It has been propagated by scholars and practitioners that entrepreneurship and innovation are potent tools that can be harnessed to transform rural areas, grow rural economies, create jobs, and enhance the prospects of attaining sustainable development goals (SDGs). Subsequently, these disciplines have garnered attention from researchers for virtually a century. Nonetheless, these researchers often focused on entrepreneurship and innovation activities in urban areas, thereby neglecting entrepreneurship and innovation activities in rural areas. Thus, there is a paucity of literature on rural entrepreneurship and innovation in the BRICS economies. Within the context of the agency theory and the Triple Helix Model of industrial policy, this study systematically reviews the literature on rural entrepreneurship and innovation in the Republic of South Africa. The study revealed that rural firms are risk-averse, which challenges the doctrine of rural transformation through rural entrepreneurship and innovation. Moreover, the ability to engage in entrepreneurship and innovation by rural firms is highly dependent on the availability of support from the government and actor networks. Subsequently, rural firms fail when support has been phased out. Thus, the government and actor networks should do things differently, with an emphasis on teaching rural firms to be independent and sustainable entrepreneurs and innovators.

The literature revealed that 70–80% of South African small businesses, including informal micro-enterprises, fail in the first year of their existence. Innovation has been recognized as a catalyst that can enhance informal micro-enterprises’ probabilities to survive and transform them from survivalists to sustainable businesses that grow the economy and create jobs. As far as it can be reasonably determined, there has not been a systematic review of the literature on innovation activities of informal micro-enterprises in the Gauteng province, South Africa. This study aims to present a systematic review of the literature, as well as research gaps identified in the literature, and future research opportunities. This paper thus systematically reviews the literature on innovation activities of informal micro-enterprises in the Gauteng province. The study revealed that the innovation capacity of informal micro-enterprises is severely hampered by innovation tradition and social tax. Subsequently, informal micro-enterprises engage less in innovation activity and those that do innovate often engage in incremental rather than radical innovation. Radical innovations are more crucial than incremental innovations. Thus, there is a need for researchers and government organizations to establish initiatives that can aid the informal micro-enterprises to engage more in radical innovation.

Innovation has been discerned as a catalyst that enables firms to remain relevant and sustainable. In recent years, the innovation discipline has been extended to the informal sector. Nonetheless, to date little is known about the process that is followed by informal micro-enterprises to execute innovation activity in each innovation phase. Thus, this study sought to establish an understanding of the process that is followed by informal micro-enterprises to execute innovation activity in each innovation phase. The study adopted a mixed-methods research design to sequentially collect and analyze quantitative and qualitative data from informal micro-enterprises that are based in the townships of the Gauteng province. The study revealed that credible customer assemblies are used to acquire knowledge and information necessary to execute innovation activity and to test innovations before they are launched in the market. Moreover, while informal micro-enterprises mostly use internal resources to transform innovative ideas into innovations, coopetition relationships aid to foster open innovation and limit the strain on internal resources. The findings suggest that informal micro-enterprises innovate differently from formal small businesses and there is a need for researchers and the government to introduce policies and initiatives to enhance open innovation in the informal sector.