How socially responsible outsourcing drives global development

By Catherine Cheney 14 October 2015

A young man works in a call center in India. Can outsourcing be a powerful force for poverty eradication? Photo by: Benoit Marquet / International Labor Organization / CC BY-NC-ND

You won’t hear a lot of support for “socially responsible outsourcing” on the U.S. presidential campaign trail, but it could be a major force in global poverty reduction.

Companies in California’s tech-friendly Bay Area need people who can do digital work. That demand has given rise to more organizations using technology to connect people in developing countries with employment opportunities. In “socially responsible outsourcing,” some see an opportunity for the private sector to help direct a $300 billion outsourcing industry toward global poverty reduction goals.

“This is the future of work,” said Radha Basu, the founder of iMerit, a computing company that does what it calls “global smartsourcing” to transform lives through digital work. By training and employing rural youth and women, iMerit aims to fill a void in the $100 billion Indian information technology industry. “Some of the most important skills today are in social media and mobile and analytics and cloud and ecommerce. A large number of people are required to work with that large amount of data,” she continued. “If we can develop and really scale, working with other organizations globally so we become more of a catalyst, then you have created a digital workforce of young men and women who are using this to get out of poverty.”

Basu and her team at iMerit have attracted growing interest from partners in Silicon Valley. A new partnership with CrowdFlower will allow companies to outsource work on sensitive data to iMerit specialists who are trained in data confidentiality standards. “Impact Sourcing Service Providers” like iMerit, Digital Divide Data and Samasource work with businesses to decrease their costs and increase their social impact through socially responsible outsourcing.

“The void we were filling was when young people finished the vocational training programs there were few jobs. It was difficult to make the linkage to the workforce,” said Michael Chertok, cofounder of Digital Divide Data. “So we became an employer, a business that could hire young people and develop the skills that they need.”

“After four years with DDD they start to see that they’re capable, with that increased sense of self efficacy to say I’d like to be a teacher or I’d like to be an engineer or I’d like to program computers,” Chertok added.

Other “impact sourcing” advocates hope socially-conscious business leaders will begin to think more about how their supply chains can play an active role in bringing opportunity to underserved places and communities. “What we'd like to see is impact sourcing become a part of operating models. We're trying to convey there doesn't have to be a trade-off between optimizing the bottom line and having a social impact,” said Lindsey Crumbaugh, vice president of strategy and development at Samasource.

In order to bridge the gap between poverty and digital employment, organizations working in the space will have to tackle some key barriers – from Internet connectivity to girls’ education. In doing so, companies can leverage their investment in one area to help achieve broader development goals, like gender equality.

The aim is to open up opportunities for a wider range of people and communities in dynamic economic sectors, instead of in stagnant ones.

“In Cambodia, the alternative is working in a garment factory, and that’s a dead end. There’s not really a growth path in that industry,” Chertok said. “But using 21st century skills, using computers and working in teams, it opens up a whole world of opportunities for women to advance.”

In Eastern India, Muslim women who were previously excluded from the workforce are now finding opportunities to work from home, thanks in part to organizations like iMerit, according to Hasina Karbhih, an Ashoka fellow who’s worked to combat human trafficking.

Still, outsourcing remains a touchy subject. Anyone who has lost a job because someone else could do it cheaper or a computer could do it faster will likely struggle to see these efforts as “socially responsible.” In a competitive global economy, however, the question is not whether outsourcing will happen, but how it can be used most effectively to fight poverty.

"This work is going to be outsourced from the country no matter what, so why not direct that to employment for people that are otherwise going to be marginalized from the workforce?” Crumbaugh of Samasource said.

In other cases, competition arises not from citizens of other countries, but from inanimate objects and lines of code. The same technological innovation that is connecting the marginalized and creating new jobs has the power to replace them. The alternative to low-cost, outsourced work like Web search optimization is, in many cases, a new algorithm. But Crumbaugh said that while the pace of innovation is rapid, so is the growth of opportunity it creates.

An algorithm that works someone out of a job is oftentimes the same algorithm that creates new forms of demand, which then can be satisfied by companies employing digitally trained workers, Crumbaugh explained.

As more and more companies embrace socially responsible outsourcing as part of a double or triple bottom line, new challenges emerge, including how to protect an emerging, globally dispersed digital workforce from rights violations or other harmful practices. Heather Franzese, who leads the Oakland, California-based social enterprise Good World Solutions, spoke with Devex about the Labor Link platform she’s used to reach 200,000 workers in 16 countries.

“Ensuring basic compliance with international labor laws is the first step, but that’s table stakes now, and that’s what people are expected to do as a minimum,” she said. “What we really want to do is connect millions of workers on this platform and poll them in real time about their needs and then connect them with local service providers who can meet those needs.”

Franzese said the Labor Link platform is just scratching the surface of what’s possible in terms of technology to protect workers, and an important next step will be to identify protections for workers based in their own homes. She said there is plenty of room for the global development community to support companies working on socially responsible outsourcing not only by connecting them with workers but also by ensuring that they go “beyond compliance” and focus on “worker well-being.”

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About the author

Catherine cheney devex
Catherine Cheneycatherinecheney

Catherine Cheney covers the West Coast global development community for Devex. Since graduating from Yale University, where she earned bachelor's and master's degrees in political science, Catherine has worked as a reporter and editor for a range of publications including World Politics Review, POLITICO, and NationSwell, a media company and membership network she helped to build. She is also an ambassador for the Solutions Journalism Network and the Franklin Project at the Aspen Institute.


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