IJMB Journal – Abstracts
International Journal of Management and Business
IJMB Volume VII, Issue 2
The Role of Informality in Socioeconomic Wealth Creation
Charles Hampden Turner and Raymond Ferris Abelin
Institute for Manufacturing, Cambridge University
E-mail: Charles Hampden Turner
The informal economy is becoming a formidable socioeconomic force, neither taxed or under government control. Initially associated with the economies of developing countries, the informal economy operates outside of established formal methods of wealth creation. Developed nations are now contending with the informal economy, where it appears to contribute to the destabilization and evolution of formal systems of governance. The dynamic between formal and informal economies is challenging international law due to increased competition outside of well-defined rules, regulations and guidelines for doing international business. The authors acknowledge entrepreneurship and innovation are key drivers of the informal economy. They contend that, since formal economies have also become heavily reliant on technological innovation, the resulting rapid, sometimes radical, systemic changes are the result of informal economic forces. Competition between industrialized nations is moving domestic and international business towards an age of informality.
Keywords: Informal, Formal, Economy, Entrepreneurship, Innovation.