Present and future of the use and impact of information and communication technology in informal microenterprises: Insights from India

Abstract

Using Indian cases, the present paper argues that the usage of information and communication technologies (ICTs) in informal microenterprises in the developing world is still at a nascent stage. The use is mostly limited to mobile phones and the personal domain. The impact of its usage on the growth of the enterprises is also limited.The characteristics of these enterprises, which are predominantly walk-in customers, smaller size, and the nonuse of electricity, can explain the low usage and impact of ICTs. The future pathways for linking ICTs and informal enterprises are discussed in the light of emerging automation technologies. It appears that low-cost ICTs like mobile applications are likely to play a significant role in the growth of such enterprises, which needs to be studied in the future.

ICT development and shadow economy: Empirical evidence from the EU transition economies

“…The bidirectional effects of ICTs on the shadow economy are confirmed by some previous scientific findings (Bhattacharaya, 2019;Chacaltana et al, 2018;Chandra, 2017;Garcia-Murillo & Velez-Ospina, 2014Ilavarasan, 2019;Masiero, 2017;Rangaswamy, 2019) (see Table 2). Velez-Ospina (2014, 2017) raise the hypothesis that ICTs may contribute to reduction in the size of the shadow economy because, being multipurpose, they serve as an engine for the search of information on education, employment and public services which, in its turn, empowers population, provides wide opportunities for personal and professional improvement and makes public services easier accessible.…”

“…The impact of ICTs on informal enterprises is uneven because the informal sector itself is heterogeneous Chandra (2017) Literature review, the intercom and road system analysis ICTs are used by local communities to expand informal networks Rangaswamy (2019) Literature review, critical assessment ICTs (in particular, the Internet) serve as a business platform for informal economy Chacaltana et al (2018) Non-exhaustive web search ICTs are most likely to promote transition to formality in the labor market Ilavarasan (2019) Literature review, critical analysis of the informal sector in India…”

“…Similar findings were obtained by Masera (2017) who states that introduction of the biometric identification systems in India helps citizens obtain digital identities and transact in the cashless economy, but the shift to formality is marginal. Ilavarasan (2019) even notes that advanced ICTs are hardly used in developing countries due to predominance of walk-in customers, small size of informal enterprises and the nonuse of electricity. On the other hand, some earlier studies (Esselaar, e.t al., 2007) propose that more sophisticated ICTs are much more likely to be used by formally operating entrepreneurs, while informal agents mainly stick to mobile phones.…”

IT for the informal sector in developing countries: A broader perspective

“…Ilavarasan's () paper “Present and future of use and impact of Information and communication technology in the informal microenterprises: Insights from India” extends the focus on digital divide and argues, based on the Indian case, that usage of information and communication technologies (ICTs) in informal microenterprises in the developing world is still in the nascent stages. The informal microenterprises have not (yet) received the desired and expected impact of ICTs.…”

“…Extensive reviews of the academic literature on mobile phone use and adaptation by the informal sector and small‐medium enterprises are available (Donner, ). The use of other information technology–based devices and/or applications including both social‐media–based networking applications or professional work‐related applications such as task schedulers, e‐commerce platforms, payment systems, and bookkeeping applications now demands discussions in the context of the informal sector (Ilavarasan, ; Rangaswamy, ).…”