A version of this post originally appeared on The World Bank blog.
Around the world, the challenge of unemployment is growing by the year. According to the United Nations, the number of global unemployed surpassed 201 million in 2014, which includes a disproportionate number of women and youth.
The growing reach and access to the Internet is changing traditional ways of working, creating new types of work, offering new opportunities and transforming lives in both developed and developing countries. Through the Internet, employers are able to access talent and extend jobs like never before, and individuals have the chance to access and perform work from anywhere in the world. This business model—called “online outsourcing” or online work—demonstrates the power of the Internet to not only catalyze new economic growth, but also to leverage the potential to drive social inclusion.
However, for an individual, becoming a successful digital entrepreneur requires significant skills development and social network building. In addition, both countries and companies need to evaluate the talent pool, policy implications and infrastructure requirements for a successful online outsourcing venture.
The World Bank Group—in a study supported by The Rockefeller Foundation and carried out in partnership with Dalberg Consulting—is helping interested companies, governments and individuals connect to outsourcing through a new report and online toolkit.
This collaboration is part of a broader partnership between the two organizations which has seen the undertaking of a number of activities to enhance opportunities for digital job creation in Africa, including development of an information technology (IT) park and capacity building for digitization of public records in Ghana.
The partnership is part of The Rockefeller Foundation’s Digital Jobs Africa initiative, which seeks to catalyze new, sustainable employment opportunities and skills training for youth in Africa, with a goal to positively impact one million lives in Egypt, Ghana, Kenya, Morocco, Nigeria, and South Africa through the ICT sector, and ultimately improve the social and economic well-being of entire families, communities and nations.
These successful collaborations have resulted in a renewed commitment to a strengthened partnership between The Rockefeller Foundation and the World Bank on the digital jobs agenda to develop skills for youth, and connect them to digital jobs across sectors including agriculture, e-commerce, education, and transport through co-financing catalytic and innovative activities.
On June 3, 2015, the World Bank Group released the first comprehensive study on online outsourcing, called “The Global Opportunity in Online Outsourcing.” This study is complemented by a web-based toolkit to diagnose the feasibility for establishing the online outsourcing industry in developing countries, in order to increase access to employment and income-generation opportunities. Dissemination events were conducted in Nigeria and Kenya in May 2015 to discuss the potential of online outsourcing with policy makers, local online outsourcing intermediaries and workers.
The study summarizes and analyzes global experiences in online outsourcing, as well as its potential impact on job creation, economic development and social inclusion. It also highlights policy recommendations from a developing-country perspective to enable and leverage online outsourcing for inclusive growth and social impact.
As mentioned in a recent blog, the estimated market size of the online outsourcing by 2020 will be US$15 to $25 billion, and could employ at least 30 million registered workers. The report also segments the online work sector and describes the tasks available through online outsourcing, as well as the skills needed to fill those roles.
The impact of online outsourcing
Opportunities for online jobs and businesses are on the rise. Online outsourcing offers advantages for companies and workers alike: broader access to specialized skills, faster hiring, 24-hour productivity by leveraging people from around the world, global job opportunities, and a more flexible work environment. It also provides possibilities for a wide range of technical aptitudes, from basic data entry to advanced coding, as well as levels of compensation. As with traditional jobs, the income and skills development benefits will vary depending on the complexity of tasks, with considerable variances reported across job types and online outsourcing platforms.
The report also suggests that outsourcing appears to be driving positive social change for women. For example, In India, female online workers use online outsourcing as a way of earning cash while caring for children and elderly family members, and Egyptian women from traditional households report use online freelancing as an alternative to working in male-dominated workplaces.
Initial findings from the study suggest that full-time online workers in Kenya, Nigeria, and India earn salaries that are comparable to, or higher than, their peers in traditional work. In addition to generating additional income, these workers report that online outsourcing allows them to develop skills and progress professionally.
Online outsourcing holds potential for individuals, governments and companies alike. While the future projections for the growth of the sector look bright, there is much work that governments and interested parties must do to ensure that the sector delivers on its full potential and that its benefits are available to as wide a pool of potential workers as possible. Through flexibility, inclusiveness and innovation, it represents an opportunity to reach women and youth seeking employment.