Social outsourcing is the outsourcing of services to poor communities with the aim of poverty alleviation or other development objectives.
The state government of Kerala, India, has supported the creation of IT-oriented social enterprises in its poverty eradication strategy. It also aimed to promote computerization and outsource IT activities to find skills that were not available inside the government offices. Pilot enterprises began in 1999, with a group of about 10 unemployed women from below-poverty-line households, brought together. They had to possess certain skills and be able to invest at least $30.
The Government supplied a grant of 10 times the group's investment and helped secure additional bank loans as necessary. Since then, more than 200 enterprises like this one have been formed to provide IT training, data entry, digitization or PC assembly and maintenance. An assessment of the poverty alleviation effects of these enterprises found that the women saw gains in all livelihood assets:
- They reported increased earnings averaging 43 per cent of household income (boosting their financial capital).
- All participants had gained new technical and entrepreneurial skills (human capital)
- 90 per cent of them had invested in physical capital such as gold, housing and equipment (physical assets)
- 96 per cent demonstrated improved linkages with business, community and/or institutions (social capital)
- all reported growth in self-confidence, and two-thirds reported greater respect, recognition and
acceptance in their families and communities (community standing and empowerment).[1]
In Rajasthan, India, Source for Change is an example of a enterprise that aims to be socially responsible, employing poor women in rural Rajasthan. It carries out business process outsourcing (BPO) services for clients across India and abroad. This has led to higher incomes and improved social standing for the women concerned. It aims to employ 5,000 women in rural India by the end of 2012.[2]
Other cases are found elsewhere in the Philippines (OrphanIT) and Cambodia (Digital Divide Data).[3]