We see “the informal economy” as short-hand for a lot of different under-the-radar, non-recognised, untracked, unsanctioned, disregarded and often disparaged but very real and substantial commercial activities that are taking place all around the world, in both emerging and developed markets. The development of these informal commercial activities are driven by both necessity and by opportunity, but they also still have symbiotic relationships to formal economic structures, such as mature businesses, governments, financial institutions, or business analysts/evaluators.
It seems that many people mistakenly see these informal commercial activities as transient, soon-to-be absorbed into formal structures, to be stamped out, or conversely to be studied and copied by formal economic structures. But in fact these informal economic activities are growing at a much faster rate than formal ones, they are diversifying rapidly, and they generally cannot easily be assimilated or duplicated by formal structures. Certainly they are not going away – they represent a very large part of future global economic growth. The strength of these informal commercial activities lies within their flexibility, lack of defined structures, and ability to quickly respond to individuals’ needs and market conditions. On the other side, their weaknesses include a lack of scalability and the inability to set and deliver expectations for consistency.
And herein lies the tantalising dilemma of the informal economy. As companies focus on the bottom of the pyramid, they see huge untapped markets but have the wrong approach to reach them in terms of products, services, price points, and distribution. In the developed west, companies see consumers no longer necessarily depending upon established branded solutions to meet their needs due to informal alternatives, especially in the digital sphere. So how big are these opportunities really? And how do you know if your company is focusing on the right areas to learn from or in which to best engage with the informal economy?
To explore questions like these, Claro is organising the Informal Economy Symposium on October 12 in Barcelona to gather leading thinkers in areas such as the misfit economy, frugal innovation, bottom-up entrepreneurship and digital money to share a variety of perspectives. Speakers include Keith Hart, one of the world’s leading economic anthropologists; Steve Daniels, Editor-in-Chief of Makeshift magazine and website; and John Thackara, author of “The Bubble: Designing in A Complex World”.
Our goals are:
- define the informal economy in a way that is accurate, relevant, and can be acted upon;
- identify how players from formal economic structures can participate in realistic and meaningful ways in these informal opportunities;
- look at how and where innovation is occurring in the informal economy to see what we can learn and apply.
We strive to move beyond description of the state of play, we want to identify existing and emerging opportunities to strengthen these connections in order to enable new value creation for everyone. You can find out more about the symposium or register at www.theinformaleconomy.com