Learning from Informal Urban Economies

If necessity is the mother of invention, then the residents of squatter cities will have much to teach us about resourcefulness and innovation

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Throughout his career, Stewart Brand—editor, author, lecturer, and futurist—has focused on such subjects as digital media, education, and architecture. He's perhaps best known for founding the Whole Earth Catalog in 1968, and the WELL, an early precursor of MySpace, in 1984, among other pursuits.

Today, he splits his time between serving as president for the Long Now Foundation, a private organization that promotes long-term thinking (as in 10,000 years into the future) and responsibility, and working for Global Business Network (GBN), a scenario consultancy. (He co-founded both.) He has increasingly been analyzing how the world's squatter cities are serving as centers of entrepreneurship and innovative design.


In a way, it's a fitting follow-up to the eight years of research that culminated in Brand's 1994 book, How Buildings Learn. That volume addressed how structures changed and evolved over time. Brand's newest research on urban squatter communities can be seen as addressing, at least in part, the question: "How do cities learn?"

Brand has been presenting his research on squatter cities at conferences and to corporate and institutional audiences around the world, as part of a talk with a larger context. Called City Planet, the talk examines how urban areas are environmentally friendly, provide economic opportunities for poor women in developing nations, and are simply growing at a dizzying pace.

BusinessWeek.com's Reena Jana recently spoke with Brand about the past, present, and future of squatter cities, both within the U.S. and around the globe. They also discussed how big business, designers, and architects might tap into squatter cities for both inspiration and to help their residents improve their quality of life through innovative (and potentially profitable) goods and services. An edited excerpt of their conversation follows:

What's a striking example of innovative design growing out of a squatter community?

The squatter community that I live in, a houseboat community in Sausalito (Calif.) is a good example. It started in the 1960s and now there are 400 houseboats. Like all great squatter cities, it became gentrified, and was made part of the town [San Francisco]. It's the classic case of pairing enormous resourcefulness and minimal resources.

Are there examples from the developing world that are particularly intriguing models of architectural innovation?

I think so. I was just reading a book about Bombay before it was Mumbai. There was a story about a company building towers 35 stories high. The construction workers were given rudimentary materials—lumber and rope and fabric and sheet metal—to construct cheap temporary housing near the site.

This instant legal slum would be their home for the duration of the project. What was astonishing was that the workers actually occupied the building itself as they worked on it and encamped there, where there was shelter. It was a highly economical way to build. Perhaps soon we'll be looking to squatter cities for design ideas, much as we looked to biology. Rather than bio-mimicry, we'll be considering squatter-mimicry.

In developing nations, squatters often occupy "uninhabitable" areas with no legal electricity or water supplies. Could their homes be considered as models for disaster relief housing?

It really depends on the time people need to be in a refugee community. If it's only a week, temporary tents are fine. But if more than that, well, we could look to squatter cities.

A lot of problems with disaster relief are linked to delays in the relief pipeline, as we saw after Hurricane Katrina. We could look at some of the materials used successfully by squatters in difficult climates or environments. Perhaps if applied to the United States, these materials could be donated from businesses that have been flooded, such as hardware stores, in the area suffering from the disaster itself.

You've mentioned in the past that big business could try meeting the informal economy of squatter cities "halfway." Why?

That actually stems from an idea of Robert Neuwirth, author ofShadow Cities: A Billion Squatters, A New Urban World (Routledge, 2004). What's interesting is that nations have figured out that squatters simply aren't going away. They're realizing they have to be finessed rather than crushed. An interesting parallel is open-source culture. In the high-tech world, the street finds uses for things. The Internet is rife with things people are doing for free.

And then someone figures out how to make it commercial. Linux applications are a great example. There's so much innovation and creativity in free domain. And large numbers count. Events such as Burning Man produce a lot of creative things. Sometimes, when money isn't the most important thing and wowing peers is the main event, innovation occurs.

Squatters operate in the same way. Just getting by takes a lot of creativity. And now nations and businesses are seeing, perhaps thanks to the open-source movement, that everything that isn't a crime has an application.

Have you witnessed a business actually tapping into a squatter city and devising an innovative product or service as a result?

Yes. The AES Corporation, a leading power company, asked me to give a talk in Latin America. While I was there, I learned that squatter cities steal their power…there are illegal power chords siphoning electricity strung for miles. In Buenos Aires, stolen power is better than no power, but it has problems. It's dirty power because it's not regulated. It can be too strong and fry a fridge or a TV. The power is flaky. And dangerous. In Caracas, four people a month are killed stealing power.

So AES sent people into the field. They wanted to see how to convert thieves into customers. They realized there are consumers in squatter cities. And people were interested in getting clean power regularly. The problem was that squatters' incomes are burst-y: They have some weeks with no money coming in, or others when they suddenly have it.

So paying a bill monthly doesn't work. So AES came up with a token system, and squatters could use power meters fed by tokens. Folks can buy power tokens when they can. This system is now in progress. And squatters are now part of the formal economy in parts of Latin America.

For a look at some of the world's most populated and innovative squatter communities, click here for the slide show

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