Undervaluation of informal sector innovations: Making a case for revisiting methodology

The informal economy is emerging as a new normal. It is distinctively pervasive both in the Global South and the North. Of late, scholarship in development economics has captured its knowledge component. Yet, the focus of innovation studies is exclusively on the exchange value, scalability and large-scale commercialization of innovations thereby overlooking informal sector innovations. This paper, through an extensive review of the literature on the subject, attempts to find out the other non-economic and methodological explanations, which have led to the marginalization of informal sector innovations. This paper attempts to deconstruct the political, philosophical and methodological reasons that have contributed to the undervaluation of informal and alternative knowledge systems. Further, to explore the gaps and suggest new ways of studying the subject afresh, a critical review of the existing methodologies is also undertaken. This paper identifies that the dominant research methodologies and the ‘universal’ but restricted narratives about innovations have greatly contributed towards the exclusion of alternative knowledge forms including informal sector innovations in the mainstream development discourses.