Why Black Market Entrepreneurs Matter to the World Economy

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Why Black Market Entrepreneurs Matter to the World Economy, by Robert Capps. Wired, January 2012.

Not many people think of shantytowns, illegal street vendors, and unlicensed roadside hawkers as major economic players. But according to journalist Robert Neuwirth, that’s exactly what they’ve become. In his new book, Stealth of Nations: The Global Rise of the Informal Economy, Neuwirth points out that small, illegal, off-the-books businesses collectively account for trillions of dollars in commerce and employ fully half the world’s workers. Further, he says, these enterprises are critical sources of entrepreneurialism, innovation, and self-reliance. And the globe’s gray and black markets have grown during the international recession, adding jobs, increasing sales, and improving the lives of hundreds of millions. It’s time, Neuwirth says, for the developed world to wake up to what those who are working in the shadows of globalization have to offer. We asked him how these tiny enterprises got to be such big business.

Wired: Are there things that the US should be doing to take better advantage of the realities of System D in the developing world?

Neuwirth: Absolutely. For starters, if we really want to engage in true, ground-level economic development in these countries, then we have to begin looking at these markets. These are the places where the bulk of people are being employed. And we have to listen for these markets to tell us what’s needed in a community. It’s not a bureaucrat in Washington or Nigeria who can best establish what’s needed to help the poor in Lagos. It’s the people who are working in these markets and living on the streets who can tell us that. And maybe more US companies can begin acting like Chinese firms, recognizing that there’s a market there and a niche to be filled. In the future, it’s going to be a very lucrative and important niche indeed.