Boosting innovation in small informal businesses through collaboration

Small businesses in the informal economy drive employment, but they struggle to thrive. They are particularly vulnerable to shocks due to major events such as the Covid pandemic. A recent study by researchers at the Human Sciences Research Council shows that innovation can help these businesses survive and grow. For informal businesses, working with other businesses and innovation support organisations, such as finance providers and training organisations, can grow more opportunities. In informal local settings such as township economies, these linkages are often weak or missing, and connections are difficult to establish. This policy brief considers how to increase informal business interaction within local networks, which is crucial for innovation that contributes towards the sustainability and growth of informal businesses, and potentially their transition to stable, formal micro-enterprises.