In this hybrid research seminar on Friday May 1, 2026 at 12:00 pm Dr. Danilo Spinola is a Senior Lecturer in Economics at Birmingham City University (BCU) will present his research titled " Innovation Beyond Formal Boundaries: Modelling Capability Accumulation in Informal Firms".
Abstract:
Innovation systems scholarship has predominantly focused on formal firms and R&D-performing organisations as the central loci of knowledge production and technological change. In doing so, it has largely overlooked the role of informal enterprises, despite their structural prominence in developing economies and their participation in production, learning, and market coordination processes. This paper re-examines the analytical boundaries of innovation systems by conceptualising informal firms as endogenous actors whose strategic behaviour contributes to systemic dynamics. Drawing on evolutionary theories of the firm and the systemic perspective on innovation, we develop an agent-based model in which innovation emerges from the interaction of heterogeneous agents operating under bounded rationality and differentiated capability endowments. Informal firms are modelled as predominantly imitative actors, engaging in learning processes through doing, using, and interacting, and accumulating capabilities via repeated market and relational exchanges. Imitation is thus treated not as a residual or passive behaviour, but as a strategic mechanism embedded within coevolutionary system dynamics. Through a series of simulation experiments, we analyse how alternative configurations of interaction structures, opportunity regimes, and learning parameters shape capability accumulation trajectories and performance differentials. The results indicate that imitation can function as a dynamic pathway to capability upgrading under specific institutional and relational conditions. By incorporating informal firms into the analytical architecture of innovation systems, the paper contributes to debates on heterogeneity, inclusivity, and structural transformation, and advances complexity-based modelling as a methodological approach for examining innovation beyond formal institutional boundaries.
The zoom link to join the seminar online can be found here. This event is open to the public; all those interested in this topic are very welcome to attend. After the presentation there will be time for questions and discussion.
For any queries related to our UNU-MERIT Seminar Series, please contact Lizeth Melissa Molina Alvarez and Karthika Baby Sujatha by sending an email to seminars@merit.unu.edu.
