Published on February 9, 2021

Innovation challenge: More data about the informal economy in Ecuador

The first phase of the innovation challenge "For more data on informality" took place virtually on January 15-17. The event was led by the UNDP’s Accelerator Lab and had the participation of experts in the field of labor informality from the International Labour Organization (ILO), the United Nations Development Programme (UNDP), and UN Women. More than 70 teams registered to participate in the competition and several students from the School of Data shared their experiences regarding data analysis and visualization.

The innovation challenge is part of the inter-agency project "Expanding the social protection system for young men and women in the informal economy" financed by the Joint Fund for Sustainable Development Goals of the United Nations System.

Young people, especially women, and people with lower education levels are the most affected by labor informality; and thus, do not have access to universal social protection. According to data by the Ecuadorian National Institute of Statistics and Census (INEC by its acronym in Spanish), during 2019, labor informality affected 96% of people between 15 and 19 years old, 79% of those between 20 and 24 years old, and 63% of those between 25 and 29 years old. Furthermore, according to ILO’s national official Fabián Vallejo, workers in the informal sector are between 26% and 40% more prone to fall into poverty than those in the formal sector. For women, this problem is even more serious; Paola Gutiérrez from UN Women mentioned that the negative impact on the labor market during the pandemic affected young women 1.5 times more. Besides, during the health crisis, the sexual division of labor has worsened, "caregiving responsibilities mean that women have less time available to take part in the labor market," added Gutiérrez.

Data is essential to evaluate the situation of young people in the Ecuadorian labor market, and thus design better public policies and services. Through the Innovation Challenge initiative, digital solutions to collect information on young people are explored, contributing to the creation of a national registry on young people in the informal economy.

This initiative allows building solutions collaboratively, in conjunction with the target group and potential users of the new digital tool. Among the participants of this first phase, 2 to 3 finalists will be chosen after evaluating their proposal’s feasibility, user experience, usefulness, and creativity. Subsequently, in the second phase, the selected teams will work on the development of a prototype. In the final stage, a jury composed of technical specialists of the organizing entities and several other external experts will select the winning team. In addition to the prize, if the winning team has the capacity to develop the project and/or lead its implementation, they may also be considered as an implementing partner of the proposed digital solution.

Through the Accelerator Lab, the JP explores transformative mechanisms to take into account the current conditions and perspectives of young people, and thus provide creative solutions that are scalable at the national and regional level.

The transition of young people to formality will contribute to reduce inequalities by improving employment conditions, income, and access to social protection and care services. In the long term, the Programme also seeks to eradicate several related problems such as extreme poverty, child malnutrition, inequality, and thus contribute to the achievement of United Nation´s Sustainable Development Goals.