Report

Assessing the Opportunity for Building a Thriving Industry

From the global business manager to the casual customer who interacts with a call center to make an inquiry about her credit card bill, nearly everyone is familiar with the concept of business process outsourcing (BPO).  A myriad of books, news media articles, and even American television shows have 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. Impact sourcing is an exciting and emerging space within the BPO industry. It has demonstrated the potential to alleviate poverty for people in a sustainable manner through job creation and employment. Impact sourcing (IS) is commonly defined as employing people from poor and vulnerable communities as principal employees in BPO centers to provide high-quality, information-based services and other microwork to domestic and international clients.

Two key trends appear to be fueling interest in impact sourcing:

  • The BPO industry continues to grow and provide benefits to client firms (in the form of cost savings) and developing countries (fueling GDP growth), but BPO service providers face challenges related to costs and talent as the industry expands and competition increases.
  • Rising unemployment is a global problem particularly affecting poor and vulnerable communities.

Business process outsourcing has evolved over the past two decades to become a massive worldwide industry that directly impacts both international trade and the global economy. In particular, developing countries have taken advantage of this growing industry to fuel GDP growth and employ millions of citizens. In India, for example, BPO employs over three million people, with each direct job estimated to create as many as three to four additional employment positions. After India, other leading BPO hubs include the Philippines, China, and South Africa.

In 2012, The Rockefeller Foundation commissioned the William Davidson Institute (WDI) to conduct a research study in support of the Foundation’s impact sourcing work, which seeks to promote equitable growth in which the poor and vulnerable have greater access to opportunities that improve their lives, and more inclusively share the benefits of globalization.

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