Jaqueline Pels, Luis Araujo and Tomas Andres Kidd
In developing economies, 30% of the gross domestic product on average is undertaken by unregistered businesses. The informal economy leads to high opportunity costs by preventing…
Abstract
Purpose
In developing economies, 30% of the gross domestic product on average is undertaken by unregistered businesses. The informal economy leads to high opportunity costs by preventing gains from trade with strangers. To overcome this obstacle, sellers who usually operate in the informal economy should strive to move to formal markets. Current theories are drawn from a view of markets as institutions governed by formal and informal rules. In a nutshell, informal-formal market transitions must be met with a regulative solution. However, the overall results have been disappointing. This failure invites a re-diagnosis of the problem that informal sellers face to act in formal markets and suggesting novel solutions. This paper aims to address this gap.
Design/methodology/approach
This is a conceptual paper. The authors adopt MacInnis’s (2011) framework to characterize the approach to theory development.
Findings
The authors argue that extant views of formal/informal markets differences address only one of Scott’s (2014) three pillars (regulative, normative and cultural-cognitive). By drawing on Bourdieu’s legacy, the authors propose a cultural-cognitive reading of institutions and suggest it offers a lens to understand the problem as an access challenge, and thus a marketing problem. This perspective allows us to conceptualize informal/formal markets as two distinct institutional fields and argues that all individuals inhabit a particular habitus and contend that moving between markets requires a habitus shift. Thus, acting in formal markets involves bridging a habitus gap. Finally, the authors argue the need for a market-facing intermediary that takes on a market habitus bridging role.
Research limitations/implications
The authors suggest future research efforts could benefit from this new conceptual lens as a means of re-diagnosing other forms of market access that have produced disappointing results.
Practical implications
By looking at differences between formal and informal markets as a habitus gap, the allocation of public funds to support transitions can be better targeted and spent.
Social implications
The concept of market-facing intermediaries suggests that the beneficiary (e.g. informal seller) and target populations can be different. This insight could catalyze social innovation and trigger novel perspectives to design systemic solutions.
Originality/value
Conceptualizing the formal-informal market transition as a habitus gap suggests new directions to resolve access challenges and a new mediator solution.
Details
Keywords
Jaqueline Pels and Tomás Andrés Kidd
The purpose of this paper is to develop a framework that expands business model innovation literature by including a social goal, the emerging markets (EMs) environmental…
Abstract
Purpose
The purpose of this paper is to develop a framework that expands business model innovation literature by including a social goal, the emerging markets (EMs) environmental characteristics and adopting a bottom-up perspective.
Design/methodology/approach
This paper draws on a single-case study. Sistema Ser/CEGIN (SER–CEGIN) is an Argentine social business that offers high-quality medical healthcare to BOP users.
Findings
The paper presents a new conceptualization on business model innovation that includes three dimensions: firm-centric, environment and customer-centric. The framework incorporates to the traditional framework on business model innovation, the social profit equation, the general and task environment and the end-user, as well as the dynamics between them.
Research limitations/implications
While the authors acknowledge the importance of studying the components of the business model operating levels (economic, operational and strategic) to determine the type of business model innovation (revenue, enterprise and industrial), the framework incoporates the environment and customer-centric dimension. The suggested framework opens new streams of research both for the innovation business model literature as well as for the EMs – bottom of the pyramid (BOP) literature.
Practical implications
To achieve economic and social goals, particularly in the BOP, firms need to adopt a bottom-up approach to understand the components of their business model that need to be modified.
Originality/value
The paper proposes a novel business model innovation conceptualization which is useful for both researches to better study business models in the BOP and for firms to successfully operate in the BOP.
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Aim of the present monograph is the economic analysis of the role of MNEs regarding globalisation and digital economy and in parallel there is a reference and examination of some…
Abstract
Aim of the present monograph is the economic analysis of the role of MNEs regarding globalisation and digital economy and in parallel there is a reference and examination of some legal aspects concerning MNEs, cyberspace and e‐commerce as the means of expression of the digital economy. The whole effort of the author is focused on the examination of various aspects of MNEs and their impact upon globalisation and vice versa and how and if we are moving towards a global digital economy.