Innovation in India's Informal Economy


Despite the fact that the informal economy accounts for about two thirds of GDP and 90% of employment, the informal economy seems absent from almost all discussions of any kind of low-C revolution. Poor consumers are least responsible for GHGs, but many of the products of the formally registered and regulated industries which cause 70 % India’s pollution are retailed in the informal economy. So does it play such a negligible role in pollution as most people have assumed? Another significant question is whether India’s informal economy would be an obstacle to a low carbon revolution. Our wider research has tackled both these questions but it is the second question that provoked the exploratory project reported here. While the technological and organisational components of a low-C revolution have been modelled in scenarios, here we focus on the sector’s own capacity to adopt the kind of technological and organisational changes that would be needed – in short to innovate. This study asks whether and how innovation takes place in the informal economy.

The paper has three parts. It first introduces and tries to clarify the complex and often ‘fuzzy’ structure of knowledge within which the question has to be answered. It then presents the case material from the fieldwork, before welding it into an argument relating to the sets of ideas with which we start.

An appendix of evidence may be found at gases-technology-and-jobs-indias-informal-economy-case-rice


Harriss-White, B.; Rodrigo, G. Innovation in India’s Informal Economy. (2015) 51 pp.

Innovation in India’s Informal Economy

Published 1 January 2015