Informal Sector Innovation and IP: Concepts, Metrics, and Policy Considerations

How does innovation happen in the informal sector? What appropriation strategies are used to control or distribute social, economic, or technological benefits? To help answer such questions, our analysis connects concepts, definitions and data regarding the informal economy, innovation, and intellectual property in order to establish a framework for further qualitative and quantitative research and the improvement of public policies in respect of these issues.

Cover page of WIPO Economics Series Working Paper

The informal economy, innovation and intellectual property

This interdisciplinary framework is the first of its kind, interconnecting previously separated areas of study. With this work my co-authors, Sacha Wunch-Vincent and Kun Fu, and I start to bridge the disciplines of law, economics, management, engineering, sociology, and other fields relevant to the appropriation of informal sector innovation.

We first review the literature defining the informal economy, and present an original synthesis of statistical data regarding the informal economy’s social and economic significance.

Second, we apply established and emerging concepts of innovation to the context of informal systems.

Third, we discuss a spectrum of appropriation mechanisms, ranging from formal intellectual property rights to informal mechanisms of knowledge protection, sharing and exchange.

Fourth and finally, we review existing policy approaches toward innovation in the formal economy, and establish a framework to consider future scenarios for the application of intellectual property concepts in this context.

You can download “The Informal Economy, Innovation and Intellectual Property – Concepts, Metrics and Policy Considerations” from WIPO’s website, where it was published as Economic Research Working Paper No. 10 in the Economics and Statistics Series. It is also available on SSRN.

Our research on this topic was also presented at a special seminar in Geneva, together with reports from case study authors. Online video of the seminar on the economics of intellectual property is right here.

If you want to read more about the context for my research on informal sector innovation, check out the Open AIR project that I co-lead.