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Incentives & Opportunities for Scaling “Impact Sourcing” Sector

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Incentives & Opportunities for Scaling “Impact Sourcing” Sector Incentives & Opportunities for Scaling the “Impact Sourcing” Sector Supported by: September 2012 Supported by TABLE OF CONTENTS ABBREVIATIONS AND ACRONYMS ........................................................................................................................ III INTRODUCTION ..................................................................................................................................................... 1 BACKGROUND ............................................................................................................................................................... 1 OVERALL OBJECTIVES ...................................................................................................................................................... 1 METHODOLOGY ............................................................................................................................................................. 2 INTENDED AUDIENCE ...................................................................................................................................................... 3 IMPACT SOURCING OVERVIEW .............................................................................................................................. 4 INDUSTRY BACKGROUND ................................................................................................................................................. 4 SIZE OF THE INDUSTRY ..................................................................................................................................................... 6 KEY IMPACT SOURCING ARCHETYPES .................................................................................................................................. 8 IMPACT SOURCING VS. BPO SECTOR — POLICY IMPLICATIONS ............................................................................................... 9 KEY OPPORTUNITIES FOR THE IMPACT SOURCING SECTOR .................................................................................................... 10 KEY CHALLENGES FOR THE IMPACT SOURCING SECTOR......................................................................................................... 13 COUNTRY ANALYSIS ............................................................................................................................................. 15 PRIMARY FOCUS COUNTRIES .......................................................................................................................................... 15 COUNTRIES WITH POTENTIAL TO BUILD THE IS SECTOR ........................................................................................................ 17 SCALABILITY OF IMPACT SOURCING — KEY RECOMMENDATIONS ....................................................................... 21 RECOMMENDATIONS FOR OVERALL IS SECTOR DEVELOPMENT .............................................................................................. 24 RECOMMENDATIONS FOR ARCHETYPE I (SCALING UP IMPACT SOURCING SERVICE PROVIDERS) ................................................... 30 RECOMMENDATIONS FOR ARCHETYPE II (DIRECT EMPLOYMENT IN THE TRADITIONAL BPO ORGANIZATIONS) ................................. 37 RECOMMENDATIONS FOR ARCHETYPE III (SUBCONTRACTING TO ISSPS) ................................................................................. 40 CONCLUSION ....................................................................................................................................................... 42 ANNEXURE 1 — COUNTRY PROFILES AND ANALYSIS ........................................................................................... 43 GHANA ...................................................................................................................................................................... 43 INDIA ......................................................................................................................................................................... 44 KENYA ........................................................................................................................................................................ 46 SOUTH AFRICA ............................................................................................................................................................. 47 BANGLADESH............................................................................................................................................................... 48 BRAZIL ....................................................................................................................................................................... 49 DOMINICAN REPUBLIC................................................................................................................................................... 51 HAITI ......................................................................................................................................................................... 52 PACIFIC ISLANDS........................................................................................................................................................... 53 UGANDA .................................................................................................................................................................... 54 ANNEXURE 2 — IMPACT SOURCING MARKET SIZE ............................................................................................... 56 MARKET OVERVIEW — GHANA ...................................................................................................................................... 56 MARKET OVERVIEW — KENYA ....................................................................................................................................... 57 ANNEXURE 3 — LIST OF INTERVIEWEES ............................................................................................................... 58 ANNEXURE 4 — LIST OF SURVEY RESPONDENTS .................................................................................................. 63 i Supported by LIST OF FIGURES Figure 1: Data-Collection Approach ............................................................................................................................... 2 Figure 2: Global BPO Market Size Estimation by NASSCOM ........................................................................................ 10 Figure 3: IS Growth Expectations by Service Providers ............................................................................................... 12 Figure 4: Scalability of Impact Sourcing: Key Pillars and Ecosystem............................................................................ 21 Figure 5: Attractiveness vs. Focus of Government Initiatives...................................................................................... 22 Figure 6: Effectiveness of Government Policies and Initiatives ................................................................................... 22 LIST OF TABLES Table 1: Impact Sourcing Market Size ........................................................................................................................... 7 Table 2: Key Strengths and Challenges for Three IS Archetypes ................................................................................... 9 ii Supported by Abbreviations and Acronyms BPeSA Business Process enabling South Africa BPO Business Process Outsourcing CAGR Compounded Annual Growth Rate CEO Chief Executive Officer CIC Community Information Centers CIO Chief Information Officer FDI Foreign Direct Investment GASSCOM The Ghana Association of Software and IT Services Companies IAOP International Association of Outsourcing Professionals ICT Information and Communications Technology INR Indian Rupee IS Impact Sourcing ISSP Impact Sourcing Service Provider IT Information Technology ITES Information Technology Enabled Services KPO Knowledge Process Outsourcing LPO Legal Process Outsourcing NASSCOM The National Association of Software and Services Companies (India) PRIDE Poverty Reduction through Information and Digital Employment USD US Dollars iii Supported by Introduction Background The Rockefeller Foundation (“Foundation”) has a stated mission to promote the well-being of people throughout the world that has remained unchanged since its founding in 1913. The Foundation has long held that progress and rising standards of living for all groups can be achieved with the adoption of thoughtful policies aimed at promoting the well-being of people throughout the world. Today, that mission is being adapted to an era of rapid globalization. The Foundation envisions that this century can be one in which globalization’s benefits are more widely shared and its challenges more easily weathered. To realize this vision, the Foundation seeks to achieve two fundamental goals. First, it seeks to build resilience that enhances individual, community and institutional capacity to survive, adapt and grow in the face of acute crises and chronic stresses. Second, it seeks to promote growth with equity in which the poor and vulnerable have more access to opportunities that improve their lives. Through its Poverty Reduction through Information and Digital Employment (PRIDE) work, the Foundation is working to foster and develop a new arm of the outsourcing industry called Impact Sourcing (IS) to create employment opportunities
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