ICT solutions for the informal sector in developing economies: What can one expect?

Abstract

In the dominant policy discourses, the informal sector is often treated as composed of millions of entrepreneurs who are stuck at small scales of business with low levels of productivity and incomes because of market imperfections, institutional rigidities, or regulatory bias. Technological inclusion is often considered a solution to the problem of institutional exclusion that the informal business owners face. Such policies are often based on the assumption that informal business owners behave like entrepreneurs. However, there is also an alternative view that informal business owners are forced to run businesses on their own account because they cannot find decent jobs in the formal or organized modern sector. Their skills and attitudes towards risk are very different from what we associate with entrepreneurs. Technology solutions in general—and information and communication technology (ICT) solutions in particular—are more likely to be effective in their developmental objectives, if a more nuanced and disaggregated view of the informal economy is adopted. © 2019 John Wiley & Sons Ltd