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Beyond job creation, informal economic activities have received little recognition for their contribution to economic systems. However, in recent years, new research trends have suggested that enterprises in the informal sector have productivity potential that can be encouraged through technological innovation. Nevertheless, the majority of these studies come from Asian and African countries, relegating Latin America's contributions to a marginal proportion. Through a qualitative analysis, this paper makes a pioneering contribution to the topic from a Mexican perspective, corroborating the presence of different types of innovations in the informal plastic industry and sizing its reach and social diffusion. [ABSTRACT FROM AUTHOR]

This study outlined how the microenterprises overcome numerous challenges common to start-up through 'open development' characterized by collective sharing of knowledge, tools, equipment and workforce amongst competing microenterprises, and belonging to trade/professional associations that ensure that knowledge becomes a public good that can be accessed by everyone who needs it. The study found that majority of the microenterprises studied experienced scaling-up from between a few months to around three years from inception, while only a few scaled-up after three years. This paper shows strong positive relationships between variables capturing open development activities (internal training programmes within enterprise, knowledge acquisition from competitors within the cluster, intra-family learning and training, open innovations) and incidence of scale-up. Incidence of scale-up was captured using significant increase in the size of the enterprise, capital base, business activity or turnover or gross sales relative to start up. The study concluded that clustering of small businesses in Africa facilitates open development and is a potential avenue to overcoming the financial constraints commonly associated with small firms and can thus be an enabler of industry growth. [ABSTRACT FROM AUTHOR]