The Nexus of Microwork and Impact Sourcing- Implications for Youth Employment
Global Center for Youth Employment & Banyan Global
Youth unemployment remains a major development challenge around the world. Many developing economies simply cannot create enough jobs to absorb the new entrants into the labor market every year, especially when those individuals are low-educated youth. At the same time, in developed and emerging markets, technological advances are destroying more than 7 million entry- and mid-level jobs over the next 5 years, as predicted in a recent study by the World Economic Forum.
Young people living in marginalized areas often lack skills, credentials, and connections, and face significant constraints to secure even the existing formal employment opportunities. Meanwhile, internet access is spreading at an incredible rate and an increasing number of young people are using internet-enabled phones. According to the most recent World Development Report, which focused on digital technology and its potential for global development, the number of internet users has more than tripled since 2005, with an estimated 3.2 billion people using the internet in 2015.
While business process outsourcing (BPO) is an established practice, in recent years companies have sought ways to capitalize on the increasing global digital connectivity in a further effort to reduce costs, manage and process ever-increasing amounts of data,
and retain quality business outcomes. Online, or virtual, outsourcing has emerged as a business practice of contracting a third-party provider (often in a distant country) to supply products or services that are delivered and paid via internet. Those virtually
contracted suppliers can be individuals (“e-lancing”), online communities (“crowdsourcing”), or firms.
Microwork is a segment of online outsourcing where projects or complex tasks are broken into simple tasks that can be completed in seconds or minutes. Workers require numeracy and understanding of internet and computer technology, and advanced literacy, and are usually paid small amounts of money for each completed task. Therefore, online outsourcing could contribute to addressing the challenge of unemployment even for low-educated youth in developing economies, by increasing
their access to the global marketplace and creating income generating opportunities for
young workers over the internet
Impact sourcing, also known as socially responsible outsourcing, is a business practice in which companies outsource to suppliers that employ people at the base of the pyramid. It is believed that utilizing microwork within an impact sourcing strategy has the potential to create additional jobs for disadvantaged youth and disconnected, vulnerable populations and to provide them with income opportunities they need to support themselves and their families. It is hypothesized that if microwork is utilized as a tool to reduce youth unemployment it will have a butterfly effect and empower marginalized people to better feed, clothe, educate, and care for themselves and their families. While proponents of microwork believe it can equip workers with skills and experience that can enable them to increase their individual employability regardless of gender, age, socio-economic status, previous levels of employment, or physical ability, it is not always intentionally aimed at vulnerable populations. Only when buyers adopt impact sourcing as their business strategy does microwork directly benefit the most disadvantaged.
This study specifically focuses on the opportunities, challenges, and promising practices of microwork, within an impact sourcing business strategy. The cases where microwork and impact sourcing intersect, and the resulting potential for social impact, have not yet
been rigorously evaluated for long-term effects, particularly on the growing problem of youth unemployment. This study has explored the nexus of microwork and impact sourcing in order to further our understanding of the potential for leveraging a combination of these approaches in efforts to safely and equitably reduce youth unemployment.