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Innovation has been discerned as a catalyst that enables firms to remain relevant and sustainable. In recent years, the innovation discipline has been extended to the informal sector. Nonetheless, to date little is known about the process that is followed by informal micro-enterprises to execute innovation activity in each innovation phase. Thus, this study sought to establish an understanding of the process that is followed by informal micro-enterprises to execute innovation activity in each innovation phase. The study adopted a mixed-methods research design to sequentially collect and analyze quantitative and qualitative data from informal micro-enterprises that are based in the townships of the Gauteng province. The study revealed that credible customer assemblies are used to acquire knowledge and information necessary to execute innovation activity and to test innovations before they are launched in the market. Moreover, while informal micro-enterprises mostly use internal resources to transform innovative ideas into innovations, coopetition relationships aid to foster open innovation and limit the strain on internal resources. The findings suggest that informal micro-enterprises innovate differently from formal small businesses and there is a need for researchers and the government to introduce policies and initiatives to enhance open innovation in the informal sector. [ABSTRACT FROM AUTHOR]

The literature revealed that 70–80% of South African small businesses, including informal micro-enterprises, fail in the first year of their existence. Innovation has been recognized as a catalyst that can enhance informal micro-enterprises' probabilities to survive and transform them from survivalists to sustainable businesses that grow the economy and create jobs. As far as it can be reasonably determined, there has not been a systematic review of the literature on innovation activities of informal micro-enterprises in the Gauteng province, South Africa. This study aims to present a systematic review of the literature, as well as research gaps identified in the literature, and future research opportunities. This paper thus systematically reviews the literature on innovation activities of informal micro-enterprises in the Gauteng province. The study revealed that the innovation capacity of informal micro-enterprises is severely hampered by innovation tradition and social tax. Subsequently, informal micro-enterprises engage less in innovation activity and those that do innovate often engage in incremental rather than radical innovation. Radical innovations are more crucial than incremental innovations. Thus, there is a need for researchers and government organizations to establish initiatives that can aid the informal micro-enterprises to engage more in radical innovation. [ABSTRACT FROM AUTHOR]