Article | Harvard Business Review | December 2012

The Microwork Solution: A New Approach to Outsourcing Can Support Economic Development—and Add to Your Bottom Line

by Francesca Gino and Bradely R. Staats

Abstract

What's the best way to lift people out of poverty? The social entrepreneurs in the new "impact sourcing" industry believe the answer is providing work, not aid. Their organizations hire people at the bottom of the pyramid to perform digital tasks such as transcribing audio files and editing product databases. Essentially, they do business process outsourcing that also boosts economic development. Samasource, a San Francisco–based nonprofit, is one of the leaders in this new field. It has developed a model that addresses the challenges that impact sourcing faces: inexperienced workers; customers who make decisions on price, not social impact; and the cost of building the necessary IT infrastructure. One way Samasource overcomes hurdles is by teaming up with local entrepreneurs. The local partners run the service centers and cover the $25,000 needed to set each one up, and Samasource helps them win customers like LinkedIn and Google, prep and scope projects, hire and train staff , and measure success. Samasource's model is especially attractive because it has achieved big results with a small staff . Though it has only 30 employees, the nonprofit has created 16 centers that have paid more than $2 million to 3,000-plus employees.

Keywords: outsourcing; Job Cuts and Outsourcing; Nonprofit Organizations; Partners and Partnerships; Development Economics; Social Entrepreneurship; Welfare or Wellbeing; Cooperation; San Francisco;

Citation:

Gino, Francesca, and Bradely R. Staats. "The Microwork Solution: A New Approach to Outsourcing Can Support Economic Development—and Add to Your Bottom Line." Harvard Business Review 90, no. 12 (December 2012): 92–96.