‘Informality’ has a multidimensional character. It is a diversified set of economic activities, enterprises Rather than the typical tour (and even ethnographic encounter), which begins in Oaxaca, Wood's tour begins far away. The informal sector makes a considerable contribution to production, consumption and income generation, particularly in developing countries. Much of what accounts for “informal” employment is familiar even to the most casual observers: street vendors and shoeshine workers in the large cities of the developing world, for example. The local authority is merely a regulatory authority (Whyte 1991). An online portal would offer help with tackling complex issues, such as intellectual property and developing new, 11 pages This study analyzes the characteristics of knowledge transfer in the social and human sciences within a large government research establishment. Other informal employment situations are a less visible feature of a… In the academic literature, the informal sector is studied through the lenses of poverty, labour, employment and migration. We're here to answer any questions you have about our services. Generally, the informal sector is labor intensive and requires low levels of skill. Of late, innovation studies have taken a keen interest in exploring various components of informal sector grassroots innovations. Likewise, Sethuraman (1997) asserted that most of the informal operators were either self-employed or family workers . In such countries like Ghana, where in 2019, only 2% of individuals entering the labour market are absorbed in the formal sector (Ghana Business News, 2019), the informal sector supports the meagre formal sector in preventing the economy from collapsing. Excluded from formal governance structures, they rely on informal arrangements by which rules-in-use shape choices, behaviours and decisions. More than 80 percent of the informal sector participants are making a comfortable livelihood through their activities. Industrialization is a progressive measure that creates social and economic change by transforming human society from pre-industrialization to industrial era; Industrialization plays a predominant role in the development of the economy, acts as a basic fundamental factor that is influenced by the growth prospects of the economy of a country. The largest part of the sector is generally trade followed by services. The businesses need assistance in form of capital and exploring new markets. York, pp. In Africa the informal sector is mostly composed of street vendors, retailers and in rare cases wholesalers who trade in products such as food, clothes and electronic appliances. We deploy an innovative analytical framework and make an explicit link between the range of transfer processes it identifies and the organizational and analytical challenges that such variety poses. The chapter is structured as follows: first it defines the informal sector according to various experts and organisations, secondly it focuses of explaining the most common perspectives on the sector, thirdly it provides the general characteristics, fourthly the empirical evidence on the role of the sector and, fifthly government policies to support the sector followed by a summary. Oaxaca is a well-traveled place. We also take the case of three grassroots innovations and describe their process of commercialisation with the help of external actors. But this entails hyper-competition, conservative changes, a culture of secrecy and quickly dissipating monopoly rents. In addition, the demand for goods and services in rural areas decreased, because most of the residents did not have sufficient income, thereby increasing the flow. Approximately 77 percent of the labor force was involved in the informal activities in 2005 (INE 2006). Shortfalls in skills in the informal sector are largely due to low education of prospective workers, unequal access to training, underdeveloped markets, lack of attention by public training providers, and market constraints affecting small and household enterprises. Since grassroots innovations are not created keeping in mind the ‘market potential’ of these products, the diffusion of these products through entrepreneurship is widely debated in academic literature. dualistic, structuralism and legalist approaches. (SSI) Ministry of Small-Scale Industries. According to the estimations of the World Bank (2003) in the period from 1980 to 1990, the informal sector contributed on average 40 percent of the GNP and 50 percent of the employment in developing countries. The Santa Fe gallery, the national Mexican handicraft exposition, the Oaxaca City markets and shops, and the multiple—sometimes scattered regionally, nationally, and internationally—weaver-merchant households are all sites where that which is Zapotec comes to be legitimized, made authentic, or even contested. This paper attempts to deconstruct the political, philosophical and methodological reasons that have contributed to the undervaluation of informal and alternative knowledge systems. According to Tokman (1990) the informal sector is heterogeneous in terms of type of activities, i.e. As Wood shows, Zapotecs are clearly sophisticated participants in these processes. They advocate that the informal sector contributes to the growth of the formal sector by creating a market for its products and indirectly increasing tax revenue. VAT Registration No: 842417633. 15-31. Who invents medicines for the poor of the world? Research conducted by Saba, Horn & Motile (2002), using income and expenditure survey, found that 71.3 percent of the informal sector in Mozambique consisted of women-headed households, living in absolute poverty. The book provides the first in-depth work on the origins of powerloom manufacture in South Asia. The sector is also a source of sustenance for the majority of the poor, unskilled and socially marginalized population, especially women. Whyte explains that the South African national strategy also promotes and assists the development of all the categories of the informal sector. 1989). Thus the policies do not often recognize the role played by the informal sector operators (Becker 2004). Charmes therefore stated that the aggregate output of the informal sector was largely contributed by women. Disclaimer: This is an example of a student written essay.Click here for sample essays written by our professional writers. the transfer process (in terms of the type of agents involved, the content of the transfer, transfer mechanisms, receivers and the contextual factors, and barriers to transfer) are very different in the social sciences and humanities from those prevalent in the experimental sciences and engineering. His tour is one that challenges the reader to rethink what Zapotec textiles are and who weaves them. The present study is based on the puffed rice workers and their working conditions and environment. Ministry of Planning and Co-operation, UNDP-DTCD, Ouagadougou, 108p. Yet, the focus of innovation studies is exclusively on the exchange value, scalability and large-scale commercialization of innovations thereby overlooking informal sector innovations. Therefore, it conforms to the legalist school (see section 2.3.3) which defend that the informal sector is comprised of individuals who avoid the cost of formalization, specifically labor regulations and taxes. The term informal sector is used in the study to refer to any person or enterprise participating in economics activities without a license from the legal authority, including those who are not licensed, but are paying a fee to municipal authorities. The importance and contribution of the informal sector in the country’s gross national product has been realized by various scholars, despite the fact that it is often treated as unimportant and of low productivity (ILO 1998). It ranges from California to New Mexico and Mexico, across hallowed museum collections, high-end art dealers' shops, national Mexican and foreign tour groups, and Oaxacan weavers' and merchants' households. Some research has been done in relation to small-business participation in the informal sector. Geographical clustering results in quick diffusion of these designs and free imitation is the key to innovation. transfer. The output indicators such as patents and publications have also shown an increasing trend, but India still lags behind the advanced and innovative nations. The informal sector in Sub-Saharan Africa plays a crucial role. This paper reviews the literature on wage differences among industries and establishments. The informal sector employs the largest population in the employment sector in Ghana. According to Chen, Sestet & O’Connell (1999) the informal sector emerged due to low economic growth, high rates of unemployment, rural/urban migration and structural adjustments. They often use restrictive policies, by-laws and regulations that constrain the growth of informal enterprises. The first one expects the informal sector to be an important driver of economic growth that generates jobs (including entrepreneurship), while the second approach focuses on improving rights and working conditions (including social protection) of informal workers. Charmes also reported that 80 percent of the informal sector workers in sub Saharan Africa are non-wage workers involved in a form of self employment. In this paper I ask under what conditions GIs can address problems of poor but skilled artisans in developing countries and what are their limitations in doing so. Thus new laws were introduced at all levels (national, provincial and local) that provide the informal traders with rights to trade. Lessons of an Experience and Perspectives for Improvement (in French). Academic discourse on innovation in the last one decade has started to recognise the innovative potential of the informal sector. The proposed Grassroots to Global (G2G) model is aimed at reversing the dominant trend. From a labour market perspective, informal economy brings together all workers in an informal sector and workers with informal jobs present in formal and informal sectors. Further, to explore the gaps and suggest new ways of studying the subject afresh, a critical review of the existing methodologies is also undertaken. Since then the informal sector has become a common concern in academic literature, even though it still does not have a precise definition. In contrast, Prate & Quentin (2006) claim that there is no evidence that the informal sector would disappear completely, because the informal output makes a significant contribution (10 to 15 percent) to the official GDP of most developed countries. This paper sought to answer this question by collecting and analyzing patent data of medicines and vaccines for diseases using the database of the Japan Patent Office. Wages: Wages in the informal sector are generally lower and the extent of poverty is consequently higher among employees and households who rely on this sector for income (ILO 2002). No serious attempt to transform the global economy, socially and environmentally, can ignore it. The informal sector as a driver of economic growth and job creation The essay is structured as follows: Chapter two provides a theoretical framework of the informal sector including definitions, general characteristics, various perspectives and government policies towards the informal sector. The family-based apprenticeship system produces a supply of highly skilled workers but contributes to labour surplus by lowering the costs of entry and making exit difficult. The Characteristics of Informal Sector. The above mentioned factors clearly demonstrate that this sector requires legal empowerment as support for its stakeholders and enterprises (Weber, Michael & David 1992). It is important to have a clear understanding of its impact and contribution to the economic growth and the welfare of the society of low income countries. However, because of the civil war and the decline in agricultural output due to natural disasters such as drought, people migrated from rural to urban areas seeking for protection and alternative sources of income (Charmes 2000). If the informal sector economy were a To commercialise the grassroots innovations, business models are sought by the National Innovation Foundation (NIF) of India that is committed towards scouting, documenting and value addition of these innovations. These industries are providing various employment opportunities to the poor and illiterate people. In contrast to most policy and academic approaches on the issue, my claim is that there exists a vast store of knowledge in the informal sector alongside well-established (though poorly understood) institutions of knowledge transfer and skill formation. In Kenya the Government incorporated the informal sector into the national policy, assisting in getting credit as well as promotion cheaper ways of production (Becker 2004). Nor are the actors " indigenous people. " We identify the need for a theory of demand for health insurance suited to the informal sector in low- and middle income countries (LMIC) where some 3 billion people lack health cover. The different ways of defining the informal sector complicates the measurement of the sector as well as the effectiveness of policy measures. © 2008-2021 ResearchGate GmbH. Keeping in view the divergent motives, underpinnings and the nuances of informal sector grassroots innovations, this paper has undertaken a critical review of the various policy suggestions including intellectual property rights, commercialisation and standardisation on a mass scale, the role of awards and recognition for informal sector innovations, and the importance of feedback and standardisation. Info: 5361 words (21 pages) Essay Self-employment in the sector results in lower wages and longer working hours. To provide the necessary theoretical framework – explaining various views on the informal sector; reasons for involvement in the sector, challenges faced by the sector and the sector’s relative economic contribution; To present a descriptive overview of the informal sector of Mozambique, focusing on the specific features, the relative contribution and challenges to the sector; To provide a descriptive overview of the informal sector of South Africa, focusing on the same issues as in the case of Mozambique; To compare various aspects of the informal sectors of the different countries with the objective of learning some lessons which can assist policy makers to make more appropriate policies. These schools advocate that the informal sector is a distinct and separate secondary sector indirectly related to the formal sector since it provides income and security to the poor population (ILO 1972). In this model, choices for small entrepreneurs are very limited. The diverse, idiosyncratic nature of the informal grassroots innovation processes have not received adequate attention. take up activities in self-employment capacity or makes him. The policy of the government of South Africa is to create a supportive environment to support informal sector operators, including street vendors. In Mozambique it is difficult to establish the size of the informal sector, given that new businesses start up almost every day while others close down. It focuses on the causes of the informal sectors in the countries, the dimension of the sectors, contributions to the poverty alleviation and economic growth and development, challenges faced by the informal sectors and conclude with a comparison between the informal sectors of the two countries. Study for free with our range of university lectures! *You can also browse our support articles here >. Hi, you have a lot of options. The various ways of measuring the contribution of the informal sector complicate research. INFORMAL SECTOR Its role in slum improvement PRESENTED BY : 2. Consequently the policies to support efficient knowledge transfer must also be different and tailored to the specific characteristics of knowledge production and use in the social sciences and humanities. In addition to published studies, this essay draws on empirical data from the Census of Small-Scale Industry, the NSS and fieldwork among weavers and food sellers in Banaras and street vendors in Mumbai. built over centuries by peasants, artisans, women and indigenous people all across the world (Basole 2012). The growth of the informal sector and the decline in the employment rate are associated with lower economic growth (ILO 2004).
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