NextBillion - An Initiative of the William Davidson Institute at the University of Michigan

Editor’s note: This post is the first in a six-part series examining the emerging Impact Sourcing space through work performed by the William Davidson Institute and funded by the Rockefeller Foundation.

From the global business manager to the casual customer who interacts with a call center when they review a credit card bill, just about everyone is familiar with business process outsourcing (BPO). Myriad books, news media articles, even an American TV series, explored the pros and cons of outsourcing as a mechanism for efficiency and opportunity.

A far less recognized term in the business lexicon is Impact Sourcing, also known as socially responsible outsourcing. But it’s an exciting and emerging space within the BPO sector. It has demonstrated the potential to alleviate poverty for millions of people in a sustainable manner through job creation and employment. Impact Sourcing is commonly defined as employing people from poor and vulnerable communities (i.e. base of the pyramid (BoP) workers, youth workers, disabled workers) as principle employees in BPO centers to provide high-quality, information-based services and other microwork to domestic and international clients.

Two trends, which we will discuss in more detail during the course of this series, appear to be fueling interest in Impact Sourcing:

1. The continued emergence of the BPO sector as a driver of GDP growth and large-scale job creation for developing countries.

2. Increasing concerns about rising global unemployment, which particularly impacts those from poor and vulnerable communities seeking opportunities.

Over the past several years, many within the BPO industry, government entities and supporting organizations have begun to determine whether it is possible to leverage the BPO sector to create large-scale employment opportunities targeted specifically at traditionally underserved groups. The Rockefeller Foundation, through its initiative focused on poverty reduction through digital employment, has invested significant resources to better understand and foster the growth of Impact Sourcing. Last year, the William Davidson Institute (WDI) partnered with the Foundation to help determine which countries show the highest potential to develop Impact Sourcing capabilities, and to perform field research to better understand the impacts of Impact Sourcing employment on workers and their families. Many of the results of this work will be shared in this six-part series on Impact Sourcing on NextBillion. Here’s how it will be organized:

Part two, which will be posted Tuesday, will explore major trends driving the development of Impact Sourcing, assess Impact Sourcing’s potential and discuss some challenges that have hindered the space to date.

Parts three, four, and five will share findings gathered through field visits with Impact Sourcing Service

Providers (ISSPs) based in Kenya. ISSPs are the BPO organizations with the specific social objective to hire workers from poor and vulnerable communities to perform BPO work. WDI visited three ISSPs at various stages of development:

• An early-stage pilot ISSP based in Kisumu, Impact Sourcing Africa;

• A mid-stage ISSP providing virtual employment opportunities to students, Daproim; and

• A mature ISSP looking to scale its global operations in Kenya, Digital Data Divide (DDD).

Part six will look to the future of Impact Sourcing, specifically outlining the challenges facing the sector and potential steps that can be taken to further develop the space.

We encourage you to ask questions, share your own experiences and help us build a dialogue around Impact Sourcing throughout the series here on NextBillion.

Sateen Sheth is the manager of Research Project Implementation at the William Davidson Institute.

Ekta Jhaveri is a former WDI research associate who contributed research and support to this article.