The Microwork Solution a New Approach to Outsourcing Can Support Economic Development—And Add to Your Bottom Line

HBR.ORG DECEMBER 2012 REPRINT R1212G The Microwork Solution A new approach to outsourcing can support economic development—and add to your bottom line. by Francesca Gino and Bradley R. Staats This article is made available to you with compliments of Bradley R. Staats. Further posting, copying or distributing is copyright infringement. The Microwork Solution A new approach to outsourcing can support economic development—and add to your bottom line. by Francesca Gino and Bradley R. Staats WHAT’S THE BEST way to help the world’s poor? The answer may not be giving them more aid. What people need to break the cycle of poverty is work. A small but growing industry known as “impact sourcing” is addressing that need head-on by hiring people at the bottom of the pyramid to perform digital tasks such as transcribing audio files and editing product databases. Essentially, it’s business process outsourcing aimed at boosting economic development. Impact sourcing is not unlike microfinancing: It aspires to create meaningful work for and put money in the pockets of the people who need it most. And because it connects new workers—often those who’ve been marginalized, such as Muslim women in Calcutta—to the global supply chain and addresses real needs of first-world companies, it could ON: JOHN HERSEY quickly reach a large scale. In a study commissioned I by the Rockefeller Foundation last year, Monitor Group estimated that the market for impact sourcing ILLUSTRAT 2 Harvard Business Review December 2012 COPYRIght © 2012 HARVARD BUSINESS SCHOOL PUBLISHING CORPORATION. ALL RIGHTS RESERVED. This article is made available to you with compliments of Bradley R. Staats. Further posting, copying or distributing is copyright infringement. ILLUSTRATIon/PHOTOGRAPHY: NAME This article is made available to you with compliments of Bradley R. Staats. Further is ordistributing posting,copying Staats. R. withcompliments ofBradley toyou This article ismadeavailable copyright infringement.copyright THE MICROWORK SOLUTION was $4.5 billion in 2010 and would rise to $20 billion out for its ability to address the significant chal- by 2015. It also predicted that employment in the lenges that impact sourcing faces. For one, people at industry would grow from 144,000 to 780,000 over the bottom of the pyramid don’t necessarily have the the same period. skills or experience to perform knowledge work. Few Samasource, a nonprofit based in San Francisco, have held jobs in traditional offices, and many lack is fast becoming a leader in this market. Founded in technology expertise. And though potential custom- 2008 by Leila Janah, Samasource is still small: Just ers may like the idea of impact sourcing, most still 30 people work at the organization’s headquarters, make purchasing decisions on the basis of price, not about half in field operations and the remainder social impact. Finally, building a microwork busi- spread more or less evenly across sales, technol- ness requires significant capital investment in an IT ogy, fundraising, and internal operations. But it has platform that can coordinate the work. already established 16 work centers—in South Asia, Samasource may not have all the answers, but Africa, and Haiti—which have paid more than $2 mil- it has developed a model that effectively tackles lion to 3,000-plus workers. That relatively large im- each of those issues. That model follows five key pact suggests that the organization’s approach has a principles: lot of promise. Samasource is a middleman. It secures contracts Conserve Capital for digital services from large U.S. and European Samasource’s first challenge was companies (including LinkedIn and Google), divides to set up a network of centers that the work into small tasks—“microwork”—and sends would offer workers the right train- it to centers in developing regions, where employees ing and infrastructure (computers, complete it using a web-based interface. Much of internet connections, and so forth). Because the or- that work involves data—phone numbers on web- ganization lacked the capital to build a wholly owned sites, for example—that can be easily verified online network, it teamed up with local entrepreneurs who by people with little training who are in remote lo- had the resources to open franchises at a cost of cations. In the short term, employees earn a living about $25,000 each. The deal was that Samasource wage (typically $100 to $300 a month), but they also would find the customers and then pay the centers gain skills that can help them in the long term. And to execute the work. The nonprofit’s staff would also customers, by using microwork centers instead of help the entrepreneurs secure space, equipment, large for-profit vendors, can get jobs done for 30% to and employees, and would create standard operat- 40% less, Samasource calculates. ing procedures for hiring, orientation, and training. There are a number of other leading players in the Identifying people with the capability and willing- space. Digital Divide Data, for example, is a nonprofit ness to open a center was critical. Janah believed that that began operations in Cambodia in 2001 and then many prior economic development efforts had failed expanded to Laos and Kenya. The for-profit company when unwilling participants were handed a new DesiCrew, which grew out of work done at the Indian “opportunity.” Therefore Samasource used a “pull” Institute of Technology Madras, targets opportuni- rather than a “push” model: Partners had to reach ties in India. So do the for-profits B2R Technologies, out to Samasource. To aid this process, Samasource which focuses on India’s northern hill country, and held information sessions in targeted areas. Candi- RuralShores, which hopes to establish 500 centers dates needed to come to the sessions with their own across India and connect them virtually so that they capital; they couldn’t just expect a handout. can execute increasingly larger projects for clients. Consider the session Samasource held in Nai- All these organizations strive to improve the lives robi in 2008. Sixty people participated, and the ses- of disadvantaged workers. But Samasource stands sion generated such interest in the community that By using microwork centers instead of large for-profit vendors, customers can get jobs done for 30% to 40% less. 4 Harvard Business Review December 2012 This article is made available to you with compliments of Bradley R. Staats. Further posting, copying or distributing is copyright infringement. FOR ARTICLE REPRINTs call 800-988-0886 or 617-783-7500, OR VISIT HBR.ORG Idea in Brief “Impact sourcing” is a promising first-world companies, it could 2. Set the stage for success. 4. Leverage technology. The new way to promote economic reach a large scale. The organization scopes and organization developed a plat- progress in developing regions. Samasource is a leader in preps clients’ projects and form called SamaHub, which The idea is to hire and train this field. Its model follows helps centers run pilots to work helps automate training, work people at the bottom of the five principles: out any kinks. flow, and quality assurance. pyramid to execute digital tasks 1. Conserve capital. 3. Build workers’ skills. 5. Define metrics. To stay like transcribing audio files and Samasource teams up with Many people in developing true to its mission, Samasource editing product databases. Like local entrepreneurs who have regions need help learning the needs to get work, give work, microfinancing, impact sourc- the resources to open fran- basics. Samasource provides and grow. So it tracks perfor- ing aims to create meaningful chises. It then helps these part- online training programs that mance in all three areas and work for the poor, and because ners secure space, equipment, workers can complete on their gathers detailed metrics like it addresses real needs of workers, and customers. own time. accuracy rates. afterward more than 80 entrepreneurs applied to native to each region so that it can channel projects open centers. Samasource rigorously evaluated the to centers best equipped to handle them. For ex- commitment and abilities of the applicants and then ample, the center in Uganda, which has a long local selected just seven. Two were a brother and sister, tradition in pottery, crafts, and poetry, is very good who had respectively been running an internet café at handling creative and writing tasks. The centers and working as a manager for Shell and were eager to in India prefer work with clear answers. Samasource build a social business that could help marginalized tries to match projects to the local employees’ capa- workers in Kenya. By 2012 their center was turning a bilities, although it also gives people assignments profit and employed more than 180 people. that will stretch them. The franchise model not only allows Samasource to efficiently use its limited capital but also builds the Build Workers’ Skills entrepreneurship capability in a region. And it en- Sama means “equal” in Sanskrit, sures that more profits stay in the area the organiza- and Samasource was founded on tion is trying to help. In some ways this setup is risky. the belief that all people are equal If entrepreneurs see a better opportunity elsewhere, and that anyone who has the nec- they might abandon ship. But Samasource doesn’t essary commitment can complete select franchisees who are focused only on making a job that needs to be done. Yet many of its centers’ money; it makes sure its local partners share its mis- employees require help with the basics—building sion of dramatically reducing poverty. self-confidence, for instance, or learning office -pro tocols (such as following a schedule). Workers have Set the Stage for Success to be able to speak and write in English, but most Selling the centers’ services to cor- have little to no traditional work experience.

Load more