Washington, DC — The phrases "impact sourcing" and "business process outsourcing"- or BPO - are just jargon to most people. But they describe a model of doing business that advocates say could provide 780 thousand new jobs in the next two years - many to Africa's "youth bulge" of unemployed young people - by providing training, on-the-job experience and career opportunities. Cindy Shiner looked at what that means. This is a transcript of the audio.
The potential for impact sourcing in Africa is growing. Just ask Amolo Ng'weno, managing director of Digital Divide Data (DDD) in Nairobi, Kenya. The company began only two and a half years ago and now employs about 300 youths, some of them hearing impaired, from Nairobi's urban slums.
"The whole worldwide universe of digital jobs is only increasing, and so Africa taking on an increasing share of that is sort of the vision and image that DDD believes in and is promoting," she said. "We think there's a bright future for digital jobs in Africa."
Impact sourcing employs socio-economically disadvantaged people in business processing centers. They workers provide information-based services to domestic and international public and private-sector clients. Work can include data entry, Internet research and call center activity.
A report funded by the Rockefeller Foundation in 2011 estimated that the field of impact sourcing was already worth nearly five billion U.S. dollars, with the potential to reach 20 billion dollars by 2015. Based on those findings, the Foundation launched its "Digital Jobs Africa" initiative at the World Economic Forum in Cape Town four months ago. The initiative aims to change up to a million lives through skills training and job creation over the next seven years.
Taddy Blecher of South Africa's Impact Sourcing Academy points out that both the United Kingdom and Europe as a whole have designated South Africa as their top outsourcing destination.
Blecher sees only growth ahead. Since the academy started a year and a half ago, nearly 800 youths have been trained. About 350 are going for university degrees and the rest have jobs, spread among 16 employers.
"We see massive potential for South Africa to become the number one impact-sourcing destination in the world," he said. "We are getting a lot of support from the South African government to do this … incentives because it creates jobs in this country."
The South African government has implemented a 300-million-dollar BPO and Off-shoring program that entices foreign companies to create digital jobs. Between July 2007 and March 2010, the government said financial incentives resulted in the creation of at least 6,000 new jobs and attracted about 31 million dollars in direct investment.
For Blecher, it's more than just good business.
"It's profitable, sustainable business but it has this incredible social context to it in which large numbers of individuals … receive training and a good job with a long-term future as well as the opportunity to move through the economy at different levels," he said.
Other African governments besides South Africa's are aware of the potential for impact sourcing.
In West Africa, Ghana has established the Information Technology Enabled Services. It's part of the government's eGhana Project to nurture the data processing industry through addressing obstacles to investment.
In Kenya, business outsourcing is included in the country's master plan for development, called Vision 2030, as a key pillar and driver of social and economic improvement. The Kenyan government projects that by 2017, information technology should be contributing an estimated two billion dollars, or 25 percent of GDP, to the economy. It also predicts that IT will have created 500 technology companies and brought in 50,000 jobs.
Ng'weno of Digital Divide Data sees the potential for growth.
"We have a combination of very high use - especially among young people - of technology, the Internet, cell phones. We have a good education system and they speak English," she said. "And we have a large, unemployed, fairly well educated, willing to work youth sector and so they're well prepared for work in digital jobs."
Ng'weno said a number of young people have joined DDD right out of high school and have been promoted to positions of significant responsibility where they're managing up to 30 people.
"They support their younger siblings to go to school, they support their parents to have enough to eat and they invest in their own future and it's very rewarding to hear all of their stories" she said.
Digital Divide Data currently employs a total of about 1,000 people, including the operation in Kenya and those in Asia. The goal is to grow that total number to about 3,000 over the next five years.
Blecher said the Impact Sourcing Academy is set to open its second South African office in Durban, and also hopes to open one in Cape Town, as well as to expand to other countries in Africa where impact sourcing is catching on.
Digital jobs provider Samasource, which is based in San Francisco in the United States, operates in three African countries: Uganda, Kenya and Ghana. Women are among its chief recruits. Chief Operating Officer Mary Ann Byrnes says one of the most important things for the company is measuring impact.
"Our latest data shows 89 percent of our workers having successful outcomes. And successful outcomes include going to school, qualifying and getting additional work, and for some it is a combination of work and school," she said. "That is really powerful for us."
She said Samasource has employed 3,700 people so far, helping improve the lives more than 15-thousand of their dependents.
The Rockefeller Foundation, which is celebrating its 100th anniversary this year, is a contributor to AllAfrica's development reporting fund.