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Innovative Way for Poverty Reduction? Income Generation Through Mobile Phones

By Naoko Asano Enomoto

In recent years, mobile phones have become even more popular among the poor in developing regions. Therefore, it is understandable that international organizations such as the World Bank view mobile phones as a new means for income generation for the poor. In this context, I will discuss the possibilities and challenges of job creation through mobile phones based on the article from mWomen posted February 2012.

Picture credit: IDEAS project

With the support of UKaid, World Bank’s infoDev and Nokia’s IdeasProject have launched a global partnership project called “m2Work” as of February 1, 2012. It is now opening a competition, calling for people around the globe to “shape the future of microworks and to make a difference for hundreds of thousands of potential microworkers in developing countries”. Microworks here mean the small packet of digital tasks, such as data inputting from handwritten notes.

Current microworks are mainly for those who have access to personal computers, which are expensive and really on additional infrastructure such as electricity, internet subscription and so on. Yet, m2Work aims to expand microworks to mobile phone users in developing countries, who are estimated to be approximately five billion people, by creating small digital works suitable for common cell phones. Therefore, m2Work is now waiting for ideas to create small digital jobs from February 1to April 2.  Ideas of any stage will be considered during m2Work selection process, from the very initial stage to solid enough to launch. They are offering up to US$20,000 in individual cash prizes as well as business mentorship opportunities for participants with excellent ideas. Through this competition, m2Work is encouraging a global race to innovation, and fostering global discourse centered on job creation for mobile phone users.  The grand prize winner will be announced in the summer.

This article makes me think about issues of income generation through mobile phones. Although the m2Work initiative for creating m-microworks for the poor has just launched, in the business field, we can find some business models for microworks. For example, Amazon’s mechanical turk provides meeting place where people who want to work and people or company who seeks to workforce to get some specific tasks done.

Also, if you see Task Army, you can see lots of posts from freelance workers such as drawing a cartoon portrait, making web surveys etc. In china, zhubajie(猪八戒)  is the largest sites, which offers various microworks in Mandarin.[NA1]  Within the international development community, the idea of microworks through cell phones has attracted the attention of organizations like The World Bank as an innovative method towards poverty reduction. The cartoon of m2Work (I cited above) clearly indicates microworks’ intended recipients are the global poor, using the image of an African rural woman earning “good cash” through mobile phones.  Certainly, mobile-microworks (m-microworks) could potentially allow poor entrepreneurs to earn some cash, being free from constraints of place (wherever), time (whenever) and status (whoever). However, judging from the lessons of past development policies that were based on the idea that there is a strong link between economic growth and poverty reduction we know that this link along does not mean a project will be successful.  There is certainly room for doubting m-microworks. I personally feel that the three benefits (wherever, whenever, and whoever) of m-microworks can also work for increasing the vulnerability of the poor microworkers who are potentially limited and establishing stable or reliable income.

As for the first two benefits of m-microworks, the greater flexibility in time and place makes the issue of workplace safety and compensation difficult to solve. Why so? Unlike the traditional job environment where the workplace is fixed to some extent, the workplace of m-microworks can be different for every worker. Some may do data inputting on the fishing boat while they are waiting for a school of fish, and some may fix the data order while on crowded street of Bangkok. Therefore, it is complicated to draw a fine line for where workplace begins and where it stops.  How will the worker be compensated if something happens to him/her? For example, if a worker suffers Repetitive Strain Injury, after a lot of data inputting, can this be a case for compensation?  There may be a case where employers’ and workers’ environments are across several different countries. In such a case, another challenge will certainly be, which countries’ labor laws and regulations should be applied and followed?

Moreover, it may be true that the flexibility in identification may beneficial, especially for those who have been discriminated against in employment, because of sex, race or age, for example. Yet, the loose identification can allow school-aged children to work. For instance, parents might force their children to work through mobile phones instead of going to school.  Also, the loose requirement for microworkers may raise the issue of the status of employment.  In general, jobs that require weaker identification would go to independent contractors rather than regular employees. From employers’ perspective, independent contractors require lesser legal responsibility than regular employees, and can be a cheap and convenient labor force.

To summarize, at this moment when the rights and protection for m-microworkers are not clear, the state of microworkers is still unstable, because, employers have greater discretionary power over workers. This can lead to serious labor exploitation when it comes to microworks for the poor who live on limited means and have little choice for employment. In order to make the situation envisioned by m2Work come true, not only innovative business ideas and models are needed; innovative business and work ethics must receive comparable attention and planning.

How do you see that microworks for mobile phone can potentially bring poverty reduction?

Sources:

“InfoDev taps job-creation potential of mobile phones”, article by Julia Burchell, mWomen posted on February 2012 (exact date is not specified)

http://goo.gl/x1BMx

m2Work, official website: http://goo.gl/lMPud

Outsourcing: Beyond Good or Evil

By Fatima Tuz Zahra

Outsourcing as promised. Source: goo.gl/3e3WD

The topic of discussion for this week is not novel for our ICT readers. Outsourcing is a controversial issue, more specifically “impact sourcing”, which aims to create job opportunities in the low-income countries through the creation of microworks. Microworks are small-tasks requiring low-level skills but could be time consuming and as such are outsourced to the countries that can afford cheap labor (Please refer to Naoko’s piece for details on microworks). A major question being dealt with on this topic now is if impact sourcing, which generates employment in the developing countries, takes away jobs from the developed countries.

Outsourcing to change the world?

David Bornstein, in his article, reports two opposing positions taken up by the various stakeholders for and against the expansion of outsourcing in developing countries. Currently it is estimated that by 2015 outsourcing will create 780,000 more jobs.  However the majority of Americans (around 70%) is against this prospect arguing that it will only benefit developing nations and translate to job loss in the US.   Moreover, many American consumers still consider the US to be a leading job creator globally.

Although a considerable number of people saw outsourcing as exploitation of cheap labor force, statements in support of outsourcing came from the owners of non-profits. The owners believe that the “lowest rung of outsourcing work” only benefits the very poor. It does not have a significant market and cannot bring about any difference in the economy of high-income countries like the US.

The article concludes by saying that outsourcing does not really take jobs from the developed countries and explores the possibility of creation of “domestic outsourcing”. One such endeavor is Samasource that is recently trying to replicate its impact-sourcing model in the low-income regions in the US to create employment for people living in areas with minimal infrastructures even within a developed country like the US.
 

Justifying outsourcing

Outsourcing as perceived. Source: goo.gl/icPr7

David Bornstein aims to address the charge that outsourcing potentially harms the economies of the developed countries and does so successfully. However, what is interesting to notice in the discussion is that the needs of the developed countries are seen as primary and that of the developing countries are secondary if his rationales for outsourcing or impact sourcing are to be generally acceptable. It is clear in his argument that people in the developing regions with moderate skills can have opportunities for employment only as long as those jobs do not have any demand in the developed regions.

Besides at present it may be justifiable to pay an Indian professional much less than one in the US (because of different exchange rates in the two countries). However, it is reasonable to assume that the rising cost in living around the world will see a growing pressure in the outsourcing market from the lowly paid labor force. Already companies are shifting their outsourcing cites to Pakistan (50% lower costs and over 200,000 IT graduates looking for work), Bangladesh or Vietnam from India and China as the cost of outsourcing is rising in its older and more popular sites.

Furthermore, domestic sourcing could be interpreted as another way to deal with the challenges that emerge in the outsourcing model. Samasource, looking at domestic sourcing may therefore address the risk involved in “supply chain delays, language and culture challenges, distance management, loss of intellectual capital” and so on. Most of these have been concerns for some of the current outsourcing stakeholders.

A post-modernist interpretation

The debate whether outsourcing is good or evil cannot be answered in a word or two. While impact sourcing has helped people in low-income countries through employment without threatening the economies in the developed countries only “a small part of the total retail price lands up in that country” which outsourced. Most income is drained out by the retailer, wholesaler, distribution system, research, design etc. This means that while impact sourcing may not be evil enough to harm the economies of developed countries like the US it could be argued to only minimally help the developing nations’ economy.

Perhaps the most important reason impact sourcing has gained impetus in the globalized market is because it provides cheap human resources. Looking from a post-modernist perspective it can be understood that meta-narratives such as the nations no longer hold true in the globalized market economy. In addition to the resources required, the processes of productions are no longer dependent on the borders of nation states but solely on the operations and needs of the multinational corporations.

The current market of impact sourcing or future growth of domestic sourcing will be dictated by the needs of the corporations (which is the needs of capital) rather than the nation (which ideally articulates the needs of citizens). The corporations will decide who will receive most of the outsourced work and who will benefit from it depending on who can provide the cheapest labor, thereby reducing production costs.

As an end point, I would posit that the 780,000 jobs that are estimated to be created by 2012 by impact sourcing will not drastically affect the global economy. However, it will still be interesting to see if outsourcing will support workers from the low-income backgrounds more effectively or will it, as is often argued, function as another mechanism for exploitation.The people in the developing countries expect to get employment and better salaries from working in outsourcing firms. The natural consequence of such expectations are that they learn English and computer skills to operate in the field. However, as we can see there is a gap in expectation and the outcome of the education and employment. The microworkers do not get paid as much they would like to get paid. Then the question is whether  a larger section of people in developing countries should still spend long time on learning English and outsourcing skills!

Sources:

Outsourcing is Not (Always) Evil on November 8, 2011 The New York Times Opinionator goo.gl/ZWoBt

Outsourcing: Where’s Uncle Sam? Retrieved from goo.gl/3LtAC

The future of outsourcing: Impact on jobs Retrieved from goo.gl/Tpp43

Samasource goo.gl/PmWMt

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