Outsourcing as Social Enterprise

This isn't necessarily practical from a standard viewpoint, but it is practical from a social point of view. A firm in Phnom Penh is offering digitization services to organizations in the US, the UK, India, Iran, Laos and Mongolia. Just another company providing labor more cheaply than the next offshore location? Actually, no. According to “The Outsourcing Dilemma,” published by The Harvard Business School Online, Digital Divide Data was formed as a “social enterprise.” According to founder Tim Keller, “DDD is a social enterprise that operates a bit like a co-op. Profits generated from data entry services are funneled into scholarships, healthcare and continued training.” The only people who get jobs at DDD are the most disadvantaged — those disabled by disease or land mines, ex-prostitutes or otherwise impoverished.

The article includes a discussion of a calculation called the “Social Return on Investment” (SROI), which helps to understand the value of this outsourcing situation from a new perspective:

Estimate that one in four urban Cambodian prostitutes have a lethal STD. Next estimate that the average prostitute my spread this STD to at least 20 people per year who then spread the disease to one additional person each, totaling 40 people now infected with a lethal STD annually and who will die prematurely. Now consider that the average prostitute works for three years and you arrive at a total of 120 people now likely to die because of one person's activities. When DDD hires 60 trafficked women, the math adds up to 1,800 lives saved! That means that a $33 investment for DDD results in one life saved. This is an impressive SROI, and it doesn't even consider the increase in standard of living, education, earnings power, and health care that come with DDD employment.

Domestically, we lose jobs — no doubt about it. Socially, however, we gain something else worthwhile.