background insofar as it contributes to setting up your problem, but do construct a narrative from a situation leading to your problem. Don’t worry about providing sources for your claims at this point, but do explain your premises such that an outside observer can understand how you have arrived at your problem (>500 words).
You should address four questions in your statement, each in their own paragraph:
What is the relevant context of the situation or condition you are interrogating? (Avoid excessive background – give just enough orientation for your reader to be able to see the problem.)
What is the problem that you are addressing? How is it delimited (i.e. what are its boundaries)?
What are the consequences of the problem? What is at stake (financial, personal, efficiency, etc.) in it not being solved?
What previous efforts (scholarly and/or real world) have been made to address the problem, and why are they insufficient?