Remote work can help end poverty. Learn how in this presentation by Leila Chirayath Janah of Samasource. For more information, visit www.sourceoutpoverty.org

1. Socially Responsible Outsourcing
Empowering the Poor Through Remote Work
Leila Chirayath Janah
Founder & CEO, Samasource
source responsibly. TM

2. Summary
The $160 billion global services industry has created over 1.5
million jobs
These are mostly concentrated in big cities in China, India
and the Philippines
As a result, over 170 million skilled workers in developing
regions such as Africa and rural Asia are left out
Unemployment is one of poverty’s greatest ills.
Socially responsible outsourcing can help.

3. Contents
1 2 3 4 5 6
1. What is outsourcing?
2. Who benefits currently?
3. Outsourcing and socio-economic development: the
problem
4. One solution: socially responsible outsourcing
5. Case studies
6. Appendix

4. What is outsourcing? 1 2 3 4 5 6
What is outsourcing, anyway?
“The services trade at arm's length that does not require geographical proximity of the buyer
and the seller.” (Jagdish Bhagwati, Columbia University economist)
Business Process Outsourcing (BPO) is practiced by most of the Global 1000 and includes a
wide range of services:
Creative services, software and web application development, call
Client-facing processes
center, web-design and maintenance
Decision-based processes HR services, live chat and SMS services
Transcription, expense processing, video captioning, medical billing,
Rule-based processes
online reseach, translation
Data entry, transfer and coversion
Data entry, document management and scanning
tasks

5. What is outsourcing? 1 2 3 4 5 6
Where is it done?
$120-150B global business process outsourcing market
Eastern Europe
USA $3.3B
$90B
China & Southeast Asia
$3.1B
Latin America &
India
Caribbean
$17B
$2.9B
Middle East & Africa
$425M
Source: NASSCOM-McKinsey Study 2005; http://www.indobase.com/bpo/global-market-of-bpo.html

6. Who benefits? 1 2 3 4 5 6
Outsourcing: who benefits?
Poll result: what is the impact of
outsourcing on the US economy? “They try to blame the economy and
market conditions . . . . But the real
reason we've lost jobs is outsourcing.”
Helps
17% —Gary Nilsson, President CWA Local 1365
Not sure
14%
“Tech companies made tremendous
Hurts profits with these workers, now they're
69% throwing them away . . . when these jobs
go overseas, they're not coming back.”
—Christina Huggins, AT&T employee and Second
Executive Vice President
Most Americans think
outsourcing hurts the
US economy.
Source: http://www.pollingreport.com/trade.htm Source: the New York Times; www.outsourceoutrage.com

7. Who benefits? 1 2 3 4 5 6
Outsourcing: who really benefits (part 1)
Large Outsourcing Firms 1.5M knowledge jobs
...7 billionaires
Remote Work Websites 200K+ knowledge projects
46%
1% US
Canada, UK, Australia
11% Europe & Latin America
India
Africa
17%
25%
Source: Company websites; Alexa.com

8. Who benefits? 1 2 3 4 5 6
Outsourcing: who really benefits (part 2)
Technology and knowlege jobs can lift entire families
out of poverty.
Home Work
Bombay, India Bombay, India
Dharavi, South Asia’s largest slum Call center floor
Over 2.5M people living on 175 hectares Many of India’s 1M BPO workers commute
from slum areas

9. Outsourcing and Socio-economic development 1 2 3 4 5 6
The problem: many poor regions are left out
Perception that economically
277% of per-capita income spent depressed regions are open for
on tertiary education in some
countries aid, not trade
+ +
>175M skilled workers in Africa, Few opportunities for
rural India and China smaller firms to connect to US clients
+ +
60% unemployment among No socially responsible
university and high school graduates option that promotes economic
development
= =
Talent Client
Surplus Deficit

10. Outsourcing and Socio-economic development 1 2 3 4 5 6
The problem: talent surplus (part 1)
32 million rural Chinese leave their towns each
year for big cities, in search of work
45 million rural Chinese youth are currently
enrolled in senior secondary schools
Source: Wang, Dewen. “China’s Rural Compulsory Education: Current Situation, Problems and Policy Alternatives.” Working Paper Series No.36. 2003
The Organization for Economic
Cooperation and Development (OECD)
reports that there are 130 million surplus
workers in rural India
Source: “Rural BPO.” Drishtee BPO Presentation. March 2008.
Over 990,000 young people graduate
from secondary and tertiary institutions in
Ghana and Kenya each year and face
staggering unemployment
Source: Kenya Ministry of Education; Ghana Ministry of Education; Samasource research November 2007 - March 2008.

11. Outsourcing and Socio-economic development 1 2 3 4 5 6
The problem: talent surplus (part 2)
“You find people completing
“The dilemma in Kenya, and Africa at large, their university education with
is that the cost of education is getting so honors, and the best they
high...upon finishing, you can’t get a job that can get is a one-off job doing
will offer returns commensurate with what something unrelated to what
you’ve done in school.” they studied. So you end up
going back to the rural area
Freda Adundo, IT degree candidate, Kenya where you grew up to do
farming.”
Peter Kimwele, business
degree candidate, Kenya
“It’s like the Western countries are missing
a generation which they want to import
from Africa...our economy and our brains
are in America. Why can’t people earn an
income while they stay here?”
Martin Ntembe, business degree
candidate, Kenya
Source: Samasource interviews (Kenya School of Professional Studies: Nairobi). November 2007 - March 2008.

12. Outsourcing and Socio-economic development 1 2 3 4 5 6
The problem: talent surplus (part 1)
Results from a survey of nonprofit IT and business managers
How do buyers find outsourcing partners? What is important in choosing an outsourcing
partner?
Personal/professional referral Direct mail/email Over 75% of buyers think social responsibility is
Web-based search Advertising important in choosing an outsourcing vendor
Advertising is
Quality
somewhat effective, 19%
but costly for small
firms Cost
10% Social responsibility
5% Customer Service
Direct mail and 67%
web searches
seldom connect Location
service providers Most find work through
to clients personal and 0 25 50 75 100
professional referrals
Source: Samasource Outsourcing Practices Survey (48 responses) . March-October 2008.

13. Outsourcing and Socio-economic development 1 2 3 4 5 6
The problem: talent surplus (part 2)
“We have to focus on “Kenya was hit hard after the elections
delivering quality services to [earlier this year]. One of our workers, Mona,
our clients rather than has two kids and is a single mom. This is
procuring business.” her life, this is her livelihood. We need to
generate a sustainable pipeline for business
Gagan Singh, Source for development to ensure this doesn’t keep
Change, India happening.”
Gilda Odera, Skyweb Evans, Kenya
“Business development is a major challenge
for us. We can’t afford to send salespeople
to the US every few months to drum up
business and work on branding”
Steve Muthee, Daproim, Kenya
Source: Samasource interviews, March-October 2008.

14. Socially responsible outsourcing 1 2 3 4 5 6
One solution: socially responsible outsourcing (1)
Channel outsourcing dollars where they’re needed
most
$160B services
Small firms Marginalized people
industry
$$$
a small slice of the pie
talented workers with
companies in the poorest few opportunities
places

15. Socially responsible outsourcing 1 2 3 4 5 6
One solution: socially responsible outsourcing (2)
Socially responsible outsourcing creates positive social impact by:
Outsourcing jobs in sub-Saharan Africa
1
Ghana
directly generating jobs for skilled Senegal
workers in low-income regions with Kenya
high unemployment levels Uganda
0 1,000 2,000 3,000 4,000
2 1 direct job 2.5 indirect jobs
indirectly generating jobs for
semi- and unskilled workers
3
reducing skilled-labor emigration, or
“brain drain,” in low-income regions

16. Socially responsible outsourcing 1 2 3 4 5 6
Guiding Principles for SRO from
Principle Purpose
1 Get money into high poverty areas
2 Keep money in high poverty areas
3 Keep money in good companies
Responsible business Service providers
+
Buyers
Academics
Industry
Consultants

17. Socially responsible outsourcing 1 2 3 4 5 6
1 Get money into high poverty areas
SRO companies are:
(1) Located in a “low-income” country, or
(2) Located in a “middle-income” country
and
most of its employees are from a “low-income” region
within that country.

18. Socially responsible outsourcing 1 2 3 4 5 6
2 Keep money in high poverty areas
SRO companies should meet at least one of the
following three requirements:
(1) At least 1/2 of the Company owned by people living
in same region as 2/3 of employees; or
(2) Reinvests a minimum of 40% of its revenue in the
community or in another SRO; or
(3) Legally registered non-profit

19. Socially responsible outsourcing 1 2 3 4 5 6
3 Keep money in good companies
Progressive
Labor Policies
Fair
wages,
worker repre-
sentation, active
recruitment of disadvantaged
people
on-
verification the-job
procedures training and
including random education, reinvestment in
checks, employee hotlines community initiatives
Transparency Community
Contributions

20. Case studies 1 2 3 4 5 6
Case Study: Digital Divide Data
Location: Phnom Penh, Cambodia and Vientiane, Laos
• Nonprofit social venture led by Harvard
graduate Jeremy Hockenstein
• Started in Phnom Penh in 2002 with 25
employees
• Types of services: form and survey
processing, transcription, digitization
• Offers education for sex-trafficked women,
on-site medical care, scholarship program
(financed through donations)
• Currently employs 500+ people at 3x
Cambodian minimum wage
• Operationally self-sufficient with revenue from
services for clients including the Harvard
Crimson

21. Case studies 1 2 3 4 5 6
Case Study: Daproim Africa
Location: Nairobi, Kenya
• Run by Steve Muthee, a young entrepreneur
from rural Kenya
• Started in 2006 with 4 people
• Types of services: form and survey processing,
transcription, digitization, web development
• Offers part-time work to local university students
and facilities for disabled workers
• Plans to grow to 20-30 people
• First large project branded as a socially
responsible outsourcing firm: $13K
• In pipeline: projects for clients including
Benetech, a Bay Area nonprofit, and the African
Braille Center

22. Case studies 1 2 3 4 5 6
Case Study: Preciss International
Location: Nairobi, Kenya
• Run by two women, Mugure Mugo and
Ivy Kimani
• Started in 2002 with 5 employees
• Types of services: online research, data
processing, subtitling, transcription
• Offers part-time work and on-site
training to university students, young
mothers and recent graduates
• Planned growth to 70-80 employees
• 30% of revenue goes to floor
employees
• In pipeline: projects between $10K and
$100K for clients in the US and UK

23. Case studies 1 2 3 4 5 6
Case Study: Oriak Digital
Location: Nairobi, Kenya
View Video >> http://www.youtube.com/watch?v=bjD97YlNhDU

24. Thank you!
Leila Chirayath
leila@samasource.org

25. Appendix 1 2 3 4 5 6
How the guiding principles were developed
Samasource spearheaded a series of conversations with many organizations from
November 2007 to July 2008 to help develop the “1.0” version of these guidelines.
They are only the beginning. In this first iteration, we left out several important
considerations, such as labor and environmental standards for service providers.
It is our hope that these principles evolve into the first fair trade system for
services.
To learn more, please visit www.sourceoutpoverty.org.
Organizations consulted
Responsible business groups Service Providers
+
Buyers
Academics
Industry
Consultants

26. Appendix 1 2 3 4 5 6
Wage differentials
BPO and IT jobs can increase incomes among the poor by as much as
90 percent
hourly average wage on oDesk
daily official minimum wage
$20
$15
$10
$5
$0
Ethiopia Ghana Kenya Niger Indonesia Pakistan Vietnam Sri Lanka
one of several
thousand Kenyan
programmers

27. SRO at samasource
Sama means “equal” in Sanskrit. We
are a social business helping bright but
marginalized people in poor regions
find dignified jobs by expanding their
access to markets.
Our method has three parts:
screen
train market
+ select

28. Appendix 1 2 3 4 5 6
Pilot results
$140K in contracts 6+ micro-businesses
data entry and website
digitization packages
image
app testing
moderation
video content
captioning updating
research virtual
assistance assistance
samasource

29. Appendix 1 2 3 4 5 6
How we do it
Samasource operates as a nonprofit social business.
Raised Earned
$37,500 $140,000
85-90% of earnings
All-volunteer staff
to directly to our
Donated hardware partners
and software
45-85% of their
Frugal to the core revenue supports
staff salaries, training,
and other costs
samasource

30. Appendix 1 2 3 4 5 6
Samasource team
Leila Chirayath Jess McCarter
CEO VP of Sales
Visiting Scholar, Stanford University Founder. Sagebit
Consultant, Katzenbach Partners Founder, RideBit
World Bank Development Research Group
Consultant, aSmallWorld.net
BA, Harvard University (African
BA, Dartmouth University
Development Studies)
Expertise: start-ups, 10 years in software
Expertise: Outsourcing, social
sales and development
enterprise, development
Henry Thairu
Kenya Program Advisor
Deputy Vice Chancellor, Jomo Kenyatta
University of Agriculture and Technology
Chairman, Kenya Council of Science and Tech
PhD, Norwegian University of Science and
Technology, Trondheim (Thermodynamics)
Expertise: Entrepreneurship,
education, technology in Africa
Advisory Board
Premal Shah Darren Berkowitz
President, Kiva Founder & CEO
Emeka Okafor Katherine Barr
Director, TED Global Partner, Mohr Davidow Ventures
Ken Banks Mohamoud Jibrell
Developer of Frontline SMS CIO, Ford Foundation