimbabwe Country Office believes the informal economy is a strategic bet as it has the potential to drive the country’s economic recovery. Informality is often misunderstood and criminalized, with big questions remaining unanswered - What pushes people to go informal? What does informality and formality mean to various businesses? How can informal businesses tap into formal structures and grow to create more jobs? Can the informal economy and government policies coexist?
Source: AccLab Blog
This excerpt is also potentially relevant to: Hybrid Models, Informal Activities, Informal Businesses, Formalization, Perceptions and Motivations
The speed, dynamics and complexity of today’s challenges are fundamentally different from previous eras in history. The aim of launching the lab in Zimbabwe is to tackle frontier challenges in development that the world is facing the 21st century such as climate change, migration, artificial intelligence and the informal economy. The Accelerator Lab is embedded within UNDP Zimbabwe’s operations, and will bring in new expertise in exploration, solutions-mapping and experimentation to UNDP’s front-line work. At UNDP, we are disrupting the way we think, invest, deliver and manage to perform faster, better and at scale.
Source: AccLab Blog