/*********************************************** * Ultimate Fade In Slideshow v2.0- (c) Dynamic Drive DHTML code library (www.dynamicdrive.com) * This notice MUST stay intact for legal use * Visit Dynamic Drive at http://www.dynamicdrive.com/ for this script and 100s more ***********************************************/

Technology in Informal Economies – for the Developed World Too?

By Anjali Bean (Research and Policy Associate, IHC)
July 3, 2013

A major sign of a developing economy is the shrinking size and increasing regulation of the informal sector. Goods and services that were once unregulated and provided ad hoc by the community itself slowly get enveloped by the state or private companies that are required to act in a certain way and provide certain services.

This is generally considered a good thing; water and electricity are difficult or impossible to provide individually, and informal markets for both are often highly inefficient or predatory. Similarly, unregulated transportation can encourage reckless and unsafe behavior when there are no consequences and time is money.

However, in a blog post from the Informal Cities Dialogue, Nick Grossman argues that social platforms on the internet are beginning to reintroduce the developed world to informality. Beginning with eBay, but now including platforms such as CraigsList, AirBnB, SideCar and Kickstarter, informal “person-to-person” transactions have become a normal part of urban life. You no longer have to go through a company, store, or traditional financer to buy a car, rent an apartment for the weekend, or finance your next big idea; these services are now available from individuals or groups of individuals through peer-based platforms.

Not surprisingly these sites have many regulators and traditional institutions concerned, as they represent a shift away from the formality that that the economies of the developed world are based on. But they also represent an opportunity to harness the benefits that informal economies in the developing world already enjoy: flexibility, versatility and ability to take risks.

How informality can benefit the developed world and how peer-to-peer platforms can in turn help economies in the developing world remains to be seen, but it is exciting to think about how technologies such as this might change the way we do business, in Nairobi and New York City alike.

Read more at the Informal Cities Dialogue here.

Leave a Reply

  • Categories

  • Archives