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    2016 HULT PRIZE CHALLENGE: CROWDED URBAN SPACESCan we build sustainable, scalable and fast-growingsocial enterprises that double the income of 10 millionpeople residing in crowded urban spaces by betterconnecting people, goods, services, and capital?

    With Special Call to Action from President Bill ClintonDRAFT V2.1

    Hult International Business School Publishing 2015

    2016

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    Almost 1.5 billion people living in crowded spaces are struggling

    Urbanization is continuing to drive people all over the worldinto crowded spaces

    Limited income damages individual prosperityand broader economic productivity

    Governments and NGOs are unable to increase income for the urban poor

    Social enterprises may be the best option to address this issue

    However, building successful social enterprisesin crowded spaces will be difcult

    Can we build sustainable, scalable, and fast-growing social enterprises that

    double the income of 10 million people living in crowded spaces by 2022through better connecting people, goods, services and capital?

    Addendum:

    TABLE OF

    CONTENTS

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    Crowded spaces are difcult. As ruralpopulations around the world migrate to city

    centers in pursuit of a better life, they oftenadd strain and hardship to both themselves

    and the spaces they occupy.

    Simultaneously, city borders continue to expand, creatingmega cities across the developed and emerging markets.War and displacement have led to the largest global refugeebase of all time. This mega workforce however is sidelinedand pulling the global economy down even though many areeducated and have the skills, training and physical ability toproduce economic output.

    Poverty camps exist in all places of the world. Social welfaredictates where the poor live, what schools children mustattend, and what types of services are available. Lackof education and economic opportunity has created adownward cycle of poverty which is difcult to break.

    The interviews collected below by Meera Bapat and Indu Agarwal give an inside perspective on what life is really likein crowded urban spaces. These interviews were funded byDANIDA, the Danish Government’s bilateral aid agency.

    When we came here in 1972, we did not know where to fetch water. Weused to go to a hotel (restaurant) to have a cup of tea and bring a can ofwater from there. After we settled down on a pavement we bought anold 5-litre can for 25 paise(3) and lled it in the morning. We used to askaround where a tap was working and we used to collect water there. Ifthat did not work we used to go to the JJ hospital morgue, bathe thereand ll our water containers. After we put up plastic sheet roong onthe pavement we used to go to Kamathipura nearby to collect waterat the tap in the 14th lane. There, the people used to refuse to give uswater saying ‘…they have brought toilet cans!’ We did not understandwhat they meant. Then a woman told me that it was because of the potsthat we carried to collect water. Then I bought a plastic bucket. If wedid not get water in the 14th lane we tried to get it in other lanes. Weused to go in search of water at 3:30 in the morning and collect threeor four handaas (an urn that can hold 10–12 litres of water) by seveno’clock. If we did not get water we used to buy well water. Even now wesometimes have to buy well water for ve rupees per handaa. We buy

    four or ve handaas per day, just for cooking.Local elections took place two months back. Our only demand waswater – whoever gave us water would get our votes. We made ten boysour spokesmen. The one with a bow and arrow (the symbol representingthe political party Shiv Sena) gave us two taps before the elections. Nowwe have water. Those who had money spent 1,500 rupees or so extraand got individual taps inside their shacks. I also got one. We have xeda rate of 20 or 15 rupees every month per family. These are unofcialtaps. We cannot get taps ofcially. We have lled in forms so manytimes but the municipality throws them away. There is no provision forgiving water taps to pavement dwellers.

    To avoid ghts over water in our area, three boys organize everything.Yashawant Jadhav gave 150 taps in all but each area got one or two.Sophia Zubair Road (pavement settlement) has one, Dimtimkar hastwo, Peer Khan has ve or six. There was a big ght at the tap on thecorner and people began to beat each other. The municipality person

    took away a hose pipe and a couple of handaas. The boys rushed toYashawant Jadhav who sorted out the problem. Since then the boyshave supervised things.

    We used to bathe and wash our clothes and vessels with water from thetextile mill. That was for free. Then the mill closed down and the waterstopped. That was a big problem. There was a water line passing underour houses. Two or three of us thought that we should steal the waterby tapping into the pipe. Plumber Patel and I did it rst ve years ago.The cost of a pipe and digging came to about 1,000 rupees.

    Water came in the morning from 4 until 7 o’clock. Alot of people cameto ll the water at the tap. There used to be a queue for water and weused to charge 20 rupees per month per person. In a few days, the costof installing the tap for stealing the water was recovered. By then, manyother families wanted to have their own taps. So there were six or sevenmore such taps and the municipality came to know about it. Theycame with the police. But we had come to know that the municipalitypeople were coming and everybody shut their taps and concealed theconnections with stones. After the men left we lled the water. We thenplaced a few people on the lookout for the inspector. After a few days,

    we made friends with a person from the municipality. We asked him toinstall a tap in our mosque and madarssa. He took about 600 rupeesfrom us and put in a tap. Now they come to disconnect our taps onceevery month or two. Still, there are always two or three taps left. Alsothe main tap is never disconnected. It is always there.

    SAGIRA, MUMBAI:

    Daily Life

    Inside a Slum

    REHMAT, MUMBAI:

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    I used to live in Indiranagar in Ghatkopar. Our rooms were demolishedbecause a road was built there. So we came here in 1985. Many otherpeople also came. When we came, there were only four or ve houses.It was desolate and quite scary. We lled up the swamp and built ourshacks. It cost us a lot of money to get several truckloadsof debris to reclaim the land. Last year, the municipal corporation lledup more area.

    In those days, we had to get water from Mankhurd station. We had towalk through the slush and mud. It used to take us an hour to walk backwith water pots on our heads. If we did not get water there, we used togo to other places like Bainganwadi and Shivajinagar. We had to fetchenough water for drinking and washing. The water here is saline. At hightide, the water level used to rise and our houses used to get submerged.This used to happen several times a year. Now that the whole area hasbeen reclaimed we do not have this problem. Five or seven years agowe got water taps. They were provided from the MLA (member of theLegislative Assembly – provincial assembly) funds.(4) But those tapsare dry. Because the pipeline passes through the marshy area, it isrusted. Some people have paid the money and have secured their ownwater supply. Some people go near the bridge to fetch water. It takesten minutes to walk there. MHADA(Maharashtra Housing and AreaDevelopment Authority) is doing some work there. Pipes have brokenand several people bring water from there. Even that water is notfree. There is always someone sitting there who charges one rupee for

    a handaa of water. Anyone can take charge of water and collect money.Even I can do that.

    I need 15 or 16 handaas of water every day. When we wash bed sheets,blankets etc., we need to buy water worth nearly 50 rupees. There aretimes when we do not get water for a couple of days in a row. Then weget it from Shivajinagar, Mohite Patilnagar or Shantinagar. It takes halfan hour to reach Shivajinagar. Shantinagar is even further. We have togo on the highway. Sometimes the water is dirty. It has a foul smell.There are always ghts for water, particularly if women try to jump thequeue. Then complaints are registered with the police. We have met ourcouncillor many times to ask him to get us more water. He promises tolook into our problem. So far he has done nothing. We also went on aprotest march to the municipality. But nothing has changed here.

    A toilet block is under construction at present. Until now, we have usedopen land for defecating – men go on one side and women on the other.People passing by can see women squatting. The day before yesterday,an old woman went out to defecate at seven in the evening and a man

    came from behind and grabbed her. A few of us generally go togetherfor the toilet. Men hide behind the bushes and watch women when theyare squatting. If they see a woman alone, they creep in and molest her.In the past, we met the councillor many times and told him about thecircumstances in Sathenagar. But for years nothing happened.

    I live in Jaibhavani Nagar on Parvati Hill. It is part of a very large slumarea. My shack is near the top of the hill. Until seven years ago, therewas no piped water supply anywhere in the settlement. There were justthree water taps near the toilets. We also used the water from the canalthat lies at the bottom of the hill.(7) A strip of land on both sidesof the canal belongs to the government (irrigation department). I used toget up in the morning and rst bring two handaas of water from the tapsnear the toilets. Sometimes, the toilets would get blocked and nobodydid anything to get them repaired. Filthy water used to collect near theurinals. And we had to ll the water in all that mess. There usedto be ies and insects ying all around. They would fall in the water.There are neither paved pathways in our settlement nor are thereproperly laid out drains. People have made trenches to carry off thewastewater. When my children were small, they used to follow me whenI went to fetch the water. Sometimes, they would fall into the trenches.So, half my attention was on my children. In addition to this worry wasthe anxiety to get to work on time.

    Men used to wash clothes near the taps and make us wait for a longtime before we could ll our handaas. Men bathing near the taps wouldsoap themselves and deliberately shake their heads vigorously so thatthe soap lather used to y all around and fall in the water as we lledour handaas. They used to say all kinds of vulgar things to us. It wasso humiliating! We would ask them to move aside and let us ll ourhandaas, but they never listened. In order to avoid having to face this, I

    used to go much further to another housing area to get water. After the elections, I thought we would get water taps. But nothinghappened. Politicians come to us when they canvass for elections andthen they disappear. Then Mahila Milan was started in our slum. Severalof us came together. We realized that we would have to try to get waterconnections ourselves. Before that we expected the local councillor todo everything for us. But he did not get us water. We met the municipalcommissioner. He was very helpful and understanding. After we lobbiedfor months and made repeated visits to the municipal ofces, pipeswere laid and taps tted, but they remained dry. After another wait andmore visits to the municipal ward ofce, we nally got water. Whenwe opened the stopcock and water came out with force, women andchildren were absolutely overjoyed. This was seven years ago. Over thelast year, however, we have had very little water in our area. It is difcultto get even a few handaas of water for drinking. To do our washing wehave to go all the way down to the canal. Going down the slippery slopeto the canal is quite hazardous.

    Our settlement extends for a few kilometres on the hill slope along thecanal. At the far end there are no water taps. Women ll water thatcomes out of the air valves tted on another canal that has been closedwith a concrete slab. They have to walk quite a distance to reach thepoints where the valves have been tted. Even though this water isnot treated, they have to use it for drinking also. Climbing up the steepslope from the canal to the pathway with two or three handaas ofwater balanced on the head and then up the hill to their shacks is quitea precarious task. Every morning and evening, you can see severalwomen and young girls going to fetch the water and returning withhandaas perched on their heads. There are no toilets in our settlement.We go up on the hill for defecating. Women go on one side and menon the other. We go at night under the cover of darkness. There are nolights up there. It is quite scary. When we go, we call out to others sothat three or four of us can go together. In the rainy season it is difcultto walk there

    I am the secretary of the Mahila Mandal (women’s group) in OmkarSociety. There are around 3,000 families that live in this settlement. Twoyears ago, groups of 10–15 families collected money and each groupgot a water connection. For the past six months, we have no water atall in these taps. We have complained to the municipal ofce, and theyhave promised to connect our taps to a different water line, but nothinghas been done so far. Now we buy water for drinking, washing, bathing,everything; we pay ten rupees or more for water every day. We buy it inBainganwadi or Shivajinagar and other such areas. It takes about half anhour to walk there and come back. Some people go there on bicyclesand bring four cans at a time. Those who do not have bicycles hire themfor two or three rupees or bring water in autorickshaws (three-wheelerhooded vehicles used as taxis). The people from whom we buy waterhave tapped water lines going into buildings there, and have put pumpsto draw water. Some have put hosepipes from there to here and sellwater to individual families at 100 rupees a month. There is no toilet inthis whole area. Men and women from the settlement squat along theroad. Women do not go after six in the morning.

    They wait for the cover of darkness. We even eat less so that we do notneed to relieve ourselves during the daytime because we do not haveproper toilets. Now some toilets are being built here. We tried to get our

    MLA(member of the provincial Legislative Assembly) and the localcoun- cillor to build toilets for us, but they said they did not have funds.We went to Apanalaya (an NGO) who told us to go to SPARC. And nowSPARC is building these toilets.”

    KHATRABAI LONDHE

    SHALINI SADASHIV MOHITE:

    JYOTI BHENDE:

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    MEGACITIES:

    SLUMS:

    REFUGEE CAMPS:

    CITY COUNTRY POPULATION(ESTIMATES)

    CAMP FLEEINGMOSTLY FROMPOPULATION(ESTIMATES)

    SLUM ADJACENT CITY POPULATION(ESTIMATES)

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    The Gaza Strip - is one of the most crowdedand least built-up urban environments in theworld today, with a population of 1.7m and

    density of almost ten thousand people persquare mile within a relatively at area.

    This is exacerbated by population growth rates and restrictionson the movement of goods, services, and people withinand across its borders, preventing the proper planning anddevelopment of a functioning city that provides accommodation,sanitation, health, education, and food to its residents.

    Rio De Janeiro has anestimated population 6.35million, making it the secondlargest city in Brazil, thirdlargest metro area in South

    America, and 6th largest inthe Americas.

    The city has a population density of12,380 people per square mile. Almost

    one in four people – 1.4 million in total– live in urban slums (up from 13% in1970’s). Although per capita incomehas doubled since 2000, many enteringthe labor markets are illiterate, makingit challenging for businesses and the

    government to provide employment.Between 2008 and 2009, there were14,057 entrepreneurial ventures in

    the Rochina and Maguinhos slumcommunities of Rio, but only 1,083(7%) operated in the formal sector. Theother 93% of ventures operated in theunregulated, informal economy.

    Local police, called Pacifying PoliceUnits (UPPs), have been brought into improve security in 28 of Rio’sslums. The results have led to a 75%decrease in the number of violentdeaths, a 15% increase in propertyprices between 2006 and 2011attributed to these units, and an

    increase in the revenues of businesslocated in the slum communities.These sorts of interventions attractdirect foreign investment and make thearea more enticing for entrepreneursand local businesses.

    • Restrictions on the movement of people (

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    In Columbus, Ohio, for example, simplycreating jobs has not led to a reductionin the poverty level. The region’sunemployment rate is about 5.9% andhas been falling for the last severalyears. However, despite more peoplebeing employed, the poverty rate hasnot changed or dropped below 18%.

    People living in the city and workingfull-time on a minimum wage job willearn about $15,000 per year. In orderto cover the costs of living in the city– from rent, to transportation, to food– it is estimated that a family with twoadults and one child in Columbus wouldneed almost $40,000 per year.

    The data shows that employment aloneis not the solution to lifting people out ofpoverty. Jobs that don’t cover the costof living are not an adequate solution.Poor quality, low-paying jobs are stillnot helping people pay for what theyneed. The real solution is to createopportunities to generate more andsufcient income to be able to affordthe cost of basic services.

    Solution’s to this year’s challenge ofcrowded urban environments, whetherfocused on the US or otherwise, mustfocus on enabling poor communitiesto better connect and create value inthe form of high enough incomes thatenable them to rise above the povertylevel wherever they reside.

    Higher Employment and HigherPoverty in

    Columbus, Ohio Poverty is not limited to thedeveloping world. Althoughthe average incomes arehigher in Europe and theUnited States, higher costsof living mean that incomemay still leave familieshomeless, struggling toafford food, or unable to payfor critical medical care.

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    Our hope is to empower 10 millioncrowded urban space dwellers to break

    the cycle of poverty through nding newand innovative ways to connect them withnot only the basic necessities of humanlife, but also with the opportunities whichenable them to take ownership of theirown destinies. These opportunities mayexist locally and are in need of scale ormay need to be conceived from scratchas micro-enterprise startups. One thingwe know is that solutions need to be boldand challenge previous decades of ideasand programs which don’t seem to beof the right size or scale, and have yet tounlock the ability to break poverty.

    Increasing incomes throughentrepreneurship is a viable supply-side tool to provide crowded urbanspace dwellers with access to alternate,

    Fairchild 8: The Economic

    Opportunity Cluster

    additional, or greater principal sourcesof income, allowing them to more

    rapidly scale out of poverty. Beyondthe individual entrepreneur and hisfamily, research has shown that asingle successful entity in one area caneffectively spawn an entire village ofentrepreneurs and startups.

    In fact, research conducted in 2014 byEndeavour shows that the some of thegreatest entrepreneurial ecosystemsof today were in fact started by onesuccessful company (or a few), whichthen served to launch a wave of startups.Whether examining Silicon Valley’sgrowth in relation to the original foundersof Fairchild Semiconductors, the“Traitorous 8” alone led to the spinoff of31 rms in just 12 years or the amazinginterconnectedness of the Buenos

    Aires Tech Sector, where a few keystartups lead to an entire ecosystem toemerge, the role of entrepreneurship andinnovation is fundamental. It only takesone idea to build a “valley” - to date, 92public companies, totaling over US$2.1Trillion in value can be tracked back toFairchild.

    The concept of economic opportunityclusters created around one or a fewsuccessful entities can be applied tocrowded urban spaes, turning a otherwisedepressed village into a work force thatdrives economic empowerment andinclusive economic growth engine.

    The Creation of Silicon ValleyFairchild founders spunoff 92 public companies in 58 years

    The Buenos Aires Tech Sector A few key startups lead to an entire ecosystem

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    MISSION PRINCIPLESENSURE SOCIAL ENTERPRISEEFFECTIVENESS

    FINANCES MUST BE EFFICIENT

    ASSETS MUST BE ABLE TOBEAR RISK

    SOLUTIONS NEED TO CONSIDERCULTURE AND GENDER BIASES

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    CONNECTING PEOPLE:

    CONNECTING GOODS:

    CONNECTING SERVICES:

    CONNECTING CAPITAL:

    Can we build sustainable, scalable,

    and fast-growing social enterprises thatdouble the income of 10 millionpeople living in crowded spaces by2022 by better connecting people,goods, services, and capital?

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    More Income

    Better Outcomes

    More Empowering

    Better Connectivity

    Guiding Questions

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    BUILD ENTERPRISESWITH LOCAL PARTS ANDKNOWLEDGE

    CONNECT PEOPLE,GOODS, SERVICES, ANDCAPITAL

    DEVELOP STRONGCHANNELS

    UNDERSTAND YOURCONSUMERS

    CREATE VALUE

    Addendum:

    Building successful social enterprisesCompanies who are able to think broadly and holistically aboutthe entire business innovation value chain are more likely to beable to capture and create value. Social enterprises developedfor the Hult Prize, like Aspire Food Group, Nanohealth, andIMPCT.co, have worked across these segments to design and

    spaces. They are working on the ground, today, to produce at

    and networks to capture new value in new ways.

    do the same?

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    The examples on the following two pages should serveas a guide to 3 potential avenues:

    a) establishing a micro-franchise through industry creation (Aspire),b) empowering every day dwellers to become income

    generators (NanoHealth) , andc) scaling and training existing entrepreneurs (IMPCT).

    Almost 1 billion people worldwide lackfood security. They struggle to provideenough safe and nutritious food to theirfamilies. Every day, they work hardto pull together the best meals theycan, but over time, malnutrition has asignicant effect on quality of life andhealth. In addition, as people continueto move from rural to urban areas, theynd that they don’t have adequate skillsto nd work, and are pushed into slums.

    Aspire Food Group utilizes an innovative

    solution to create more nutritiousinsect-based food options, more thandouble income for small entrepreneurs,and create a more sustainable food

    value chain from beginning to end. Theytrain and empower entrepreneurs tobe able to farm their own insects, feedtheir families, and increase their income.

    Aspire empowers entrepreneurs andemploys thousands of individualswho would otherwise not have a

    job. Whether an injured retiree or anadolescent struggling to make endsmeet, Aspire provides both with morethan ten times the income by betterconnecting know-how, entrepreneurs,consumers, and nutritious food.

    Insects need ten times less feed thancattle to produce the same amount ofprotein and are thus a cost effective,

    nutritious option. The United Nationshas recognized Aspire as providing ‘aviable potential solution to the globalfood crisis’. Many residents of slums inGhana, for instance, a pilot location for

    Aspire Foods Group, suffer from severeiron deciencies (70% of pregnantwomen). 100 grams of Palm WeevilLarvae, a key product of the company,has ¼ the daily recommended intake ofIron.

    Aspire has spawned an entirely new

    industry poised to rapidly scale aroundthe world and have signicant impacton the lives of people living in urbanslums.

    Aspire Food Group:Creating Value by Sparking an Industryand Launching Micro-Franchises

    Value creation and greater incomegeneration in crowded urban spaces

    through better interconnectednessbetween capital, goods, services, andpeople can be achieved in many ways.

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    Millions of children in urban slums arecurrently sitting idle in unsafe informaldaycare centers run by existingentrepreneurs who have no training oradequate resources. Parents are willingto pay almost 20% of their monthlyincome to these informal daycaresin order to be able to work. In Latin

    America alone, there are an 200,000such informal daycares with on average4 kids each charging $2 / day – whichmeans that $1.6m are spent every dayon childcare services.

    By scaling up the quality and capacityof these informal structures, IMPCT

    hopes to enable more parents towork while their children receive highquality early education. By identifyingtalented existing entrepreneurs andproviding them with the capital (donors),know-how (Training), and curriculum(Montessori) to build and run asuccessful daycare with more students,IMPCT allows these young mostlyfemale entrepreneurs to double or tripletheir previous income, while betterconnecting children and parents to highquality, dependable, and safe daycareservices. On average, mothers earnbetween $80-120 per month with theirinformal daycares. Owning an IMPCT

    Playcare, on the other hand, pays asalary and prot share that averages$220 per month. IMPCT’s rst teacher

    Alma, for example, went from making$80 with her informal daycare to $300 inher rst month running her Playcare

    IMPCT has already reached morethan 9m people with hundreds ofmajor media appearances acrossthree continents. They have convinced50 companies representing 65,000employees to develop matchedinvestment programs on their platform,and engaged 750 donors from 45countries to build their rst playcare.

    IMPCT:Creating Value by Enabling Existing Entrepreneurs

    NanoHealth:Creating Value by

    Providing Sufcient Income

    More than half of patients with diabetesand hypertension in the urban slumsof India remain undiagnosed, as thereis no population level mass screeningprogram, doctors and hospitals areoften located hours away from thepatient (full day or more just to visitcreates nancial disincentive), and slumdwellers don’t have the nancial meansto afford the doctor’s visit. This leadsto under-diagnosis, poor treatment,and poor prescription compliance,which, in turn, mean greater aggravationof the disease and eventually pre-mature death.

    NanoHealth addresses this problemby offering a cost-effective and scalablemodel to tackle the growing burdenof chronic diseases in urban slumlocations across the world. TheirDoc-in-a-Bag™ product allows therapid and accurate diagnosis of diseaseto take place on-site and cheaply, thuspreventing the patient from having tovisit the doctor at all unless diagnosed. Patients no longer have to make thedifcult choice between taking a dayor more off of work, or paying expensivedoctor’s fees, and improving theirhealth.

    NanoHealth is able to achieve the aboveby creating, employing, and training anetwork of community health workerscalled “Saathis”, and providing themwith a low cost point-of-care device.These Saathis form a strong network ofcommunity health workers, extendingthe reach of the health system rightto the patient’s doorstep. In addition,Nanohealth is able to double andsometimes triple their employees’incomes; many of these ‘Saathis’ werepreviously untrained and uneducatedcommunity members with access onlyto the lowest paying jobs. With thecombination of the right care model,scalable technology, and impact-centered approach, NanoHealth aims toprevent one million pre-mature deathsevery year while signicantly increasingincomes in the areas they operate in.

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    PROFESSOR ROB ANTHONY

    AHMAD ASHKAR

    KARIM SAMRA

    KRISTEN TYRRELL

    ACKNOWLEDGEMENTS

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    Garland, A. (2007). Global urban poverty: Setting the agenda (p. 2). Washington, D.C.: Woodrow Wilson International Center forScholars. Garland, A. (2007). Global urban poverty: Setting the agenda (p. 210). Washington, D.C.: Woodrow Wilson International Centerfor Scholars.

    Andersen, V., Austin, S., Doucette, J., Drazkowski, A., & Wood, S. (2015). Addressing Income Volatility of Low Income http://www.lafollette.wisc.edu/images/publications/workshops/2015-income.pdf

    Hammond, A., Kramer, W., Katz, R., Tran, J., & Walker, C. (2007). The Next 4 Billion: Market Size and Business Strategy at theBase of the Pyramid. 1-1. Henderson, J. (2015, August 26). [Telephone interview]. Hosmer-Henner, J. (2015, September 23). [Telephone interview]. Facing the slum challenge: Global report on human settlements, 2003 (p. 195). (2003). London: Earthscan Publications. About energy access. (n.d.). Retrieved September 24, 2015, from http://www.iea.org/topics/energypoverty/ Arimah, B. (2011). SLUMS AS EXPRESSIONS OF SOCIAL EXCLUSION: EXPLAINING THE PREVALENCE OF SLUMS IN

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