Exploring technological adaptation in the informal economy: A case study of innovations in small and medium enterprises (SMEs) in Zimbabwe

Abstract

Little attention has been given to the processes and factors that facilitate technological adaptation by informal innovators operating in small and medium enterprises in Zimbabwe. This article sought to establish how and why technological adaptation occurs in the informal economy. We conducted observations and 20 in-depth interviews with purposively sampled informal innovators who operate at Mbare Siya So in Harare, Zimbabwe. Thematic analysis was used to analyze the primary data. The findings indicate that the production and marketing techniques of informal innovators are inspired by the need to reduce the cost of agricultural technologies, such as dehullers, and thus meet the purchasing capabilities of small-scale farmers. These informal innovators rely on secrecy and complex innovations as knowledge-management strategies to protect their intellectual property and in the process are able to ward off competition on the local market. Through constant learning and experience these informal innovators have managed to correct the unsuitability of imported Chinese products by manufacturing appropriate agricultural technology that small-scale rural farmers prefer. This study recommends that the informal innovators should register patents to protect their innovations formally.

Keywords:

• adaptation
• informal economy
• informal innovators
• innovation
• small and medium enterprises

Disclosure statement

No potential conflict of interest was reported by the authors.

Notes

1 The Intergovernmental Panel on Climate Change (2000), in its special report on Methodological and Technological Issues in Technology Transfer, defines technology as ‘a piece of equipment, technique, practical knowledge or skills for performing a particular activity.’

2 The informal economy consists of very small units producing and distributing goods and services, and comprises largely independent, self-employed producers producing and distributing goods and services (Mhone 1996).

3 The growth which was experienced in the informal sector starting in the 1990s led researchers to substitute the term informal sector with small and medium enterprises (Daniels 1993; McPherson 1991, 1998; Mushipe 2007). This paper classified all unregistered SMEs that do not remit tax as part of the informal economy.

4 Innovation refers to the implementation of a new or significantly improved product, both goods and services or processes, a new marketing method or a new organisational method in business practices, work organisation, or business practices, or extended relations, external relations, scientific, technological, organisational, financial and commercial steps which are intended to lead to the implementation of innovations (OECD 2005).

5 Informal economy refers to very small units producing and distributing goods and services. They consist largely of independent, self-employed producers in urban areas. Some employ family labour and/or a few hired workers or apprentices. They operate with very little capital or none at all. In some instances they are licensed but not registered as companies. They utilize a low level of technology and skills, have low productivity, and generally provide very low, irregular incomes.

6 The Look East policy refers to a country’s relationship with countries such as Malaysia, China, Korea, Japan, India, etc.

7 Adaptation is a process by which countries, local communities and individuals find and implement ways of adjusting technologies so as to suit the consequences of climate change and other socioeconomic contextual factors.