The transition of enterprises from informality to formality – some evidence from Zimbabwe
The idea that the informal sector can never do more for the economy than provide a temporary holding ground for the unemployed is challenged in this article. Research into formal sector businesses in Zimbabwe reveals that many businesses started off in the informal sector, before growing and 'graduating' into the formal sector. The initial survivalist strategies of using family labour and working from home were replaced by strategies to upgrade technology, employ additional labour and move premises into industrial areas. Eventually it is difficult to distinguish between 'graduating' enterprises and those that started out in the formal sector.