Rethinking the informal economy

ACET Researcher and Policy Advisor Julius Gatune recently joined the World Economic Forum’s Global Strategic Foresight Community, which met for the first time last month in New York. The purpose of the meeting was to provide members with an opportunity to meet each other face-to-face, discuss their perspectives on global shifts, and develop a work-plan for the Community.

As part of his work with the Community, Gatune has written on one of several “global shifts.” These shifts are topics or issues that Community members feel should be highlighted now and added to the agendas of the Forum and relevant organizations to inspire constructive action for the future. Gatune chose to write on “Promoting Poverty Reduction by Formalizing Traditionally Informal Activities through ICT Innovation.”

You can see the full post on the World Economic Forum’s website. Here’s a taste:

“In many developing countries, more than 80% of people work in the informal economy. ICT could revolutionize the informal economy, both by enabling new business models and by formalizing traditionally informal activities. New kinds of well-funded entrepreneurs are using ICT to enter spaces which have previously been informal and small-scale, such as slum schooling. Meanwhile, mobile money and microfinance applications are increasingly enabling informal economy players to access financial services and scale up. Traditionally, governments have neglected the informal economy because its growth has been unlikely to increase public sector revenues. As ICT allows for payments to be traced and thus brought into the formal economy, governments can take the opportunity to raise public funds to invest in infrastructure and other types of public goods and services, promoting poverty reduction.”

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