Innovation in the informal sector: The case of plastic recycling firms in Mexico

Abstract

Beyond job creation, informal economic activities have received little recognition for their contribution to economic systems. However, in recent years, new research trends have suggested that enterprises in the informal sector have productivity potential that can be encouraged through technological innovation. Nevertheless, the majority of these studies come from Asian and African countries, relegating Latin America’s contributions to a marginal proportion. Through a qualitative analysis, this paper makes a pioneering contribution to the topic from a Mexican perspective, corroborating the presence of different types of innovations in the informal plastic industry and sizing its reach and social diffusion.

Keywords:

• informal sector entrepreneurship
• informal sector innovation
• Mexico
• microenterprises

Disclosure statement

No potential conflict of interest was reported by the authors.

Notes

1 It is important to mention that, mostly, there is little quality of employment, with low income and few or no benefits. In any case, it represents the income and livelihood which many people at the bottom of the pyramid can access.

2 In 2018, the presidency of the country was won by a candidate from the left. Despite this change, the policies directed to the informal sector are far from clear in this new regime.

3 Mostly, small enterprises or self-employment.

4 A growing number of academic papers have adopted this concept for their own research; it is also the concept used in this research.

5 From here on, the word ‘product’ will refer to both material goods and services.

6 The definition uses the general term ‘unit’ to refer to the agent responsible for the innovation, which refers to any institutional unit, including homes and their members.

7 This change has become widely recognized because of the disappearance of the mentioned paper manufacturer.

Additional information

Funding

This paper is part of a research project ‘Explorando los mecanismos de aprendizaje e innovación en la microempresa informal’ carried out in UAM and funded by CONACYT (Project num. 33511067).