Africapitalism in action: Harnessing entrepreneurship and innovation for Africa’s socioeconomic transformation

Abstract

Purpose: This paper explores how digital entrepreneurship is reshaping informal economies in Sub-Saharan Africa, introducing the novel theoretical construct of “transformative informality” – derived from grounded empirical data – to explain how indigenous entrepreneurial practices, digital infrastructure and innovation ecosystems interact to mitigate socioeconomic hardship and to identify context-specific models that challenge Western-centric assumptions. Design/methodology/approach: The study adopts a qualitative interpretive approach, drawing from secondary data, policy reviews and empirical literature. These sources are complemented by grounded field observations that empirically anchor the proposed concept. Grounded in African-centred development theory and institutional perspectives, it develops an analytical framework that links informal entrepreneurship, digital innovation and ecosystem dynamics. Findings: Findings highlight the dual nature of digital entrepreneurship: while it enables market access, flexibility and micro-innovation, it often fails to secure formal integration due to institutional voids. Nevertheless, emergent hybrid models rooted in community-based logic and digital adaptation offer promising alternatives for inclusive growth, particularly among youth and women. Research limitations/implications Limited availability of longitudinal empirical data across African regions constrains generalizability. Further fieldwork could refine the typology and test its transferability. Practical implications: Policymakers should embrace informality as a site of innovation and develop supportive infrastructure and financing mechanisms tailored to hybrid ventures. Social implications: Supports inclusive, culturally embedded entrepreneurship as a lever for structural transformation. Originality/value: This paper challenges dominant formalization narratives by introducing and empirically substantiating the concept of “transformative informality”, rooted in local realities and digital agency. It contributes a typology that connects grassroots digital innovation with entrepreneurial ecosystem dynamics.