The poverty cycle is almost impossible to break. Responsible IT outsourcing can help.

There can be an upside to IT outsourcing.

35 times since the election, Donald Trump has tweeted about jobs, jobs, jobs — specifically about bringing jobs back to the US. His recent comments against IT outsourcing are particularly troubling, because I am trying to start an IT outsourcing company.

An outsourcing conversation would be a heated debate in ‘normal times’. But in the era of the president’s quick twitter finger and when everything is either GREAT or SAD, we’re unfairly getting miscategorized.

Traditionally, there are two sides to the debate. If you work in IT at a mid-sized or large company, your job has likely been impacted by outsourcing, and competition for any open positions has increased.

On the other hand, if you are an IT manager with a budget to meet, you probably see some of the merits of outsourcing.

There is a third side to the debate that hasn’t been talked about enough, which is known as impact sourcing.

Impact sourcing, or socially conscious outsourcing, differs from general outsourcing in its mission. It is still about providing cheaper labor, but the primary objective is to help people break out of the cycle of near poverty.

And the poverty rate in Costa Rica is about 22% (vs 14% in the US), which is where our story begins.


Costa Rica

After 16 years of primarily IT consulting, I stepped away from the workforce six months ago and moved my family to a quiet beach town in Costa Rica.

We have been enjoying the slow pace and warm beaches, but it doesn’t take long to notice the poor and underprivileged families living literally in the shadows of million dollar mansions with ocean views.

It’s a tourist town of about 4,000, so the employment opportunities are limited: waiter/waitress, tour guide, and surf instructor. The challenge unique to a tourist town in a 3rd world country is that the price tags are for tourists, while the pay checks are for locals. How can a local afford the price tags?

For example, we pay $3.96 for a gallon of milk, which is about the same as in L.A. Meanwhile the minimum wage in Costa Rica for a skilled worker is about $2.50 per hour.

Our house has air conditioning and a pool, but just down the road some have dirt floors, no windows, and no indoor plumbing, just steps from the ocean.

With this disparity in mind, my friends in the fashion industry recently started a sewing school. Instead of having their garments produced in China, they empower local women by teaching them marketable skills, paying good wages, and will produce their garments locally.

They teach a (wo)man to fish, and then buy each evening from the new fishmonger.

I wondered if I could do something similar. Could I find neighbors lacking any real opportunities to improve their standard of living (yes), teach them marketable software skills that can be applied remotely (yes), and pay them good wages (yes) while offering American corporations a relatively low rate for first tier service and development?

Yes, as it turns out, and it has been done before with success.


Impact Sourcing

The concept of impact sourcing has been around since 2001, when Jeremy Hockenstein had the same realization I have had, but in Cambodia, and started started Digital Divide Data (DDD). 16 years later, and DDD has graduated thousands of students through its program, where they go on to earn three to four times the average salary in the region where they live.

Samasource has been an Impact Sourcing pioneer.

The model has been proven to work, as headliner clients like Walmart, Microsoft and Google are using impact sourcing in their business. The Rockefeller Foundation started an initiative to promote digital jobs in Africa with impact sourcing. Estimates from a couple years ago predicted that impact sourcing could become a $50 billion market sector.

Impact Sourcing Service Providers (ISSPs) like Samasource began in 2008 and has employed 8000 in Kenya, Uganda, India and Haiti. RuralShores provides work in smaller Indian villages that are at least three hours from a large city. Arbusta was started three years ago in Latin America and focuses on testing and data management. ImpactHub plays matchmaker — linking businesses looking to outsource responsibly with the different ISSPs around the world. And CloudFactory launched six years ago at TechCrunch Disrupt.


Poverty is a bitch

If you’ve been personally impacted by outsourcing, I don’t expect to change your mind. Why does someone in another country deserve a job more than you? They don’t.

But poverty is life challenge unlike many others. Recent stories by On the Media and later featured on RadioLab highlight how difficult it is to break out of poverty if you were born into it. They bust a few of the common misconceptions about poverty, such as: poverty stems from a lack of will power and a poor work ethic. Fake News!

The cycle of poverty is difficult to break without outside influence. Fortunately, technology has become a tool that makes it easier to be that influence. Much IT work can be done remotely, and in fact, IT outsourcing to India alone has become a $140 billion industry. We can kill two birds with one stone by continuing to shifting more of that work to socially conscious ISSPs.

It is a challenge to market our new business — that essentially moves jobs away from the US — in a time of surging nationalism. But if you take a minute to learn more about impact sourcing and companies like Upsource, you’ll understand that there can be more than two sides to every story.

I don’t know if we’ll change the president’s mind. But hopefully we can change yours.