The nature of innovation: a study of the informal construction sector in Sweetwaters, KwaZulu-Natal

n South Africa, the informal construction sector plays an important role in providing employment opportunities for skilled and unskilled workers, and affordable housing for lowincome household in marginalised areas. However, the informal construction sector faces numerous challenges, including limited access to resources, training, and formalisation. Despite these challenges, the informal construction sector has demonstrated remarkable resilience and innovation. Informal construction business owners have developed innovative approaches to address challenges related to funding and construction materials. Drawing on a local innovation and production system (LIPS) framework, this study investigates the nature of and barriers to innovation as well as the networks important for innovation in informal construction businesses in Sweetwaters, KwaZulu-Natal, South Africa. A mixed-methods approach was utilised, incorporating qualitative interviews and a quantitative survey. The study found that the informal construction sector in Sweetwaters faces challenges such as a skills gap, constraints related to the low income market such as low profit margins, and limited access to finance. Principal component analysis revealed that innovation in informal construction businesses is characterised by knowledge, linkages & training, Formal learning & development, and technical infrastructure. Lack of access to formal financing and training were the main barriers to innovation. The strongest interaction patterns occured between informal construction businesses and customers. To improve the informal construction sector, policymakers should focus on skills development, strengthening partnerships, and facilitating access to finance.