on CNBCAfrica.

In the developing world, 85 percent of new jobs are in the informal economy, according to the U.N. — that’s the economy that’s off the grid, that probably isn’t paying taxes and that is thriving in African slums.

With a huge diversity and density of cultures and people, African slums are producing a type of innovation that goes beyond people just eking out a living, says Fernando de Sousa, general manager of Microsoft Africa Initiative. They’re becoming economic powerhouses, de Sousa said in a CNBCAfrica interview.

Most of Africa has an issue with power grid and Internet access and broadband — it’s not economically viable to take these networks into less densely populated areas. “A slum is the inverse of this,” de Sousa said. “It’s the one place where, with a single tower of mobile network you can cover a vast network of people. Its the ideal place to drive the knowledge economy, the digital economy, the mobile economy, by leveraging mobile technology and employment that revolves round a services industry. You don’t need an office to be in a cloud. You can participate in the economy.”

Scientists and the companies that hire them are looking at slum populations as massive markets for new products, exploring innovative solutions to improve flood and fire safety in the homes of South Africa’s poorest people. In this AFP video, products are promoted for building better shacks.

Because slums are so compact, and the pressures of living there so extreme, innovation becomes almost the daily manner of behavior, according to de Sousa in the CNBCAfrica report. “Slums are the most innovative places on Earth…we see innovation in how people think but more importantly in how they look for economic inclusion.”

Slum dwellers are taking technology and adapting it to drive that innovation, de Sousa said. “It’s a fascinating change to our social fabric in which I think both economics and technology have a role to play.”

De Sousa talks about the micro-slice economy as a massively innovative business model in slums. For example, transportation is a problem in slums, he told CNBCAfrica. Moving around is a problem. So someone who’s not going anywhere has something of value, and can make a living, perhaps, looking after houses. People can be paid do work at a micro level.

How can slum technology be put to use? There are large numbers of people in a relatively small area available for a potential employer, de Sousa said on CNBCAfrica. “Your target audience is right there,” he said. “Economically and from a cost perspective it’s so much easier to reach them.”

How can we use technology to understand who is in a given location? This is one of the fantastic opportunities for African innovators, de Sousa said. “We need to think beyond the traditional city planning and town management structures of the past. A slum is a physical manifestation of a social network. Everyone is connected, sometimes by sheer proximity. How does this ecosystem become governed and demographically managed through technology, through a virtual understanding of this world rather than physically trying to map out roads and street addresses?”

Road maps and street addresses may still be important in the developed world, but they are tools of the previous century, de Sousa said. “I think we understand we need to move forward,” he said.