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Schumpeter: A $300 idea that is priceless

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Applying the world’s business brains to housing the poor

FRIEDRICH ENGELS said in “The Condition of the Working Class in England”, in 1844, that the onward march of Manchester’s slums meant that the city’s Angel Meadow district might better be described as “Hell upon Earth”. Today, similar earthly infernos can be found all over the emerging world: from Brazil’s favelas to Africa’s shanties. In 2010 the United Nations calculated that there were about 827m people living in slums—almost as many people as were living on the planet in Engels’s time—and predicted that the number might double by 2030.

Last year Vijay Govindarajan, of Dartmouth College’s Tuck School of Business, along with Christian Sarkar, a marketing expert, issued a challenge in a Harvard Business Review blog: why not apply the world’s best business thinking to housing the poor? Why not replace the shacks that blight the lives of so many poor people, thrown together out of cardboard and mud, and prone to collapsing or catching fire, with more durable structures? They laid down a few simple guidelines. The houses should be built of mass-produced materials tough enough to protect their inhabitants from a hostile world. They should be equipped with the basics of civilised life, including water filters and solar panels. They should be “improvable”, so that families can adapt them to their needs. And they should cost no more than $300. ...

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