In the Dreams favela, in the Brazilian city of Ferraz de Vasconcelos, Crislaine Fernandes da Silva strolls to work for her morning conference call. She works out of a shipping container that’s been repurposed into a logistics center for naPorta, a startup that provides last-mile delivery services for ecommerce companies, letting them access hard-to-reach places like the middle of the sprawling, low-income communities on the outskirts of Brazil’s major cities. Da Silva takes in the packages, sorts them, then dispatches them via local couriers to customers.

It’s a far cry from her last job as a cleaner earning 600 Brazilian reais ($124) a month—half the national minimum wage—for a 12-hour day, leaving the house before dawn and walking the unpaved streets by an open sewer. The work was often dehumanizing. “In roles like cleaning, you are assigned a post, and then you are forgotten,” she says. “I’ve always wanted better things for myself but didn’t know how to get there. Now, I learn new things daily and finally feel like I am a part of something."

Da Silva’s trajectory illustrates the paradox of favelas, which grapple with challenges ranging from a lack of essential infrastructure and environmental risks to rampant unemployment. On the one hand, these communities are a testament to the failure of the state to provide basic services and formulate economic policies to lift millions of people out of a state of extreme vulnerability. On the other hand, they are centers of economic activity: According to a study carried out by research firm Data Favela, revenue generated in shantytowns exceeded 200 billion Brazilian reais ($41.5 billion) in 2022, up 8.6 percent on the prior year.

But connecting the need with the opportunity has often been difficult. Da Silva got her role at naPorta thanks to an initiative by the nonprofit organization Gerando Falcões, called Favela 3D, which is trying to use technology to open up markets and create opportunities for people within the favelas.

Favela 3D—the three Ds stand for dignify, digitize, and develop—was created by Edu Lyra, a social entrepreneur who grew up in poverty in Guarulhos, a city near to São Paulo. Lyra recalls sleeping on dirt floors next to rats, surviving flooding, and visiting his father in jail. Inspired by his mother's conviction that "it's not where you come from but where you're going that counts," Lyra wrote a book about youth-led transformative initiatives and used the proceeds to establish Gerando Falcões in 2013. Created two years ago, Favela 3D is Gerando Falcões' flagship project.

Lyra says his approach is based on the radical idea that favelados (favela residents) should get a say in what they need, rather than being prescribed solutions from above. "We can ensure dignity to millions of favelados who don't want handouts for their entire lives,” he says. “Citizens must be at the center of decisionmaking.”

Government projects aimed at tackling poverty in Brazil don’t typically involve low-income communities, a fact acknowledged by the governor of São Paulo, Tarcísio de Freitas, at an event in the Dreams favela in July. "We don't know how to solve [the issues faced by favelas] nor have any idea of where to start", de Freitas said. "The relationship between the state [and citizens] has to change to improve the lives of people in favelas and the homeless. The state doesn't know how to listen.”

However, the reality of the favelas speaks loudly. Driven by the increase in the cost of living and unemployment, Brazil saw a 40 percent increase in the population living in shantytowns, to 16 million in the past 12 years, according to the 2022 census. This is compounded by an unprecedented surge in the percentage of people living in extreme poverty by 48.2 percent between 2020 and 2021, according to the Brazilian Institute of Geography and Statistics (IBGE).

These are the kinds of structural problems that can’t be solved by technology alone, according to David Nemer, a University of Virginia professor and anthropologist who has studied technology in favelas. “The Favela 3D project is innovative because it has a holistic vision,” Nemer says. It’s not “pushing an agenda of tech solutionism,” but building infrastructure and services, and then laying tech on top.

The digital piece of the 3D plan starts with affordable, reliable internet access, which favelas often lack. Operators don’t want to invest in the infrastructure to connect fixed lines, and mobile data plans are expensive for people earning very little.

Gerando Falcões worked with broadband internet firm VIP Telecom, technology integrator FiberX, and Huawei to connect the favela in Ferraz de Vasconcelos using 15 Wi-Fi units placed in strategic locations within the community. The signal is distributed by routers that can reach speeds of up to 9.6 gigabits per second.

Connectivity isn’t enough on its own to bring people into the digital economy. For example, favela homes often lack a number or a postcode, and their locations can be unsafe or hard to reach, meaning favela deliveries are frowned on by most traditional logistics firms. That means favela dwellers usually rely on friends or family living in conventional housing to receive online purchases. According to data from research firm Instituto Locomotiva, 70 percent of favela residents give up on buying online because of barriers to delivery.

As a solution to this structural problem, Gerando Falcões partnered with Google and naPorta to create digital addresses that are open source, free, and integrated with Google Maps. To locate addresses using “plus codes,” the technology converts latitude and longitude coordinates from GPS into alphanumeric codes, which are placed in front of every residence.

Under the Favela 3D project, ecommerce orders are directed to a container in the favela itself. Operated by naPorta, the hub coordinated by da Silva, items are delivered by local couriers to residents by bicycle. The organizations engage with ecommerce firms and retailers to create campaigns aimed at encouraging online consumption in the favela.

However, Nemer suggests that connecting the favela to ecommerce may not necessarily equate to empowerment. "If we are getting [favela residents] to buy from well-established companies with no commitment to the territory, we are taking resources away from their communities. It means we're focusing on social development through consumerism, which is problematic because it doesn't necessarily signify progress or inclusion," he says.

Other tech firms have come to the Dreams slum as part of the Favela 3D project. Coletando, a fintech company that makes digital payments to people in return for recyclable materials, has set up in the area. Fleury, a health care company, has established a telemedicine facility.

The technological components in the Favela 3D plan speak to a broader question of who has the right to access the fundamental aspects of the digital economy. "The internet as we understand it was not designed for marginalized areas like the favelas,” Nemer says. “When seemingly simple and basic technologies are rolled out in those communities, they become tools for transformation and resistance.”

The 3D project is trying to give residents access to tech education, vocational training, and entrepreneurship, as well as more traditional development projects, like building housing, sanitation, and public spaces. Lyra has worked with organizations like the Spanish nonprofit Teto to build homes out of recycled toothpaste tubes, and lobbied the local water company to serve the area. The locals recently renamed the favela from Boca do Sapo (“frog's mouth”) to Favela dos Sonhos (“dreams favela” in Brazilian Portuguese).

“That old name referred to several aspects of the place we live in that we were ashamed of. We couldn't even get an Uber ride home as drivers wouldn't take us", said Joelma Campos, also a former cleaner and now leader at Decolar, a nonprofit created by Gerando Falcões to lead the Favela 3D project.

The changes introduced by the initiative may impact some people significantly, but the next steps as the project scales are what truly matter, says Adla Viana, an anthropologist specializing in technology and innovation and founder of AI startup TechViz.

"Favela 3D is a project that enhances individuals' ability to resist, control their own narratives, and envision a horizon of possibilities. However, we must ask: What happens after opportunities open up for individuals like [da Silva, the logistics operator]? Will they create their own startups? How will their careers evolve in the coming years, and how [might] those successes be replicated?" she says.

The Dreams favela is just a prototype. So far, Lyra has secured the commitment from the São Paulo state to roll out the project at nine medium-size favelas. His hope is that other states feel compelled to replicate the model. However, with 11,000 shantytowns countrywide, there is still a long way ahead before the entrepreneur gets closer to his utopia of “turning favelas into museum items before Elon Musk colonizes Mars.”