Defining the informal sector (UN-Habitat)

"The informal sector consists of units engaged in the production of goods or services with the following characteristics:

• Small-scale units, comprising, firstly, ‘informal, ownaccount enterprises – that is, those unincorporated enterprises that are run without regular employees (but perhaps with unpaid family workers or occasional hired labour)’; and, secondly, enterprises of informal employers who employ one or more persons on a continuous basis.
• Few barriers to entry: initial capital and skill requirements are low.
• Informal skills acquisition: most entrepreneurs learn through informal apprenticeships in the sector, while a few have received vocational training.
• Limited access to formal credit: capital needs are met informally from family, friends, money lenders and other business interests.
• An informal internal organization with a relatively flexible and informal hierarchy of work and roles: often the own account or self-employed worker is worker, manager and owner, all at once. They display little or no division between labour and capital as factors of production.
• Informal relationships with suppliers, clients and the state: few have licences or formal contracts, their hours of operation are flexible and contacts are irregular. They therefore tend to be ‘invisible’, unregulated and uncounted by official statistics, particularly by economic censuses. Thus, the entrepreneur avoids taxes, licence fees and requirements to conform to standards. Labour tends to be unprotected. Labour relations – where they exist – are based primarily on casual employment, kinship or personal and social relations, rather than on contractual arrangements with formal guarantees.
• Combinations of different activities can exist in a single unit: these can exist simultaneously or by frequent change in activities, so it can be difficult to classify the business according to the standard industrial classification. Products may be made and sold in the same place and other producers’ products may also be sold.
• Predominance of an undercapitalized or labourintensive process of production: the limited nature of the technology being used may hamper the ability of business to produce continuously and may limit the operator’s ability to plan for investment and improved operation.
• Consumption and production are not separated: part of what allows informal-sector businesses to keep operating is their use of personal and domestic assets, such as living quarters, vehicles and furniture. Furthermore, business expenditures, income, assets and labour are almost seamlessly linked to those of the household. This can be a problem for policymakers who like to separate consumption and production as different spheres for statistical and taxation purposes."

UN-Habitat (2003) The challenge of slums - Global report on human settlements. London & Sterling: UN-HABITAT - Earthscan. pp 100-101.

Kids in India Are Sparking Urban Planning Changes by Mapping Slums (S. Sturgis)

"As part of a broader civic campaign centered on "child clubs," groups of children are creating detailed "social maps" of their marginalized neighborhoods to voice their concerns about public space, as first reported in Citiscope, a CityLab partner site. [...] 

Teams of young mappers and adult facilitators spend roughly 45 days traversing their slums. They learn the shape of their neighborhood, how streets interconnect (or don't), and the the density of homes there. This information becomes the map's skeleton. Then, they fill in the specifics. They stake out what's needed through the eyes of children—where underserved public areas could become play spaces, where trash bins could be added in an area they regularly see littered with filth. Their ideal neighborhood is drawn and detailed onto the map. Then, after it's complete, leaders from the child clubs present their work to local officials.

[...] Human activism, on the other hand, is a better indication of reality. Regardless of whether these child maps lead to more equitable urban development or not, it's indicative of a young Indian generation coming to the fore with a keen awareness of disparity—who are eager to correct it."

Read the article here.

Slum Upgrading

"Slum upgrading is a process through which informal areas are gradually improved, formalised and incorporated into the city itself, through extending land, services and citizenship to slum dwellers.It involves providing slum dwellers with the economic, social, institutional and community services available to other citizens. These services include legal (land tenure), physical (infrastructure), social (crime or education, for example) or economic.

Slum upgrading is not simply about water or drainage or housing. It is about putting into motion the economic, social, institutional and community activities that are needed to turn around downward trends in an area. These activities should be undertaken cooperatively among all parties involved—residents, community groups, businesses as well as local and national authorities if applicable.

The activities tend to include the provision of basic services such as housing, streets, footpaths, drainage, clean water, sanitation, and sewage disposal. Often, access to education and health care are also part of upgrading.

In addition to basic services, one of the key elements of slum upgrading is legalising or regularising properties and bringing secure land tenure to residents.

Ultimately, upgrading efforts aim to create a dynamic in the community where there is a sense of ownership, entitlement and inward investment in the area."

Cities Alliance

Read all about slum upgrading here.

The Future Of Slums: On The Line Between Hope & Despair

Cities Alliance

"The future of slums can be projected in two entirely different variants: slums of hope, and slums of despair. Based on the prevalent trends, despite some successes which could be termed as ‘best practices’ in formulating slum policies, slums have continued growing in the urban regions of the developing world."

"The need of the hour is to focus on a more comprehensive approach that will integrate factors of emergence and growth of slums and at the same time cooperate with different stakeholders responsible for addressing slum problem. The most striking outcome of past and existing slum policies and strategies are their short sightedness with respect to housing needs in urban regions."

"Governments need a paradigm shift in attitude by looking at the poor settlements not as part of the problem but as part of the solution and look at the poor not as beneficiaries but primary actors of their own development, key tenets of slum upgrading and enabling approaches."

Read the entire article at Urban Times.

Lessons to be taken from slums

Favela Rocinha, Rio de Janeiro
(upload.wikimedia.org)

"I realised that the formal city couldn't survive without the informal city … in the slums I discovered a whole new social geography … I began rethinking my whole profession, unlearning what I had learned, and then re-focused on adaptation and reuse and using scarcity as a resource." (Brillembourg)

[...]

This notion is that the slum at its best – or at least at a conceptual level – is a Wiki city. There are no rules other than the resources available and the collective agreements among residents. "An interest that the profession has had for a few years, and it is shared by the public, is that cities don't need to be so planned," says Zaera-Polo. "That cities can be more varied … this raises interest in the idea of cities that are almost self-built: the Wiki house, and the crowd sourcing of design." [...]

"What is probably most fascinating about going to [slums] is that you see the public realm emerging from the bottom-up, you experience it literally," says Zaera-Polo. "As opposed to those of us who have been lucky and born into wealthy economies where it was already there. To see the favelas and slums in South America gives you an incredible insight into how the public realm emerges out of a group of individuals. I think this is something that advanced economies need to look at now."

Read the complete article at The Guardian.