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Reframing the informal economy through social innovation Chakrabarti, Priyanka Apr 30, 2016

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 Reframing the Informal Economy Through Social Innovation  by  PRIYANKA CHAKRABARTI B.Arch., Birla Institute of Technology, 2010 A PROJECT SUBMITTED IN PARTIAL FULFILLMENT OF THE REQUIREMENTS FOR THE DEGREE OF  MASTER OF  SCIENCE (PLANNING) in THE FACULTY OF GRADUATE STUDIES  School of Community and Regional Planning  We accept this project as conforming  to the required standard  …………………………………………………………… …………………………………………………………… ……………………………………………………………  THE UNIVERSITY OF BRITISH COLUMBIA APRIL 2016 © Priyanka Chakrabarti, 2016    Reframing the Informal Economy Through         Social Innovation: ​Understanding and Eliminating         Regulatory Barriers to Market Entry in the DTES      2 I.   Executive summary  This Project examines the complex economic, political, and social factors that drive                       the informal economy in the Downtown Eastside (DTES) of Vancouver, British                     Columbia, Canada. The stagnation in welfare rates coupled with the lack of policy                         interventions has prevented the DTES community from pulling itself out of poverty                       and social exclusion. Using the theory of social innovation, this paper provides policy                         recommendations that can support the informal workforce and social enterprises in                     the DTES—which has the potential to make a significant contribution to poverty                       alleviation in the city of Vancouver.   The socio­economic characteristics and structure of DTES’s informal economy is                   explored using three on­going socially innovative projects in partnership with the                     Local Economic Development Lab (LEDlab)—The Binners’ Project, DTES Street                 Market, and Knack. These non­profit social enterprises are currently providing                   opportunities for social integration and economic development for DTES residents                   who have been working within the informal economy.   My project presents an opportunity for the City of Vancouver to engage, integrate,                         and build capacity among those that have limited economic options, who in turn can                           contribute to an equitable socio­economic regeneration of the urban environment.   Keywords Informal economy, social innovation, social innovation theory, policy, Downtown                 Eastside, social enterprise   3 II.   Table of contents I. Executive summary……………………………………………………………….3 II. Table of contents…………………………………………………………………..4 III. List of tables and figures………………………………………………………….6     1      Introduction……………………………………………………………………….7       1.1  Motivation for research…………………………………………………………...7     1.2  Goals and objectives of study……………………………………………….......7     1.3  Organization of the study………………………………………………………...7     2      Detailed project description…………………………………………………...9 2.1  History……………………………………………………………………………..9        2.1.1 The informal economy is globally ubiquitous……………………………....9        2.1.2 Recognising incompatibility with the formal economy…………………...10        2.1.3 Current policy and practise………………………………………………….11        2.1.4 Welfare cuts and poverty linkages………………………………………....12     ​2.2   Context: informal economy in the DTES………………………………….13        2.2.1 Understanding the informal economy……………………………………..13         2.2.2 Understanding the informal workforce………………………………........14        2.2.3 The significance of informal work………………………………………….15         2.2.4 Categories within the informal economy………………………………….16        2.2.5 Precariousness of informal work…………………………………………..18        2.2.6 Need for greater organization and cooperation………………………….19        2.2.7 LEDlab supporting social enterprises……………………………………..20     3     Theory of social innovation…………………………………………………...22 4   4     Methodology​…………………………………………………………………...24    5     Case studies…………………………………………………………………...28 5.1 The Binners’ Project………………………………………………………...28        5.2 DTES Street Market………………………………………………………...34        5.3 Knack…………………………………………………………………………37     6     Key findings…………………………………………………………………...40    7     Policy recommendations……………………………………………………49        7.1 Supporting individual informal workers…………………………………...49        7.2 Supporting social enterprises in the DTES……………………………….52    8     Conclusions…………………………………………………………………...53    9     Bibliography…………………………………………………………………..54  10     Appendix………………………………………………………………………58 9.1 Interview guide……………………………………………………………...58        9.2 Income Assistance program terminology………………………………..59        9.3 BC employment and assistance rates tables…………………………...60        9.4 Earning exemptions………………………………………………………..61     5 III.   List of tables and figures Figure 1: Hastings and Carrall, LEDlab’s vicinity……………………………...20 Figure 2: LEDlab’s system’s level learning……………………………………..21 Figure 3: The design, test, repeat cycle………………………………………...23 Figure 4: Binners’ Project at Khatsahlano street party………………………..30 Figure 5: Binner educating the public about proper waste disposal…………30 Figure 6: Binners sorting recyclables at Viva Vancouver​…………………………..​31 Figure 7: Binners Hook being demonstrated by a binner……………………..32  Figure 8: Close­up of the Binners Hook………………………………………...32 Figure 9: Design workshop for the Binners Hook……………………………...33 Figure 10: DTES Street Market……………………………………………….....35 Figure 11: One of the many vendor tables at the Street Market……………...36 Figure 12: Street Market next to Pigeon Park Savings………………………..36 Figure 13: Knack meeting………………………………………………………...38 Figure 14: Knack workshop……………………………………………………....39 Figure 15: Customer profiling…………………………………………………....45 Figure 16: Income assistance program terminology………………………......58 Figure 17: BC employment and assistance rates tables……………………...59 Figure 18: BC earning exemptions……………………………………………....60       6 1   Introduction  1.1 Motivation for research  This research supports the ongoing efforts of various non­profit social enterprises in                       1the DTES to build capacity and improve the economic opportunities for the informal                         workforce. It is motivated by my direct experience working with DTES residents who                         face barriers to fair compensation for the work they do, and stigma from the formal                             sector at many levels. After working as an intern for the Binners’ Project—a                         binner­led social enterprise—I have come to understand the capacity of social                     innovation to gradually transform the informal economy and empower the informal                     workforce.   1.2 Goal and objectives of the study  Using the lens of social innovation, the goal of this project is to provide policy                             recommendations for the BC Government on how to support individuals involved in                       the informal economy and reduce barriers to formal market entry. The objectives of                         this study are to recommend policies that could:  ­ Support innovative social enterprises by clarifying their legal framework ­ Provide informal workers with more support for integration with the formal                     economy.    1.3 Organization of the study  The following section of this study provides the background and context of the                         informal economy in the DTES, including details about the links between poverty,                       1Social enterprise can be defined as “organizations with an explicit aim to benefit the community, initiated by a group of citizens and in which the material interest of capital investors is subject to limits” (Borzaga and Defourny 2001).  7 welfare system, and current policies in place. Next, a literature review is conducted                         that focuses on the theory of social innovation. Section 4 describes the methods of                           data collection used in this study.   Section 5 provides an overview of the case studies. Section 6 conducts a qualitative                           analysis of the collected data to identify key findings. These key findings are shared                           in the form of emerging themes from the theory of social innovation to describe the                             similarities between all three case studies. The final section 7 includes policy                       recommendations for the City to support social enterprises and informal workers in                       the DTES. This study concludes with considerations for further research.                        8 2   Detailed project description  2.1 History  2.1.1  The informal economy is globally ubiquitous  The belief that traditional forms of work and production would disappear (Arthur,                       1954) as a result of economic progress has been proven to be unfounded since the                             70’s (Hart, 1973). ​Fast forward a few decades and we find that the informal economy                             is alive and well— expanding in developing countries (Medina, 1997) and thriving in                         developed nations (Cox and Watt, 2002). Today, the existence and expansion of the                         informal economy in Canada can be attributed in part to the process of globalization                           and the steady withdrawal of government funding for social housing and services                       (Hajnal, 1995; Smith, 2003).   The informal sector has not only survived, but expanded to include new industries                         which otherwise have always functioned within the regulated boundaries of the formal                       economy (Beall, 2000). ​The informal economy has been defined as “employment                     without labour or social protection—both inside and outside informal enterprises,                   including both self­employment in small unregistered enterprises and wage                 employment in unprotected jobs” (Chen, 2007, p. 2) . It comprises of economic                       2activities that take place outside the framework of bureaucratic public and private                       sector establishments and do not comply with government regulations.   While the informal economy reduces unemployment and underemployment, in most                   cases the participants are provided low paying jobs with little security. In large cities,                           this ​type of economy often exists alongside extreme poverty and social exclusion. In                         the DTES, the flexible and autonomous character of the informal economy                     2 9 predominantly comprising of survivalist activities, offers an opportunity for economic                   support and social inclusion to individuals living on the margins of society.   2.1.2 Recognising incompatibility with the formal economy  Most policy recommendations have been focussed on “formalisation of the informal                     economy” (William, 2005). The idea that all informal jobs can and should become                         formal low­barrier jobs is perhaps not the ideal approach to addressing the informal                         economy. Although there are obviously some candidates for this path, this approach                       fails to fully recognize the very diverse nature of the informal economy. Many                         survivalist endeavours will never be more than what they are. There are several                         individuals who prefer to work within the unregulated environment of the informal                       sector. These individuals should nevertheless be respected for the role that they play                         in reducing their own vulnerability to poverty. Policies that ignore or marginalize                       survivalist endeavours will never be successful in meeting the requirements of                     inclusive and integrated local economic development.    The informal economy contains a “continuum” (Andreas, 2015, p. 28) of economic                       3activities, and the associated complexity requires that policymakers develop                 strategies that take account of multiple impacts. There’s a symbiotic nature to the                         relationship between the informal and formal economies. In addition, a substantial                     amount of the income earned by informal traders is spent on the consumption of                           goods and services procured from the formal economy.       3­content/uploads/2015/11/DTES­Information­Hub­Survey­Project­Full­Report_branded.compressed.pdf  10 2.1.3 Current policy and practise  Historically, local government has dealt with informal economy actors largely in the                       context of by­laws, often enforcing regulations on informal street vendors. This                     approach has been based on the deep­rooted restrictive view of the informal                       economy being a “problem” that needs to be eradicated by the City (Cox and Watt,                             2002).   Derogatory perceptions of the informal economy—both with municipalities and some                   formal businesses—have contributed to the marginalization of this sector within                   official economic development policy in the past. The City of Vancouver’s Social                       Impact Assessment Report released in Spring of 2014 made sparse references to                       4the informal economy. However, marginalization of the informal workforce has been                     recognised recently in the official DTES local Economic Development Plan which                     5recommends the creation of “employment (especially low­barrier jobs) through                 inclusive social impact hiring and local employment opportunities” . The Healthy City                     6Strategy that has an ambitious projection of reducing “the city’s poverty rate by 75%”                           7mentioned the DTES Street Market in its comprehensive approach section and                     recognized the lack of coordination in its current policy response to poverty IN THE                           DTES. Considering the particular vulnerabilities of the informal economy participants,                   this move towards creating comprehensive policies that recognize the informal                   workers contribution symbolizes a radical step in achieving the goal of social                       economy (Brown and Novkovic, 2012) development at a local level. 4 ​­impact­assessment­2014­feb­26.pdf​, p. 21  5 ​­eastside­plan.pdf  6 ​Policy recommendation for “encourage Inclusive Local employment” under Section 10.4.1 of the DTES Local Economic Development Plan.­eastside­plan.pdf   7 ​​, P. 7  11 2.1.4 Welfare cuts and poverty linkages  As the number of individuals living below the poverty line has increased in recent                           years, social assistance expenditures have also been affected by severe federal cuts.                       A series of welfare cuts and structural changes were initiated under the BC Benefits                           Act of November 1995 (Hajnal 1995), in response to the rising numbers of welfare                           cases in BC. Under the ‘welfare to work’ program, the BC Benefits Act reduced                           welfare rates to prevent long term dependency. As the process has become harder                         for those already using the system over the last two decades, recipients eligible for                           benefits have been decreasing (Klein and Pulkingham, 2008).  In April 2002, the social assistance program saw further cuts in benefits, eligibility,                         and appeals (Fuller and Stephens, 2004). A two year limit was imposed for single                           persons who cannot prove they are facing serious medical challenges. Since then,                       the rigorous surveillance of workers and applicants has severely cut down the                       number of people receiving benefits. The dissolution of social policies and increased                       socio­economic polarity has exacerbated poverty (Smith and Ley, 1997) and social                     exclusion (Smith, 2003), increasing vulnerability of already marginalized groups                 (Raoulx, 1999; Gotham, 2003; Wacquant, 1999).  The Neo­liberal discourse adopted by the province of BC—favouring privatization                   over government intervention, and measuring success in terms of overall economic                     growth—has been devastating for the population dependant on social assistance. It                     has increased their exclusion from the formal economy and further deepened their                       reliance on alternative sources of income. The introduction of the two year welfare                         limit in 2002 lead to an increase in informal activities (Reitsma­Street & Wallace                         2004; Klein & Long 2003) throughout Vancouver and the numbers have gone further                         up since then (Smith, 2003). The Income Assistance rates have stagnated since                       2007. The story is the same for shelter allowances of $375 (Figure 17) and monthly                             12 earning limits which range between from $200­$800 (Figure 18). All these                     circumstances together have led to further engagement in informal                 income­generating opportunities in Vancouver.   2.2 Context: informal economy in the DTES  2.2.1 Understanding the informal economy   The informal economy in the DTES has always been perceived as comprising of                         predominantly survivalist activities. Various negative aspects have been used to                   describe the informal economy, including undeclared labour, tax evasion, and                   illegal/criminal activity (Romano and Chifos, 1996, p. 125). Some informal activities                     such as sex work and dealing of illicit drugs maybe considered harmful and                         problematic. However, the vast majority of informal economy activities involve                   transaction of goods and services within circumstances that are perfectly legal and                       innocuous. These activities are not necessarily performed with the intention of                     evading tax payments, legislations, or regulations. Therefore, the informal economy                   in the DTES should not be confused with the criminal economy and considered                         illegitimate. Some of the broad positive attributes of the informal economy in the                         DTES are as follows:  ­ Low barrier entry  ­ Independant participants ­ Skills acquired outside the formal sector ­ Small scale operations  There are many interconnections between the informal and the formal economies. In                       the DTES there are several levels of ongoing trade amongst participants from all                         walks of life—goods, tools, equipment, services, and acquisitions of skills sometimes                     crossing national boundaries. For example, goods purchased from a street vendor                     can be sold by a vintage store owner to the general public, who then sell it online for                                   13 a substantial price to overseas clients. It’s a constant cycle of buying and selling and                             usually the informal worker receives the least amount of profit. The informal                       workforce also provides services to formal sectors on a subcontracting or part­time                       basis. Many local businesses informally hire residents from the community for                     cleaning services, paying them below minimum wage. Such services go                   unrecognized and unaccounted for by the formal sector.   2.2.2 Understanding the informal workforce  Individuals entrenched in poverty and possibly suffering from certain mental and or                       physical disabilities often do not have many options to choose from, if at all any,                             regarding the kinds of jobs available to them within the rigid and inflexible structures                           of the formal economy. In the absence of adequate economic and social supports,                         individuals struggling with innumerable difficulties—whether it be staving off                 starvation, dealing with trauma, coping with cultural displacement , keeping a roof                     8over their head, or seeking help for disabilities and or addictions—often find                       themselves in situations where they have to do what they can to survive. The jobs                             that become easily available to them are mostly informal and flexible, offering some                         relief from their helpless situation.   There’s immense stigma surrounding the ethics of the work done by the informal                         workforce, primarily due to the lack of their contribution to the tax system. When the                             social assistance available to the community is not enough for basic sustenance, with                         just a $200 monthly earning allowance for people on basic income assistance,                       community members have little choice than to hide their overall income—effectively                     criminalizing their effort to make ends meet. Given the complexity of navigating the                         8 Cultural displacement, caused by the Residential School system and or lack of access to cultural practices and knowledge 14 welfare system, such income restrictions create unnecessary anxiety for the                   community at large, becoming endemic on welfare day .  9 Pilarinos (2015) states several barriers to employment that the informal workforce in                       10the DTES experiences on a daily basis—trauma, poverty, food insecurity, substance                     abuse, lack of affordable housing, disability, long term absence from the work force,                         stigma, rejection from jobs, and lack of relevant qualification being some of                       them—which can be difficult to navigate for the average formal employer without any                         assistance from the government.    There is no dearth of entrepreneurial potential amongst the informal economy                     workforce in the DTES. Many people within this community have a real knack for                           business, creativity, and innovation, often tapping into an impressive reservoir of                     skills. Such potential can flourish if certain institutional obstacles could be removed.                       The informal economy can serve as an incubator for business potential and an                         opportunity for on­the­job skills acquisition, as demonstrated by the case studies in                       this report. The informal sector can be a transitional base for accessibility and                         graduation to the formal economy if effective strategies and resources are put in                         place.  2.2.3  The significance of informal work   The informal economy should not be viewed as an outlier but as an essential base or                               foundation for all economic activities in the DTES. The formal and informal ends of                           the economic continuum are often dynamically linked. For instance, a binner                     essentially does the same job as a worker picking up recycling for the city. Binners                             9 ​B.C. issues welfare cheques on the last Wednesday of the month.   10­content/uploads/2015/11/DTES­Information­Hub­Survey­Project­Full­Report_branded.compressed.pdf 15 spend several hours a day collecting hundreds of refundable cans and bottles,                       cleaning up the city streets, and transporting collected recyclables to the nearest                       bottle depot. The same act that creates an income potential for a binner also creates                             a formal salaried position for a bottle depot worker. Hence, this very act of binning                             makes possible an entire recycling industry that is considered immensely profitable                     across Vancouver and the Lower Mainland.   Within the confines of the institutional policies and welfare system effective today, the                         informal economy is essential to those in need of flexible work opportunities. The City                           regulations often overlook categories of the informal economy. Trying to eliminate it                       or ignore it has a negative effect—high expenditure on regulatory practices for the                         City often used to harass or evict the informal workforce. In the absence of clear                             policies or set regulations towards the City of Vancouver has recently taken certain                         measures in addressing discrimination against street vendors by supporting projects                   such as the DTES Street Market. Having begun operations in July 2014, it is the only                               regulated space in Vancouver providing a safe environment for street vendors to                       legitimately sell their goods to the public.   2.2.4 Categories within the informal economy   The heterogeneous nature of the informal economy can be specifically categorised in                       several ways. However, based on my personal on­site observations while working                     with the LEDlab, I have only used certain categories explained in detail in a fact                             11finding study (Becker, 2004) conducted by SIDA in 2004 to illustrate the multitude of                           12perspectives from which the informal economy can be viewed within the context of                         the DTES.   11 ​​, Section 3.2  12 ​Swedish International Development Cooperation Agency  16 1)  Categories based on type of employment:  Informal employment works by way of compensation for goods and services. The                       following categories primarily focus on work that is not recognised, regulated, or                       protected by existing regulatory frameworks. These categories also include work that                     sometimes only involves exchange of goods or services (non­remunerative)                 undertaken in income generating enterprise.   a) Self­employed b) Wage workers consisting of employees of informal enterprises, casual                 workers, temporary and part­time workers, and unregistered workers.  c) Employers, i.e. owners of informal enterprises.   2)  Categories based on location of informal economy actors:  These categories are based on the characteristics of the locations within which the                         workforce operate.  1) Home based workers which: ­ Work from home and sell their products to the formal sector  ­ Supply goods or services to a particular enterprise, whether formal or informal; ­ Are irregular with employing workers 2) Street vendors 3) Seasonal or temporary job workers on building sites or road works 4) Those in between the streets and home, e.g. waste collectors  3) Categories by income and employment enhancing potential  This segment categorises the informal economy from the perspective of its income                       and employment enhancing potential. This potential is critical for determining the                     17 scope for upward mobility of various informal enterprises. For instance, the conditions                       of work, number for hours, and earning potential differ significantly among those who                         clear the streets of any refundable waste and those who sell goods on the street.   1) Enterprises that can contribute to the national economy—includes economic                 activities that have potential for generating growth or wealth.  2) Individuals who take up informal activities for survival purposes—activities are                   attractive due to the relative ease of entry, reliance on local resources and a                           minimum of capital investments. Marginalised and disadvantaged individuals               usually maximise their only asset: Labour.  3) Individuals doing a part­time informal job while working elsewhere, often due                     to low and irregular salaries—they are involved in such jobs to secure their                         living.   Due to the complexity of these categories, the informal economy could be described                         through the specific occupations of its participants—i.e. street vendors, construction                   workers and waste pickers. This heterogeneity should not be seen as an obstacle but                           a possibility to identify relevant entry points and to select target groups for various                           interventions. It must be clear which groups or segments are referred to when the                           informal economy is discussed.  2.2.5 Precariousness of informal work   The nature of the informal economy is precarious by default, as there is no                           guaranteed income. Most of the informal workforce has no guarantee that they will                         have the same work opportunity the next day. Since most of the community is also                             dependent on social assistance there is high anxiety with regards to declaring their                         income, due to fear of losing social assistance or being criminalized for not truthfully                           declaring their meagre assets. A lot of factors are at play for the informal workforce to                               18 continue working for below minimum wages or simply resort to providing services                       in­exchange of goods or vice­versa:  ­ Complexity of the welfare system and lack of information ­ Lack of entrepreneurial resources and support for individuals facing barriers to                     the formal economy ­ Unpredictable market conditions, i.e. lack of goods to sell or customers ­ Disabilities ­ Lack of part­time formal jobs for workers on income assistance ­ Encountering stigma when trying to engage in the formal economy  2.2.6 Need for greater organization and cooperation   There are over 260 agencies crammed into the DTES with expenses running up to $1                             million per day ​providing low­cost housing, social services and other support to                       vulnerable residents . Despite the services available to these residents it has been a                         13challenge to pull most of the community out of poverty. Many individuals still work                           informally and find it increasingly difficult to be legally self­employed or employed in                         any capacity by the formal sector.   There is a great need for more organization amongst the informal workforce, and                         registered social enterprises are capable of making such organization and                   co­operation possible (Lettice and Parekh, 2010). Social enterprises can provide the                     space and resources to induce the collective upliftment of marginalised people                     involved in the informal economy (Cecilia, 2015). In the past decade or so there have                             been some social enterprises that have been very successful in bridging the gap                         between the informal and formal economy in the DTES and provided support to                         impoverished individuals despite the worsening of systemic barriers (Klein and                   13 19 Pulkingham, 2008). Potluck, the DTES Street Market, and more recently the Binners’                       Project, are good examples of the supportive environment social enterprises can                     create. However, given the complexity of working in the DTES there had been a lack                             of collaboration between the various enterprises, limiting knowledge and resource                   sharing opportunities. Pilarinos (2015, p.17) recommends that community               organizations need to bridge the gap by sharing resources, space, and knowledge.                       He goes on to say that “instead of expending limited energy on competing with one                             another, organizations should develop stronger relationships and work collectively”.  Since 2015, the Local Economic Development Lab has been the bridge between                       14these social enterprises, becoming a platform for building connections and finding                     solutions for various engaged stakeholders. LEDlab brings together diverse                 perspectives and professional capacities and is primarily focussed on inducing                   systemic change.   2.2.7 LEDlab supporting social enterprises  Figure 1: Hastings and Carrall, LEDlab’s vicinity  14 20 LEDlab was developed by the joint effort of Ecotrust Canada and RADIUS SFU to                           innovate and build capacity amongst social enterprises based in the DTES. It’s                       mission is to fuel social innovation and create collaborative environments to build a                         vibrant and inclusive local economy. The diagram below shows that LEDlab works at                         multiple scales: in the acceleration of community projects on the group, as well as                           enabling systems­level opportunities with a cohort of community partner                 organizations.    Figure 2: LEDlab’s multi­level approach Source: ​  By linking graduate students with community partners and providing supportive                   resources in the form of workshops and prototyping grants, LEDlab enhances the                       capacity of local residents, organizations and networks. LEDlab’s role has been very                       influential in directing my policy recommendations, which gradually came to light as I                         worked with the community during my internship.     21 3   Theory of social innovation   Defined as ‘catalytic innovation’ where social change is the main objective                     (Christensen et al., 2006) social innovation “refers to new ideas that work” (Mulgan,                         2007a) in meeting social goals. Social innovation is essential to develop solutions to                         critical problems and create social change (Michelini, 2012). Social innovation                   stimulates systemic transformations or change, often challenging the existing                 socio­economic systems and structures which no longer serve the ‘community’                   (Gladwin et al., 1995; Noci and Verganti, 1999; Mulgan et al., 2007a).   Features of social innovation are (Michelini, 2012): ­ Generating positive social impact ­ Driven by both social and economic motivation ­ Must be scalable ­ Can take different forms and run by different actors  The impact created by social innovation is primarily focused on increasing the quality                         of life of the target community (Michelini, 2012). The product or service provided by                           the community is a vehicle for generating funds needed to continue creating social                         impact in a sustainable way. Most social enterprises also have to address the                         challenge of resource use efficiency to manage low cost structures. There is a lot of                             difference between social and business innovation. Social innovation is driven by new                       ideas generated to meet societal needs, whereas business innovation is usually                     directed by the exploitation of new markets and increasing of profit margins. The                         theory of social innovation is considered to be more challenging to define and                         practise than theories of business innovation (Hall and Vredenburg, 2003) because                     the practitioners of this theory often focus on social development rather than profit                         (Shaw and Carter 2007). Hall and Vredenburg (2003) also state that social                       enterprises deal with a lot of uncertainties and work with a wide range of                           22 stakeholders. They believe that such enterprises have to consider public perceptions                     and reactions to their work while pushing for  innovation.   Social enterprises often take a long time to establish their services in the for­profit                           market—dedicating a lot of time and resources to build a reputation, gain access to                           volunteers, and get professional assistance (Spear 2006). In the nonprofit sector                     there is a lot of competition for grants and funding (Austin et al., 2006) which can only                                 be availed by social entrepreneurs once they have established a ‘community’ (Shaw                       and Carter, 2007). There is a need for nonprofit social enterprises to generate                         revenue for economic sustainability, which requires them to pursue business and                     social opportunities with ‘entrepreneurial leadership’ (Chell et al. 2005). Chell (2007)                     also explains that social entrepreneurs inherit the difficult task of creating social                       benefit in addition to financial profit and production.   The theory of social innovation is essential in guiding the policy recommendations of                         this paper. There are several emerging themes that are influenced by the theory of                           social innovation, and these themes have been discussed in detail in Section 6.                         Figure 3 is an infographic depicting the constant cycle of designing and testing that is                             essential to creating products or services that help social enterprises generate                     income and create positive impact.   Figure 3: The  design, test, repeat cycle Source: Value Proposition Design (Osterwalder et. al., 2014, p. 38) 23 4   Methodology  Viewing the informal economy through the lens of social innovation I provide my                         recommendations based on the following methods:  1) Direct immersion in the community  Between September 2015 and April 2016, I served as an intern with the Binners                           Project and the Local Economic Development Lab. The LEDlab, initiated and                     supported by Ecotrust Canada and RADIUS SFU, partners with community                   organizations to explore innovative ways to build a more vibrant and inclusive local                         economy in Vancouver’s Downtown Eastside. I was able to work in various capacities                         with both the binning community as well as professionals striving to empower                       marginalised informal workers in the DTES. I participated and helped coordinate all                       Binners Project pilot programs, focusing heavily on the events and pick­up service,                       details of which have been provided in section 8.1. Through deep immersion in this                           project I gained a lot of knowledge and first hand experience of the struggles and                             stigma binners face on a daily basis, and how empowering it has been for them to be                                 part of the Binners’ Project.   Through this internship I had the opportunity to shadow binners, and engage in                         conversations with them about institutional barriers and poverty alleviation. The                   binners shared their future ambitions and fears, and mentioned the Binners Project                       being pivotal in helping them gain leadership skills, self­confidence, and better                     access to the economic opportunities.   I was also surrounded by various professionals and pioneers of social enterprises                       who have committed to uplifting the informal workforce in the DTES. Through                       discussions with them in workshops and meetings I refined my understanding of the                         24 systematic issues that affect a population depending heavily on welfare and social                       assistance for survival. The recommendations in my report have been influenced by                       these direct interactions. My experience with LEDlab really helped me understand                     that social innovation helps enterprises take actions irrespective of the systems in                       place, in order to change the system gradually.   2) Workshop organised by LEDlab  On December 17th, 2015, a mid­term workshop was organised by LEDlab to bring                         together the core team of graduate student interns and DTES community                     partners—primarily consisting of project directors and coordinators from the Potluck                   Cafe Society, the Binners’ Project, DTES Street Market, and Carnegie Outreach—to                     reflect on the partnership program model its impact on the community. While                       addressing socio­economic barriers experienced by the informal workforce, the                 diverse perspectives in the workshop embodied the themes of social innovation                     emerging in the work they are doing. The attendees broke into small groups and                           discussed solutions to various problem statements. The policy recommendations in                   this report have been guided by statements recorded in response to one question in                           particular:  “What type of collaboration/intervention/work might address policy barriers (like                 earnings exemptions limits/clawback) that present common challenges for all                 organizations?” This question was pivotal in the discussion and helped participants address many of                         the systemic policy barriers, providing ideas and solutions with great clarity. Their                       responses illuminated the fact that such clarity could only be obtained through many                         years of  experience working directly with various communities in the DTES.   25 3) Case studies  I have used three social enterprises working in close partnership with LEDlab —The                         Binners’ Project, DTES Street Market, and Knack—as case studies for this report.                       During my time with the LEDlab I had the opportunity to work as an intern with The                                 Binners’ Project. Given the collaborative environment at LEDlab I was able to interact                         closely with my colleagues working as Project Coordinators for the DTES Street                       Market and Knack. Through this synergetic work environment we discussed common                     challenges in our respective projects, and helped each other with our projects when                         needed. I witnessed the successes and struggles of all three social enterprises                       through my experience and it has been instrumental in guiding me with the key                           findings and policy recommendations made in this report.   4)  Semi­structured interviews  I had the opportunity to get some key insights through in person interviews with my                             colleagues—the director and program manager for the Binners’ Project and Project                     Coordinators for both Knack and the DTES Street Market. I have also supplemented                         the key finding with insights from my own experience working with the Binners’                         project. The purpose of these interviews was to recognize the emerging themes                       pertaining to the theory of social innovation that are reflected in the work of all three                               enterprises. I structured the interview in three tiers:  ● Context­—This section is intended for understanding the specific               organizational context and their role in the community.  ● Challenges­—What went well and what didn’t, and where along the process                     did challenges occur and how were they overcome? ● Solutions­—What tools, supports and social innovations have helped them                 along the way? 26 See attachment (Section 10.1) for the complete list of interview questions developed                       and used for this purpose.                         27 5   Case Studies  5.1  The Binners’ Project My observations for this case study have been drawn from my experience doing an                           internship (September 2015­April 2016) for the Binners’ Project in partnership with                     the LEDlab. My efforts within the project during those 8 months were dedicated to                           refining, testing, and implementing the various pilot programs, and assisting with                     broader community engagement efforts.   Significance of the Binners’ Project  Binners, also known as ‘bottle collectors’, are among the most marginalized groups in                         Vancouver’s urban environment. They depend on refunds received from collecting                   bottles and cans for their livelihoods. The act of binning is usually invisible to the                             public eye, taking place in hidden back alleys of various neighbourhoods. Aside from                         the occasional dumpster diving binner seen by an unassuming passerby and the                       rattling of shopping carts pushed by binners making their way to the nearest recycling                           depot, the informal recycling industry is largely ignored by the public. Binners                       comprise of a diverse range of individuals, be it impoverished Chinese seniors or                         DTES residents. This population is entrenched in poverty, and suffering from housing                       insecurity and political invisibility.   The Binners’ Project was started in 2014 by Ken Lyotier, a binner himself, who                           15founded the binner­run bottle depot, United We Can, in Vancouver. The project is a                           unique and an informal income generating initiative for binners in the City of                         Vancouver, dedicated to improving their economic opportunities and reducing the                   stigma they face as informal recycling collectors. Comprising a core group of binners                         who actively participate in all aspects of the project, this innovative social enterprise                         15 ​ 28 is striving to give binners (regionally and nationally) recognition for their meaningful                       contribution to society and fair compensation for their hard work. This binner­led                       project has identified a number of pilot programs such as the ‘Binner Events’, the                           ‘Pick­up Service’, and the ‘Binners Hook’ to promote better access to recyclables for                         binners, while increasing awareness of the work binners do and building connectivity                       between binners locally and nationally to improve their quality­of­life.   Pilot programs  Binner Events: ​The Binner Events program was created to raise awareness about                       the valuable service that binners provide, increasing economic opportunities for them                     while enabling greater engagement with the public. Recycling is encouraged by the                       city and it will soon be mandatory for all public events to ensure recyclables are                             prevented from going to the landfill. Fulfilling recycling needs in accordance with the                         Greenest City 2020 Action Plan, the Binners’ Project has found a niche in the                           recycling market for events in the city of Vancouver. The binners provide a variety of                             services, such as manning the bins, educating the public about recycling by making                         sure they discard their recyclables properly, sorting recyclables, and picking up                     refundables from the site. Binners get to keep the money after cashing in all the                             refundables at the local depot.  29  Figure 4: Binners’ Project at Khatsahlano street party Credit: Robin Weidner   Figure 5: Binner educating the public about proper waste disposal Credit: Robin Weidner 30  Figure 6: Binners sorting recyclables at Viva Vancouver Credit: Robin Weidner Binners Hook: ​Developed by binners in collaboration with Basic Design, these                     hooks will encourage the public to show their support for binners by safely leaving                           their recyclables. ​Through this program residents will be able to place their binner                         hook—sold by the project for $10—in their back alleys and leave recyclable products                         with a deposit value for a local binner to pick up ​on their daily walk. Through the                                 Binners Hook pilot program, the project has now taken on the challenge of installing                           hooks in all neighborhoods across the city. The hook also support the City of                           Vancouver’s Greenest City 2020 objectives by encouraging residents to recycle and                     finding an alternative to the conventional recycling boxes that often become a target                         for pests. ​There are long­term feasibility plans in place for this program to be a                             success including the possibility of a manufacturing and installation partnership with                     the city that would allow greater scalability of this project for wider use.  31  Figure 7: Binners Hook being demonstrated by a binner  Credit: Anna Godefroy Figure 8: Close­up of the Binners Hook  Credit: Anna Godefroy  32  Figure 9: Design workshop for the Binners Hook Credit: Will Selviz Photography  Pick­up Service: ​Binners play a role in reducing the problem of overflowing bins.                         Removing refundable containers from the recycling or waste stream in partnership                     with businesses or offices is mutually beneficial. The Binners’ Project serves as a                         connector, supporting binners at this initial stage. The binners are provided with                       business cards, green t­shirts, and ID badges. The pick­up service, started in Fall                         2015, is provided free of charge to all businesses and office spaces, and binners get                             to keep the full refund from the containers they pick up. Since the inception of the                               program, the pick­up service has been helpful in breaking down barriers between                       binners and the formal sector. The businesses have found a way to help the binners                             in a more direct way—by letting binners come in through the front door, interacting                           with them and increasing their visibility.       33 5.2 DTES Street Market   The DTES Street Market is a registered BC society. It was started in 2010 by the                               Downtown Neighborhood Council (DNC) and Vancouver Area Network of Drug Users                     (VANDU). What began as a “protest­and­occupy” movement in response to police                     harassment has now become a peer­run and peer­governed organization. The                   Street Market society today provides a safe and legal vending space for the DTES                           residents. The market’s key focus lie on building capacity to run operations smoothly                         and destigmatizing vending activities.   The City of Vancouver and Central City Foundation are two of the largest external                           funders of the market. The society works with the City of Vancouver, Vancouver                         Police Department, Portland Hotel Society, and various Business Improvement                 Associations in the DTES among others to ensure the success of its operations.  Revenue generation  With over 800 currently registered vendors operating in three locations—62 East                     16Hastings (Monday­Friday), 501 Powell Street (Saturdays) and Pigeon Park                 (Sundays)—The Society’s revenue generation activities include renting tents and                 tables on market days, selling coffee, pop, freezes, and raffle tickets. The income                         they generate through vending activities is in addition to their social assistance funds.  16 Only DTES residents are allowed to be vendors at the DTES Street market.  34  Figure 10: DTES Street Market  More than a marketplace  The vendors and volunteers take a lot of pride in their work and consider the market a                                 place of sanctuary in the DTES. Since the society is peer­run, it has encouraged                           members in this community to take on leadership roles in various capacities,                       including being board members of the society. It has instilled a sense of self­worth for                             its vendor members. There is on­going social interaction between DTES residents                     and outsiders with more than 41% of customers come from outside the DTES (Miller,                           2014) . This type of interaction has been instrumental in breaking down barriers and                         17increasing legitimacy of street vendors. The market is changing the power structure                       of merchandise and service delivery in the city of Vancouver. As of June 2014, the                             market had raised over $25,000 through its income generating activities,                   demonstrating the resiliency of the society.  17­street­market­research­paper­vendors­customers.pdf 35  Figure 11: One of the many vendor tables at the Street Market   Figure 12: Street Market next to Pigeon Park Savings  36 Challenges with economic sustainability  All staff receive a below minimum wage volunteer stipend of about $4 to $8 per hour.  Any profit made by the market goes back into capital costs. To make its revenue                             sources more sustainable and profitable, the market is always exploring opportunities                     to increase its earnings, including products that can be sold year­round in their                         merchandise to attract customers with more purchasing power . 18 5.3 Knack ​(initiated and supported by Potluck Cafe Society)  The Potluck Café Society is a non­profit social enterprise and a registered charity.                         Funded through donations, grants, and profits generated by its for­profit catering                     company, Potluck is on a mission to create jobs and provide healthy food to the                             DTES residents. Since the catering company is a sustainable for­profit entity, the                       earnings from the catering company are transferred to the umbrella charity Potluck                       Cafe Society.  Impact hiring  Potluck’s goal of ‘impact hiring’—creating employment opportunities for individuals                 facing barriers to employment—was initiated through Recipes for Success Services                   19(RSS). ​Potluck’s catering organization also provides employment to individuals with                   barriers ­ and RSS was developed to help move their lessons learned in impact hiring                             out to other employers. The goal of RSS is to increase the number of employment                             opportunities in the DTES by encouraging and supporting businesses to participate                     in impact hiring.   18 ​ This group of customers includes tourists and people from other parts of Vancouver.  19­for­success/ 37 More recently, the connection between Potluck and RSS led to the creation of a                           digital badging platform called Knack. The name Knack was chosen to refer to                         individuals who have a certain talent/skills—have a “knack” for something. Target                     employees for Knack are DTES residents who are on social assistance. These                       individuals often face systemic barriers to employment and are limited to working just                         a few hours a week. Income generating opportunities through knack can offer these                         individuals more flexible part­time jobs that will allow them to supplement their social                         assistance funds, without violating any regulations of their welfare policies.    The process of digital badging  Knack badges are digital credentials representing workplace skills that are learned                     through workshops or while on the job through an employer registered with Knack.                         The process comprises of badge “earners” (trainees), badge “issuers” (Potluck) and                     badge “consumers” (employers). Badge earners (trainees) attend an initial Knack                   workshop to earn the eight fundamental soft­skill badges. The soft­skill badges are                       the minimum requirement to becoming an earner and then working for a badge                         consumer (employer). Potluck has created the workshops and examination to prove a                       certain skill. It’s possible for other relevant issuers to be employers who can vouch for                             skills gained by individuals through direct work experience. Potluck doesn’t charge                     the trainees for  workshops or any fees for obtaining the badges.   Knack will be using the online badging platform called Credly, a website that offers ​a                              service ​platform free of charge that can verify, share, and manage digital badges.                         Since Credly is an open sourced website, Knack can create their own badges with                           personalized branding, without having to create the back­end software for facilitating                     different users. The trainees (earners) will be able to use the platform free of charge.                             As of now, employers are not being charged to use the Knack platform for job                             advertising. Knack can potentially verify if an employer has a safe, supportive                       38 environment and this may create a fee for service opportunity to capture revenue.                         Some new employers who use Knack could become customers of RSS, which can                         then capture revenue and be reinvested in Knack.    Figure 13: Knack meeting  Figure 14: Knack workshop Source: Anna Migicovsky  39 6   Key findings   In their study on social innovation, Lettice and Parekh (2010) described four                       emerging themes after analysing their interview data. I have drawn my findings from                         the same themes to tie together my observations and the key informants reflections,                         emphasizing the role of social innovation in guiding the social enterprises mentioned                       in section 5.   1) Changing the lens  The DTES community has for years been described as a complex and diverse                         population facing multiple problems and most social services available to this                     community are provided by outsiders. The focus for too long had been on solving the                             problem rather than discussing what the problem was in the first place. The social                           enterprises that were the focus of my case studies approached the DTES from a                           different angle, allowing their perspective to adapt as they learned more about the                         overarching issues facing the community. They saw strength in individuals                   considered to be weak, and found resources in places no one in the formal economy                             had previously explored. More importantly they were able to communicate their vision                       to their community partners and procured funding for their ideas .   The impact of social innovation on the community is twofold: they are shaped by the                             system, and in turn influence the system (Lettice and Parekh, 2010). Each enterprise                         had to deal with the colossal task of shifting the perspectives of both the community                             members they were trying to help, and the outsiders that needed to be convinced                           about the viability of their idea.   40 For the Binners’ Project the primary goal of all interventions was to make binners                           visible, to help them take ownership of their rights and contribute to the development                           of their city, socially and economically.   “At its core, the Binners’ Project aims to foster face­to­face interactions                     between binners, residents, and the community at large.” ­Director, Binners’ Project  “Staff, students, volunteers, and binners, all work closely on implementing                   pilot programs at local levels, while the overall mission of the project, to build                           a stronger social presence and voice for one of the most marginalized                       communities in Canada, is implemented at the national level.”  ­Program Manager, Binners’ Project  The Binners’ Project had to change the way the formal economy saw binners, and                           also how the binners thought about themselves. The pick­up service program                     challenged binners to view themselves as service providers. The program made all                       participants aware of the positive environmental impact created by the act of binning.                         The binners providing the service became more visible to the public by walking                         through the front doors of businesses and doing pick­ups, instead of rummaging                       through the dumpster in the back alley.    The Project Coordinator at the DTES Street Market described how they changed the                         lens: “Vending laws in Vancouver were not allowing people to set up the                       market on the street. The only way they could create safe vending                       areas was by setting up a market on the street to protest against the                           laws, changing the institutional lens.  The Street Market is also challenging the public perception, by lowering                     the barriers to market entry. Street vending is legitimate in this space                       41 and its very existence negates the perception that everything sold by                     street vendors is junk or stolen.”  ­ Project Coordinator, DTES Street Market  The DTES Street Market helped the vending community find a common voice and                         gave them the opportunity to interact with outsiders in a regulated space, breaking                         down stereotypes at all levels. The market helped the city see value in street vending                             and also helped vendors find validation and legitimacy in their work.   The Project Coordinator for Knack shared similar observations:  “Knack plays an important role in advocacy. Employers don’t know that                     individuals on welfare have an earning exemption. It’s also not actively                     known that these individuals are legally allowed to work and the extra                       $200 income effectively doubles their spending power. “ ­ Project Coordinator, Knack  Knack is changing the lens with which employers view potential employees on social                         assistance. Knack badge earners always had employability potential, but it took a                       new perspective and innovation to make employers aware of that potential.    2)  Bridging the gap  These social enterprises have managed to bridge the gap between the formal and                         informal economy, opening various communication and business channels between                 them. There is more general engagement between people from different walks of life                         at the market, which has led to the development of collective empathy. The Project                           Coordinator for the Street Market noticed new relationships between people at the                       market:  42 “In the past there was barely any interaction between city officials and                       low income people. The Street Market has opened up the                   communication channels, building links between two groups from               different power backgrounds, and more importantly, illuminating the               leadership possible from within the DTES Community.”  From the business perspective, The vendors have flexible pricing on the goods they                         sell, so the market addresses purchasing needs of  locals and outsiders.    “The Street Market provides access to goods that wouldn’t be available                     at a comparable price elsewhere. The low income consumers really                   benefit from such a service. If someone needs to buy a shirt and they                           can’t go into a shop they can always go to the street market.  The Project Coordinator for Knack mentioned the important role Knack plays in                       lowering the language barrier knack earners  face in the job market: 20 “The badges provide a common language between employers and                 Knack earners and they describe competency based skills. This helps                   Knack earners market their skill set to the formal market. On the other                         side of the relationship the employers can describe the skills with                     badges required for a task. ”  It’s all about understanding where the opportunities are and how Knack plays a key                           role in simplifying the job application process for knack earners:  “Awarding badges to knack earners also contributes to a culture of                     recognition for the skills and expertise of this population. This allows                     20 ​People facing barriers to employment. They are currently enrolled in Knack and earning badges.  43 agencies to recognize and honour key contributing members of the                   community and help them build confidence. The badges are important                   for knack earners to navigate the employment continuum. Seeing paid                   opportunities listed on the Knack platform, provide them with the                   motivation and clear guidelines to apply and start working.”  Social innovation also provides enterprises with the ability to connect previously                     unconnected parts of the market, or find new spaces in between. The Binners’                         Project found that there was a recycling gap at big public events. Once the binners                             got formally involved in sorting and recycling at events, they collectively prevented                       more bottles and cans from going into the landfill. The project also recognised that                           there was a gap in public education about recycling, despite it being a priority for the                               city as per the Greenest City 2020 initiative. Hence, the binners involved with the                           project began providing educational services while manning bins at events, and were                       compensated for doing so.   "These initiatives act as a bridge between binners, businesses, and residents                     through which binners gain access to items (including redeemables and                   goods that could be upcycled for reuse) that would otherwise end up in the                           waste stream. This contributes to the circular economy.”  ­Director, Binners’ Project  3) Building a new customer base  The ongoing process of finding a new customer base has been essential for all three                             social enterprises, as it continues to generate new revenue streams for them. The                         customer can change depending on the strategy and direction taken by the                       enterprise. This process of finding a new customer base has been well­depicted in                         Figure 15.  44  Figure 15: Customer profiling Source: Value Proposition Design (Osterwalder et. al., 2014,p. 24)   Using a similar process of customer profiling, the Street Market helped the vending                         community find a different clientele with more spending power. Potential clients who                       previously felt uncomfortable participating in informal commerce within the                 unregulated gathering of street vendors can now enjoy the safe and enterprising                       environment of the market. The visual of organized vendors, clean kiosks, and the                         presence of uniformed volunteers all add an element of safety and stability to the                           market.   “The entry of new customers from outside the community has increased                     the earning potential of all vendors. Customers from other                 neighborhoods and tourists can now buy goods in an organized and                     sanctioned space.” ­Project Coordinator, DTES Street Market  Social innovation helps enterprises rethink and reshape market preferences and                   often challenges the status quo. For instance, Knack has created a platform for                         employers who now have access to an untapped labour market, which had always                         45 existed, but was previously undervalued. Knack’s regulated platform helps the knack                     earners list their skill­set by earning badges and making it visible to potential                         employers.   “Knack taps into an asset based approach by recognizing the diverse                     skillsets and lived experiences of the target employee. Most employers                   don’t have access to resumes of such individuals and Knack helps them                       find the right candidates to fill the employee gap.” ­Project Coordinator, Knack  Social innovation often results in the production of commodities or services that serve                         the need of a new or niche customer (Lettice and Parekh, 2010). This process,                           termed “disruptive innovation” in the business innovation literature (Christensen,                 1997; Dosi, 1982; Schumpeter, 1975), is the path the Binners’ Project chose for the                           Binners Hook. The hook is a low cost, easy to install, and pest­controlling alternative                           to a conventional recycling bin. Currently, the hook has been bought and installed by                           many people who belong to the ‘niche customer’ category—residents who care about                       binners. The customers also have the option of asking for a binner to be paid to                               install the hooks for them. People who often leave bottles and cans by the door or                               bins for binners clearly understand the benefits of the hook and the difference it can                             make to a binners life. If implemented throughout the city, it would greatly reduce pest                             problems, dumpster diving, and injuries caused by broken glass. The program has                       been implemented with the hope that eventually the entire city will become a part of                             the movement, generating income for the binners.    4) Leveraging peer­support  Since the beginning of my internship at LEDlab I observed how the social enterprises                           continually demonstrated their strong ability to build successful teams both within and                       46 outside the communities with which they are operating. They are able to effectively                         communicate their vision with different individuals working in different capacities over                     and over again. This form of leadership has helped them build tight­knit supportive                         communities that have become the backbone of the enterprises. The Project                     Coordinator for the Street Market reflected on how the vending community added to                         the resiliency of the organization:  “The Street Market is an alternative place for people to hang out and                         socialize. the volunteers support each other a lot. If one is going through                         hard times the rest of the group supports them. They keep each other                         informed and look out for one another. It’s a very supportive network of                         people who keep this market running seven days a week.”  Knack’s Project Coordinator echoed similar observations, while clearly stating that                   the community development at Knack is still in its early stages:  “Knack is slowly tapping into existing peer groups involved in other                     volunteer­based workplaces. We have experienced that there is a                 higher chance for individuals to attend sessions and finish the workshop                     series if their peers join them in this endeavour.”  The Binners’ Project, led by its core group of binners, has been very successful in                             creating a community of binners who support each other in many ways. They work                           together when doing pick­ups and events. The Binners hook wouldn’t have                     materialized without their insights, efforts, and cooperation during the design phase.                     They have been able to successfully launch each pilot project and garnered a lot of                             support from the public.   47 "We believe that working more closely together is the first step toward broader                         recognition of waste­pickers roles in society, and consequently improved                 livelihoods for binners in Canada.”  ­Director, Binners’ Project  The staff have had to work really hard in keeping up the morale of the group by                                 providing consistent earning opportunities and mentorship to the binners. Their                   contribution in terms of leadership, networking and guidance has been monumental                     in raising the profile of the binners in the city. These reflections signify the importance                             of proper management of networks and ties as the social enterprises grow.                    48 7   Policy recommendations  “Everyone needs some give”  “Current policy needs to address employment flexibility and bridge the gap in understanding flexible labor force”  “People are drawn to employers who offer socially conscious employment, where they provide education and training”  “We need to be able to create an environment of teamwork in the DTES”  ­ Quotes recorded during the LEDlab workshop held on December 17th, 2015    Social innovation alone cannot help the DTES informal workforce from becoming                     socio­economically stable. After analyzing the data collected from methods explained                   in section 4, I have provided the following policy recommendations that can help                         individual informal workers as well as the social enterprises supporting them. A                       glossary of terms pertaining to the Income Assistance system has been provided in                         section 10.2.    7.1  Supporting individual informal workers  1)  ​ Reforming the Income Assistance system  Also known as welfare and social assistance, “Income Assistance is provided by the                         provincial government as a last resort to people considered eligible under a set of                           strict rules. it is available only to individuals and families who have no employment,                           have used up their savings, and have exhausted all other options.” (Klein and                         Pulkingham, 2008, p. 8)   49 ● Income Assistance rates must be increased ​and earning exemptions need                   to be revised to adjust for inflation and living standards in Vancouver for all                           income assistance recipients.   ● The narrative about “alleviation of poverty” needs to be re­introduced                   into the legislation. It’s crucial to understand and re­define the real purpose                       of income assistance to prevent the system from becoming a punishment for                       the poor.  ● The welfare terms need to be annualized ​for all income assistance                     recipients (not just those with PWD or PPMB status). Given the complexity                       21 22of the system, it’s very difficult for individuals on welfare to apply for income                           assistance every six months. There is a lot of fear and anxiety amongst those                           on welfare regarding this matter.   ● Administrative practices that permit people being cut off must be                   revised​. Klein and Pulkingham (2008) stated that people with severe                   disabilities were considered very employable and placed in the expected to                     work category. These individuals found themselves cut off from welfare for                     failing to find employment. The situation hasn’t changed since then for people                       on welfare. They face several barriers to employment and without any                     additional supports can’t find work. Such policies prevent rehabilitation into                   society and often times lead to homelessness. Within the expected to work                       category, the income assistance program needs to be able to Identify a group                         that is more employment ready and not dependent on immediate pay.  21 ​Person with a Disability (PWD), definition provided in section 10.2  22 ​Person with Persistent and Multiple Barriers to Employment (PPMB), definition provided in section 10.2    50  ● Simplifying the Income Assistance program and improving ease of                 access to information. The language around welfare needs to be simplified                     with a reduction in the number of steps one needs to complete. People need to                             be able to navigate the program without any fear or confusion.   ● Make it easier to get on disability.​As described in section 2.1.4, ​a two year                              limit is imposed on people who are not able to prove that they are suffering                             from serious medical problems. Such regulations are applied inappropriately,                 causing unacceptable hardship and harm.   2) Institutional supports for employment  ● Gradual reduction in welfare when one’s wages start exceeding                 ‘allowable earnings’ . ​People should not be immediately cut off from                   23receiving welfare after they’ve obtained a job. There is no guarantee that they                         will be able to sustain their job over a long period of time and they usually have                                 no savings. There needs to be a gradual reduction in welfare funds as the                           individual become more independant. For example, welfare funds can be                   clawed back by 25% for every 6 months the individual manages to keep their                           job. Such policies can help ease the burden and provide support while they                         integrate into the formal economy.   ● Setting up an employment bank for individuals on welfare​. Most                   individuals don’t have any disposable income when they finally get employed                     and stop receiving welfare funds. Many participants at the LEDlab workshop                     echoed the need for a ‘nest egg’ for people on welfare and the important role it                               can play in financially supporting them through their first few months of being                         off income assistance.   23 As per the earning exemptions mentioned in Section 10.4 51  7.2  Supporting social enterprises in the DTES  ● Amnesty for evidence based social innovation. ​Social enterprises should                 have sanctuary from regulations pertaining to informal income during the                   start­up stages. In the beginning they are usually working to define their                       services and getting community members involved. Hence, they need some                   time to find the legal methods of payment and income generation that works                         best for them. Whether that be through honorariums or exchange of services.   ● Relaxing bylaws on a case­by­case basis. ​Certain regulations can be more                     of a hindrance and interfere in job creating opportunities. For instance, binners                       are fined for using shopping carts, due to the lack of a better mode of                             transportation for their cans and bottles, even if the carts have been bought                         from stores. Such rules also have an impact on social enterprises directly                       working with similar groups and don’t have the means to bypass them.            52 8   Conclusions  The informal economy will exist as long as there are barriers to entering the formal                             economy. Given its importance in providing basic livelihood to people who are                       otherwise dependent on the welfare system, it’s crucial to change the perspective                       with which we look at the informal economy. Viewing the informal sector as a reaction                             or adaptation to the shortfalls of the welfare system highlights the need to address                           the underlying causes of poverty rather than penalizing those who must work within it                           to survive. ​The main challenge is to develop innovative and supportive policies that                         recognize the contributions of the informal economy and its workforce, without                     obstructing its potential for job creation and economic growth.   There are several excluded and marginalized individuals and groups in the DTES                       who have limited voices. The primary goal of all interventions aimed at the informal                           economy should be to make these invisible groups visible. This visibility of the                         informal workforce can ensure that opportunities for income generation and                   entrepreneurship are not diminished.   The informal economy’s workforce is comprised of a highly diverse range of                       individuals, and society’s acceptance and integration of this sector into the formal                       economy could contribute positively not just to the social economy movement but                       also to the sense of community and self­worth of residents in the DTES. This includes                             funding and supporting community­led social enterprises that have the potential to                     help specific marginalised groups in a very targeted way.     53 9  Bibliography  Austin, J., Stevenson, H. and Wei­Skillern, J. (2006) ‘Social and commercial                     entrepreneurship: same, different, or both?’, ​Entrepreneurship Theory and               Practice​, January, pp.1–22.  Beall, J. (2000) From the culture of poverty to inclusive cities: Re­framing urban                         policy and politics. ​Journal of International Development ​12: 843­56.  Borzaga, C., & Defourny, J. (2001). ​The emergence of social enterprise​. London:                       Routledge. Brown, L., & Novkovic, S. (2012). ​Social Economy: Communities, Economics​. Cape                     Breton University Press. Chell, E., Karatas­Ozkan, M. and Nicolopoulou, K. (2005) ‘Towards a greater                     awareness and understanding of social entrepreneurship: developing and               educational approach and a research agenda through a policy­driven                 perspective’, ​British Academy of Management Conference​, September, Said               Business School, Oxford University. Chell, E. (2007) ‘Social enterprise and entrepreneurship: towards a convergent theory                     of the entrepreneurial process’, ​International Small Business Journal​, Vol. 25, No.                     5, pp.5–26. Christensen, C.M, Baumann, H., Ruggles, R. and Sadtler, T.M. (2006) ‘Disruptive                     innovation for social change’, ​Harvard Business Review (HBR Spotlight​),                 December, pp.2–8.  Cox, R. and Watt, P. (2002) Globalization, polarization and the informal sector: The                         case of paid domestic workers in London. ​Area ​34(1): 39­47.   54 Dosi, G. (1982) ‘Technological paradigms and technological trajectories’, ​Research Policy, (11)3​, 147–162. Retrieved from­7333(93)90041­F   Fuller, S. A., & Stephens, L. (2004). ​Women's employment in BC: Effects of government downsizing and employment policy changes, 2001­2004​. Vancouver, B.C.: Canadian Centre for Policy Alternatives, B.C. Office.   Gladwin, T.N., Kennelly, J.J. and Krause, T­S. (1995) ‘Shifting paradigms for                     sustainable development: implications for management theory and research’,               Academy of Management Review​, Vol. 20, No. 4, pp.874–907. Grieco, C. (2015). ​Assessing social impact of social enterprises does one size really                         fit all.​ Springer International Publishing. Hajnal, Z.L. (1995) The nature of concentrated urban poverty in Canada and the United States. ​Canadian Journal of Sociology ​20(4): 497­517.  Hall, J. and Vredenburg, H. (2003) ‘The challenges of innovating for sustainable                       development’, ​MIT Sloan Management Review​, Fall, pp.61–68.  Hart, K. (1973). Informal Income Opportunities and Urban Employment in Ghana.                     The Journal of Modern African Studies J. Mod. Afr. Stud.,​ 11​(01), 61.  Hart, S. L., & Christensen, C. M. (2002). The great leap: Driving innovation from the                             base of the pyramid. MIT Sloan Management Review, 44​(1), 51­56. Retrieved                     from Klein, S., & Pulkingham, J. (04/01/2008). ​Living on welfare in BC : Experiences of                           longer­term "expected to work" recipients. Canadian Centre for Policy                 Alternatives. 55 Lettice, F., & Parekh, M. (2010). The social innovation process: Themes, challenges                       and implications for practice. ​International Journal of Technology Management,                 51​(1), 139­158. Lewis, W. A. (1954). Economic Development with Unlimited Supplies of Labour.                     Manchester School The Manchester School,​ 22​(2), 139­191.  Medina, M. (1997) Informal recycling and collection of solid wastes in developing                       countries: Issues and opportunities. The United Nations University: Institute of                   Advanced Studies, working paper no.24.  Meyskens, M., Moriah Meyskens, Colleen Robb­Post, Jeffrey A Stamp, & Alan L                       Carsrud. (07/01/2010). ​Entrepreneurship theory and practice: Social ventures               from a resource­based perspective: An exploratory study assessing global ashoka                   fellows Baylor University, Hankamer School of Business, John F. Baugh Center                     for Entrepreneurship. doi:10.1111/j.1540­6520.2010.00389.x Michelini, L. (2012). ​Social innovation and new business models: Creating shared                     value in low­income markets​ Springer. Mulgan, G., Ali, R., Halkett, R. and Sanders, B. (2007a) ​In and Out of Sync: the                               Challenge of Growing Social Innovations​, NESTA Research Report, September. Noci, G. and Verganti, R. (1999) ‘Managing ‘green’ product innovation in small firms’,                         R&D Management​, Vol. 29, No. 1, pp.3–15.  Osterwalder, A., Pigneur, Y., Bernarda, G., Smith, A., & ebrary, I. (2014;2015;). ​Value                         proposition design: How to create products and services customers want (1st ed.).                       Hoboken, New Jersey: John Wiley & Sons, Inc. Pilarinos, A. (2015, December ). LOCAL ECONOMIC DEVELOPMENT LAB. ​The                   DTES Hub Survey: Mapping the continuum of income­generating opportunities in                   Vancouver’s Downtown Eastside. ​Retrieved January 2016, from             56­content/uploads/2015/11/DTES­Information­Hub­Survey­Project­Full­Report_branded.compressed.pdf Schumpeter, J. A. (1975). ​Capitalism, socialism and democracy​. New York: Harper                     Perennial. Shaw, E. and Carter, S. (2007) ‘Social entrepreneurship: theoretical antecedents and                     empirical analysis of entrepreneurial processes and outcomes’, ​Journal of Small                   Business and Enterprise Development, ​Vol. 14, No. 3, pp.418–434. Smith, H. (2003) Planning, policy, and polarization in Vancouver’s Downtown                   Eastside. ​Tijdschrift voor Economishe en Sociale Geographie ​94(4): 496­509.  Spear, R. (2006) ‘Social entrepreneurship: a different model?’, ​International Journal                   of Social Economics​, Vol. 33, Nos. 5/6, pp.399–410. Williams, C. (2005) Formalising the informal economy: The case for local initiatives.                       Local Government Studies ​31(3): 335­349.             57 10   Appendix 10.1  Interview Guide Context  ● What is the organizational context? How is it internally organized? ● How are decisions made? Who has to be consulted to make the decisions?                         Who drives change? ● How are your supported? Where does the funding come from? where do you                         see room for improvement in this support? ● How did you decide on the services? Who was instrumental in pursuing this                         vision? How did you respond to community needs? ● How are you maximizing the social impact this project is having? ● Were your expectations different from the impact that was actually produced?   Challenges  ● What challenges did you face within the project, and what helped you? ● What challenges do you see ahead for your project? ● What has been really influential in this project?  Solutions  ●  What would be useful as a tool or resource that you don’t have currently? ● What key pieces of advice would you provide to others that want to start a                             social enterprise? ● What would you have done differently?  58 10.2  Income Assistance Program Terminology  Figure 16: Income Assistance program terminology Source: Klein and Pulkingham (2008), Living on welfare in BC, p. 6 59 10.3  BC Employment and Assistance Rates Tables  Figure 17:  BC employment and assistance rates tables Source: ​  60 10.4  Earning Exemptions   Figure 18: BC Earning Exemptions Source: 61 


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