Essential reading for anyone who thinks the economic underground can't be innovative:
Jan Chipchase, writing in The Atlantic, extols the impact of shanzhai products (shanzhai is the modern Chinese street slang for cloned or pirated knockoffs of big-name brands).
As Chipchase reports, Chinese firms sell 1.6 billion phones a year--and shanzhai producers "are starting to outpace the markets that they originally aspired to." He adds, "They're not satisfied with just copying. Shanzhai manufacturers are actually driving experimentation in the marketplace." One example: a phone that can take two SIM cards--a boon in places where service is spotty and you need two lines. He also suggests that these firms in the economic underground get their products from R&D to retail stores amazingly quickly.
The shanzhai 'hiPhone' may not be as good as the genuine iPhone, but it's far cheaper--making it a reasonable choice for people who can't afford the real thing but want some reflection of its looks and functionality. Far from being a drag on development, the existence of the informal economy is helping to bridge the digital divide.