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

Monday, October 8, 2012

Last week, B Corporation, a network of socially responsible “for-benefit” businesses, announced its plans to scale internationally at the Clinton Global Initiative. Many of these businesses are supported by impact investors, a group of double- and triple-bottom-line funders that received little attention until the Rockefeller Foundation launched a major impact investing initiative in 2008. Impact investing now boasts $50B in assets and is expected to grow by a factor of ten in the next decade.

Much as impact investing is transforming capital markets, impact sourcing could transform the trillion-dollar outsourcing industry. Impact sourcing, a new initiative piloted by the Rockefeller Foundation and several key partners, including my company Samasource, promises to connect poor and marginalized people to digital jobs on a massive scale. A study published last week by Avasant projects by 2020, the market for Impact Sourcing services will grow to employ 2.9 million people and generate revenues of $55.4 billion.

There are many reasons to be skeptical of impact sourcing as a strategy to create large numbers of jobs for the poor. Constraints abound–literacy, access to infrastructure, the types of work that poor people can do, and the large number of for-profit outsourcing companies competing for similar work. Why not focus on impact agriculture, or impact manufacturing–fields which seem to have fewer barriers to growth in poor regions?