*5.3. Economic Ecosystems for Overcoming Formal–Informal "Sector" Dualism*

Critically, embracing an economic ecosystem perspective advances the framing on transitions provided in the multi-level perspective on transitions framework to address the formal–informal system dualism that presents in African contexts. Indeed, the MLP framework is largely formulated on the basis of developed European and North American economies, where informality does not present in the way that it does in the Global South. In the framing provided in this study the concept of economic ecosystems becomes useful, as it enables a perspective that incorporates both formal and informal systems in a post-dualistic conception, hence supplementing the MLP framework, rendering it more appropriate and "fit-for-purpose" in the African context.

This is particularly the case because transcending classical and neoclassical economic dualisms between formal and informal "sectors" requires adopting a systems perspective and embracing a holistic heterodox perspective. In this respect, Roy [41] (p. 148) asserts that urban informality is not as much a sector as it is a "series of transactions that connects different economies and spaces to one another" and a "mode" representing "an organizing logic, a system of norms that governs the process of urban transformation itself". Hence, an economic ecosystem perspective that adopts a holistic systems perspective on formal and informal sectors and enables a post-dualistic conception is needed; one that is sensitive to the fluidity, overlap and porosity between them, as well as their fundamental inseparability [6]. In turn, this post-dualistic conception of formal and informal sector activities enables an entrepreneurial state led approach that is focused on local economic development—i.e., by adopting an economic ecosystem perspective—and remains agnostic with respect to whether economic activities are formal or informal. Instead, its focus is on organizing and institutionalizing economic ecosystems so that social innovation for SUD is prioritized rather than a particular "sector" and its activities.

#### *5.4. Towards Inclusive Fourth Industrial Revolution Cum Green Technology Growth Trajectories*

The question of SUD transitions—and ICT-enabled social innovation—cannot escape the realities that the new, globalized, data-driven, fourth industrial revolution-enabled economy has introduced. The dangers of the new "surveillance capitalism" [65], characterized by oligarchic big technology companies whose machine learning (ML) algorithm driven business models are predicated on trawling and collating large swathes of data (i.e., physical, digital and biological), must, in some respects, be catered for in any developmental strategy that seeks to engage with the fourth industrial revolution. This is not only because this has introduced acute power asymmetries between big technology companies and the consumers and users of their platforms, but because of the monopolization and deep inequalities that have accompanied it. This inequality manifests particularly in steep wage inequalities in big technology companies, such as Apple [1] (p. 185), as well as in the "the distribution of returns" [1] (p. 181). As Mazzucato [1] (p. 192) puts it, lamenting where "corporate success result(s) in regional economic misery", "(t)he big question for us here is: will the New Economy Business Model transform itself so as to distribute the benefits of the IT revolution?"

In conceptualizing what it means to build "green innovation ecosystems" [1] (p. 176) that are "symbiotic" [1] (p. 179), this study has proposed social innovation-based economic ecosystems as the enabling platforms for transitions to SUD and local economic diversification. In this respect, a deeper question can be asked, namely, what foundations support "'fairer' and more 'inclusive'" [1] (p. 181) growth? That is, not in respect of wage inequality, but in respect of monopolization by platform-based technology companies that become heavily dominant due to the ubiquity and heavy dominance and control of markets and services that corralling vast data sets affords them. It is conceivable that social innovation-based economic ecosystems for SUD may find themselves controlled and heavily dependent on larger platform operators that essentially render them bit players in the fourth industrial revolution economy. To this end, deeper, more fundamental considerations have to be made with respect to the underlying platform choices that underpin the emergence of the fourth industrial revolution in economies and societies in cities on the continent.

Vergne [66] makes an insightful and thorough analysis of the platforms underpinning the new data-driven economy and highlights two key differences that are of relevance in this respect. Namely, that the big-tech giants that have monopolized the surveillance economy are underpinned by ML algorithms that essentially centralize decision-making and communications, even though their delivery models may be distributed (e.g., Amazon and Uber). In this respect, centralization of power is essentially derived from the control of the algorithms that learn from data and are used to predict and control—to some extent—absorption of goods, services and commodities. Machine learning algorithms are centrally controlled and, hence, can—at the turn of a switch—be changed, impacting whole ecosystems of activities that are embedded in and rely upon that algorithmic reality.

In contrast, Blockchain, as a platform, is mediated by peer-to-peer consent by organizational members—through voting rights—over how that algorithmic reality is established. Blockchain essentially acts as a digital ledger that is decentralized and distributed where authenticated transaction data are securely stored [66] (p. 9). The chains represent a chronological history of transactions that cannot be unilaterally or centrally altered but requires that transactions are queued until consensus is obtained, whereafter the chain is grouped and recorded as a block. Blockchain essentially decentralizes communications creating a shared understanding of transactions whereby new members can quickly orient themselves and perform organizational tasks with contact with just a few organizational members. There is no need to interact with a centralized "command and control", so to speak, to become familiar with the institutions, or to make decisions. Hence, decision-making is distributed.

In sum, whereas ML platforms are centralized and distributed, Blockchain is decentralized and distributed. Citing Vukoli´c [67], Vergne argues that there are inherent advantages in decentralized platforms such as Blockchain, namely, that they (1) are able to broker trust, a currency that ML platforms are increasingly and noticeably lacking in and (2) are inherently predisposed towards reduced scalability, which mitigates against the formation of monopolies, as "services and applications have to be shifted away from the main chain" [66] and are shed from it. In this respect, Blockchain is inherently anti-monopolistic, mitigating against the "data gravity" ([68] in [66] (p. 3)) that underpins the ML-based platforms upon which big technology platforms are based.

Citing Boudreau [69], Vergne argues that the platforms of the future will be those without "central 'owners'" [66] (p. 15), capitalizing on decentralized trust where platform rules cannot be changed unilaterally by centralized command and control hierarchies. This presents a fundamentally different route, through which Africa and the Global South can engage with the new economy, i.e., where developing nations struggle to compete with the big technology giants that centralize decision-making through ML. It sets the scene for decentralized and distributed organizations to emerge as local providers of goods and services, where the platforms that fundamentally underpin how growth unfolds yields scalability without oligarchic dominance and peer representation that mitigates against runaway monopolization. Notably, this does not negate against existing "centralized, for-profit, non-neutral ML" platforms being "retrofitted with Blockchain to scale up outside of their initial market" [66] (p. 16), opening up room for offerings such as M-Pesa to retrofit [66] (p. 16) with Blockchain, as mentioned earlier. Rather, the key assertion is that more assiduous deliberation over what fundamental platform choices underpin economic ecosystems as enabling systems will likely impact the form of economies that emerge in absorbing fourth industrial revolution offerings.

#### **6. Conclusions**

In this study, the African urban context informs the theorizing by drawing on the literature on southern urbanism, particularly that relating to African cities. In theorizing, three key literature streams are further mobilized and integrated, namely, (1) social innovation and SUD, (2) economic ecosystems theory and (3) transitions to sustainability. In doing so, this study argues that small to intermediate African cities can facilitate broader transitions to sustainability through driving social innovation-based economic diversification at both local and macro-scales. Moreover, this study argues that this can be achieved by targeting the nexus costs of precarious African middle-class households by combining (1) green/sustainable technologies, infrastructures and service provisions and (2) fourth industrial revolution offerings to meet local development needs in African cities. Social innovation-based activities are critical to actualizing this vision. Harnessing

these activities into self-organizing economic ecosystems is key to generating broader scale transitions, as well as engendering multi-scale resilience at the same time. Hence, local economic ecosystem development is key to sustainability transitions in Africa and particularly in Sub-Saharan Africa. This, in essence, makes the argument for niche innovation activities—particularly social innovation—to be organized better (i.e., into local economic ecosystems). In this perspective, the state's involvement is rendered more effective, that is, in supporting the development of local and local–regional economic ecosystem creation and growth through social innovation that is sensitive to context, rather than the state engaging solely in centralized, large-scale strategic planning and/or research and development for innovation.

With respect to the entrepreneurial state, Mazzucato [1] (p. 27) presents "a case for a targeted, proactive *entrepreneurial* state, one able to take risks and create a highly networked system of actors that harness the best of the private sector for the national good over a medium- to long-term time horizon", with "the State acting as lead investor and catalyst which sparks the network to act and spread knowledge." Drawing on this understanding, this study argues for an interpretation of what the role of the entrepreneurial state should be in relation to the challenge of SUD in African cities, integrating the aforementioned literature streams to conceptualize transitions to sustainability. In theorizing from the perspective of African cities and by integrating these literature streams accordingly, the role of the entrepreneurial state in relation to social innovation in SUD is made clearer. Specifically, an emphasis on local economic development and diversification in African cities that draws on social innovation—which can be enhanced through an entrepreneurial state-led approach that adopts an economic ecosystem lens—to meet societal needs is required.

Lastly, this study also argues for deeper considerations regarding the underlying platforms on which these social innovation-based economic ecosystems and their products and services are to be made. Specifically, the entrepreneurial state should lead the way in shaping which foundational platforms become dominant, with a view to ensuring more equitable, diverse and inclusive growth and fostering trust-based symbiotic relationships within economic ecosystems. This consideration is critical for promoting diversification and mitigating against monopolization and control by private sector actors in transitions to SUD.

#### **7. Limitations and Future Research**

Three key limitations, that lie beyond the scope of this paper, present opportunities for further research on the key propositions of this paper.

First, one of the key limitations of this paper is that it does not explicitly deal with the question of what kind of governance may be required to actualize SUD and broader transitions to sustainability at the same time. What is clear is that multi-level governance that is "fit for purpose" [42] is required in order to act as a "glue" (i.e., coordinating framework) between national and local African governments, as well as between different sectors of society. Urban decision-making requires marrying national level decision-making (typically at a larger scale) with local context and their specific characteristics, constraints and opportunities. Multi-level governance can serve as a glue between different activities and development programs that act across scales and impact upon cities. It can also act as a capacity booster by drawing on leadership, management and technical skills and capacities from the different sectors that are distributed across different levels of governance and within cities. Critically, it can draw on a multi-scale understanding of what yields creative and adaptive capacity to govern multi-scale systems in service of broader transition objectives. Hence, further research into how the framing proposed in this paper can be actualized through multi-level governance is required, as without that understanding the role of the entrepreneurial state as proposed in this paper may not be realized.

Second, this paper also did not reflect in-depth on case studies of social innovation policies and activities in African cities that support SUD. It is conceivable, however, that even a non-comprehensive examination of these case studies might provide valuable insight into the value of the framing proposed in this paper and may enhance the robustness of that framing. More specifically, more in-depth studies of social innovation policies and activities in African cities would (1) shift the perspective from a continental appraisal to a more local analysis, (2) thereby also enabling a cross-case analyses that could in turn improve the robustness of the overall framing. Hence, this presents a second avenue for future research and the prospect of developing a set of propositions to enhance social innovation for SUD in Africa, which lies beyond the scope of this study.

Third, in generalizing the African urban condition, there is a need to qualify that the approach proffered in this study—i.e., social innovation-based economic ecosystems—is not intended as a blueprint. It is important to acknowledge the vast heterogeneity of territorial conditions across the continent as this limits any attempt at comprehensiveness from an interpretive model. The territory, in this study, is the city and the study makes an indepth analysis of what the appropriate scale of intervention is in this respect, particularly in the Sub-Saharan African context, highlighting that small to intermediate scale cities are the opportunity space for intervention. Moreover, the approach deliberately does not specify implementation priorities at the planning level but rather stipulates an inclusive approach and implementation modality that is sensitive to local context precisely to accommodate the aforementioned heterogeneity.

**Funding:** This research received no external funding.

**Acknowledgments:** The author would like to acknowledge the Allan Gray Centre for Values-Based Leadership for its continued intellectual and administrative support.

**Conflicts of Interest:** The author declares no conflict of interest.

### **References**

