1. Measuring innovation in the informal sector: Preliminary Findings
- Author
-
Adeyeye, A. David, Okrigwe, Festa N., Egbetokun, Abiodun, and Sanni, Maruf
- Abstract
Understanding how to enhance enterprise-level innovativeness is important but this is not possible without reliable measurements on how firms innovate. However, innovation is generally difficult to measure, more so in the informal sector. The difficulties in measuring innovation in the informal sector are especially pronounced in developing countries such as Nigeria. Many firms in the sector are not visible to surveys, and their innovative activities are sometimes intractable to conventional measurement indicators. Yet, the informal sector remains an important economic sector in most developing countries. In Nigeria, for instance, estimates show that the approximately 65% of economic activities about 80% of private sector employment were in the informal sector in 2017. The informal sector is also characterized by ease of entry, low labour costs, operational flexibility, low capital requirements, but low skill and capabilities. Given the economic importance of the informal sector and the understanding that innovation is important for competitiveness, we set out to measure innovation in the informal sector in Nigeria. We have implemented a survey of innovation in the formal sector since 2008 under the AU-NEPAD African Science, Technology and Innovation Indicators (ASTII) Initiative but this is the first time we will attempt to measure innovation in the informal sector. Following South Africa, Nigeria is now the second African country that has started to systematically track innovation in its informal sector in Africa. The major challenge in measuring informal sector innovation is the non-availability of standardized, widely accepted instruments. The available standards and instruments, such as those of the Community Innovation Surveys (CIS) and their adaptations in Africa, are inappropriate for capturing the realities of the informal sector. To address this challenge, we adapted the Local Innovation and Production System (LIPS) framework. This framework was developed with the informal sector in mind and has been previously applied in Brazil and South Africa. This paper seeks to present our ongoing work with a focus on the adaptation of the LIPS framework to the Nigerian context. We hope that this will stimulate interest and spur the debate on how innovation can be appropriately measured in informal sector enterprises. Ultimately, this will provide insight for the design and implementation of context-relevant interventions.  
- Published
- 2022
- Full Text
- View/download PDF