Posts Tagged ‘principles’

Work in Progress: An Introduction to the Informal Economy’s Commercial Environment


This topic is being shared in the form of a collection of essays on the following themes, each becoming hyperlinked on completion. Do bookmark this page for regular updates.


Introduction to Background and Context, some caveats apply
Fundamental Elements of Informal Sector Commercial Activity
Rural household financial management as a foundation
Linkages and Networks span Urban and Rural Markets
Underlying Principles for Financial and Social Contracts in the Informal Economy
Informal Sector Business Development Strategies and Objectives
Why A Blanket Approach to Formalization is not a Panacea
Disaggregating and Segmenting the Informal Sectors
The Journey to Formalization Cannot be Leapfrogged

 


Appendix:
Creating Economic Value by Design (John Heskett, IJD 2009)
Financial Behaviour Patterns Observed Among Households in Rural Informal Economy (IDRC, 2009)
More or Less: The Fundamental Principle of Flexibility” Slides (Informal Economy Symposium, 2012)
A Comprehensive Analysis of the Literature on Informal Cross Border Trade in East Africa (TMEA, 2016)

People-centered systems design thinking out loud

feature_jaimeThis morning I was pondering the complexity involved in weaving together four separate threads of ‘innovation’ into one holistic system. They were not unrelated to each other, and the end users are more or less the same for each, but each is also a standalone solution to a pain point in an ecosystem. I was tinkering with the idea of trying to knit them into one – would it be far too complicated, both to implement, and to develop conceptually? Or, would the complexity be worth the additional headaches because the outcome would be well worth the effort of integration into a holistic and seamless concept?

From the product development point of view, the research question is whether an integrated, seamless solution is more viable and desirable than four standalone solutions developed by individual teams, in parallel, within the same ecosystem, and for the same target audience. Feasibility is the question being evaluated, from the value for money perspective. Of course it could be tried, that’s the beauty of design – one attempts to build prototypes to test one’s paper based theories to see if they break in the real world. But was it worth the time and resources to build the prototype in the first place?

It was while grappling with this minuscule yet wicked problem that I was reminded of a gentleman I once heard speak at the Better World by Design conference in Rhode Island about 8 years ago. Jaime Lerner is very well known to urban planners and city designers, I’m sure, but perhaps not as familiar a name to the rest of us. He conceived the idea of the city as a living, breathing, organic system – a turtle, as you can see in the diagram above. Life, work, movement, are all integrated together.

While the systems design challenge I’m pondering is more technology based, as is usually the case in today’s world, and not a cityscape, I believe that one can take away some powerful insights from Mr Lerner’s philosophy for design planning for a complex human ecosystems. In this context, its the informal and rural economic system prevalent in the developing world. Not unlike Brazil, where Mr Lerner perfected his vision.

Commerce in the informal sector is a living, breathing, organic ecosystem made up of human beings in flexible, negotiable, and thus, reciprocal relationships with each other. Much of the groundwork for this conclusion can be discovered in the reports linked to here. If we set aside the cityscape, and consider the essence of Mr Lerner’s philosophy, we see that his three key concepts are life, work, and movement.

In the context of the informal valueweb, movement could be considered with far more layers of nuance than simply transportation or mobility as one would in the context of urban planning. And, in the context of an ecosystem, it could be stretched to cover the flows of value in between the nodes in a value web – these we’d earlier identified as information, goods, services, and currency. That is, movement is the lifeblood of the organic network, the transactions that take place, and most importantly, the element of give and take which distinguishes human to human interactions.

Thus, if we were to step back from the design of the details of such a complex human interaction system, we too could conceivably think of it as living organism – perhaps not a turtle, which is a better metaphor for a city; perhaps there’s some other metaphor waiting for us to stumble over. In the meantime, I do wonder if we have the underlying philosophy for the design of complex, interdependent human interaction systems?

 

Previously.

In sum

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Irregular income streams from a variety of sources pose their own challenges to both buyers and sellers but offer an opportunity through the flexibility designed into business models for the informal economies where this pattern of cash flow tends to be much more prevalent.

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Flexibility is key, as well as the ability to negotiate on “time” – frequency, periodicity, duration and “money” – amount. This works in the highly personalized transactions negotiated in most of the “developing” world but the challenge arises when those dependent on volatile cash flows meet “the system”, which cannot be negotiated with.

Between time and money in the equation of the underlying principle of flexibility is the “trusted network” or human beings. Facetime and financial flexibility have proportionate relationship to the success of a business model in such an environment.