One billion dollars of product is produced each year by the informal economy of the Dharavi slum in India. Many have called it a “money-minting” economy.
How is that possible in a squalid, seemingly uninhabitable slum?
The facts behind this entrepreneurial capitalistic incubator are fascinating. Take note MBA Wall Street analysts, Ivy League economists, and policy makers: you might learn something.
In one square mile, one million people live and work on what was once a mangrove swamp island, now known as the Dharavi slum of Mumbai, India. It was founded in 1884 during the British colonial era. It is one of the most densely populated areas of the world.
As you can imagine, the living conditions are brutal. There is severely inadequate sanitation (one toilet for every 2,000 people), lack of clean water, power outages, disease, limited access to health care, and worker safety concerns, to name a few. People are living on top of one another, sometimes literally. On average, 10 to 12 live in a house 10 feet by 10 feet. Dwellings are made from corrugated iron, plastic sheeting, wood, cardboard, and metal from oil drums. The annual income is between $500 and $2000. It is estimated that there are 5,000 businesses and 15,000 single-room factories which are launched with literally a few dollars of seed money and certainly with no formal business school education. The main business entities are textiles, recycling, pottery, leather tanning and finishing, metal work, and snack making. Their products are internationally exported to the Middle East, Europe, and the United States.
There are several factors that contribute to this amazing business success in Dharavi. Community is an indispensable part of the work culture. The highly diverse, multi-ethnic, multi-religious people in this slum have created a sense of community which is unmatched around the world. The slum residents sincerely look out for each other and take care of one another, despite their differences. The environment is friendly and hospitable, and some have called it a vibrant cultural mosaic. There is a 69% literacy rate, and they are committed to educating their children. The informal economy provides jobs for everyone. A shared moral code results in a crime rate below 1%. Dharavi displays the power of working citizens contributing to society by caring for one’s neighbor.
These businesses and factories are neither taxed nor regulated by any form of government oversight. Informal economies provide life-saving income for the poor globally, and this is the case in thriving Dharavi. There is, of course, a downside to the lack of monitoring of worker abuse and safety concerns, which are present in the slum and left unchecked.
Amongst all the factors delivering a bustling economy in this slum, the most fascinating is the work ethic and resiliency of the workers. Hard work and long hours describe the calling and commitment to work by these people. Dharavi workers are committed to a six-day, 12-to-15-hour work schedule to support their families. With few basic amenities, the workers press on to make their business ventures successful.
The circumstances are bleak, but resourcefulness and innovation are displayed by profiting from available things most would dismiss, like trash, disposables, and waste. An example of this ingenuity is the circular economy recycling businesses, which employ 12,000 slum residents. The workers collect used plastic of all types scattered about the slum. This reclaimed plastic is then ground up, melted, reshaped, and molded into new products.
The entrepreneurial spirit is alive and well in Dharavi. The creativity, drive, and industriousness of the people is something to truly respect and behold. Overcoming the daily living challenges, which for most people would be debilitating, illustrates great determination and a dedication to this spirit.
Business collaboration is also a hallmark of this enterprise. Many workers and businesses support and play off each other. Skill exchange and basic educational resources are mutually shared for everyone’s benefit.
The residents of Dharavi have turned adversity into opportunity.
Are there substantial issues in the slum that need immediate attention? Absolutely. But the people of Dharavi need to be recognized and commended for their entrepreneurial vision, spirit of resilience, unrivaled work ethic, and their commitment to put differences aside and care for one another.
Don’t miss the message of the Dharavi slum.