Diasporas and Outsourcing: Evidence from oDesk and India

Ejaz  Ghani; William R. Kerr; Christopher  Stanton

Article | Management Science | July 2014

Diasporas and Outsourcing: Evidence from oDesk and India

by Ejaz Ghani, William R. Kerr and Christopher Stanton

Abstract

This study examines the role of the Indian diaspora in the outsourcing of work to India. Our data are taken from oDesk, the world's largest online platform for outsourced contracts, where India is the largest country in terms of contract volume. We use an ethnic name procedure to identify ethnic Indian users of oDesk in other countries around the world. We find very clear evidence that diaspora-based links matter on oDesk, with ethnic Indians in other countries 32% (9 percentage points) more likely to choose a worker in India. Yet, the size of the Indian diaspora on oDesk and the timing of its effects make clear that the Indian diaspora was not a very important factor in India becoming the leading country on oDesk for fulfilling work. In fact, multiple pieces of evidence suggest that diaspora use of oDesk increases with familiarity of the platform, rather than a scenario where diaspora connections serve to navigate uncertain environments. We further show that diaspora-based contracts mainly serve to lower costs for the company contacts outsourcing the work, as the workers in India are paid about the market wage for their work. These results and other observations lead to the conclusion that diaspora connections continue to be important even as online platforms provide many of the features that diaspora networks historically provided (e.g., information about potential workers, monitoring, and reputation foundations).

Keywords: Diaspora; outsourcing; oDesk; Networks; Job Cuts and Outsourcing; Diasporas; Online Technology; Ethnicity; Service Industry; South Asia; India;

Format: Print

Read Now

Citation:

Ghani, Ejaz, William R. Kerr, and Christopher Stanton. "Diasporas and Outsourcing: Evidence from oDesk and India." Management Science 60, no. 7 (July 2014): 1677–1697.

Case | HBS Case Collection | July 2019 (Revised May 2020)

AT&T, Retraining, and the Workforce of Tomorrow

William R. Kerr, Joseph B. Fuller and Carl Kreitzberg

By the late 2000s, rapid changes in the telecommunications industry forced AT&T’s management team to take on a task that CEO Randall Stephenson called the “biggest logistical challenge” they had ever seen: retraining 100,000 workers by 2020. In 2012, internal company analyses found that AT&T’s workforce would lack the skills it needed to fulfill emerging job requirements. AT&T responded by creating “Workforce 2020,” a company-wide initiative that sought to address potential skill shortfalls. The initiative aimed to transform AT&T’s workforce by implementing multiple changes, such as redesigning job roles, developing new educational curricula with Udacity, and incentivizing employees to retrain themselves for high-demand careers. Some gave high praise to the “Workforce 2020” model, going so far as to call it a new “social contract” between employers and employees. Others worried that the new program was systematically disadvantaging specific groups of workers. In 2018, AT&T rebranded Workforce 2020 to “Future Ready,” signaling the company’s commitment to retraining its workforce beyond 2020.

Keywords: AT＆T; workforce; skills; future of work; telecommunications; Unions; technological change; layoffs; MOOCS; Strategic Planning; Employees; Training; Competency and Skills; Labor; Learning; Labor Unions; Technology Adoption; Talent and Talent Management; Telecommunications Industry; Communications Industry; United States;

Citation:

Kerr, William R., Joseph B. Fuller, and Carl Kreitzberg. "AT&T, Retraining, and the Workforce of Tomorrow." Harvard Business School Case 820-017, July 2019. (Revised May 2020.) View Details

Cite View Details Educators Purchase

We use individual-level data to shed light on the evolution of founder-CEO compensation in venture capital-backed startups. We document that having a tangible, marketable product is a fundamental milestone in CEOs’ compensation contracts, marking the point at which liquid cash compensation begins to increase significantly – well before a liquidity event. “Product market fit” also coincides with key human capital in the startup becoming more replaceable, marking an apparent transition in the firm's lifecycle from ‘differentiation’ to ‘standardization’. Although substantial increases in cash compensation for founder-CEOs in response to milestones improves the certainty equivalent of attempting entrepreneurship relative to flat pay, low cash compensation in the very early years can still deter entrepreneurship for potential entrants. We characterize the types of individuals most likely to be impacted by this constraint and hence those whose ideas are unlikely to be commercialized through VC-backed entrepreneurship.

Talent is a critical resource for today’s knowledge economy. The United States has benefited substantially from high-skilled migration since the 1970s, especially with respect to innovation and entrepreneurship. This chapter reviews data on these immigrant contributions, and it discusses the important roles played by universities and firms under the American system. The chapter concludes with ways that U.S. immigration policy could be enhanced, which will become more important as other nations become more competitive for global talent.

Faculty & Research

Diasporas and Outsourcing: Evidence from oDesk and India

Abstract

Citation:

About the Authors

More from these Authors