Venturing into New Territory: Impact Sourcing in Zambia
Zambia is not a country that comes to mind when we think about new frontiers for disruptive technology. But amidst the recent trend of foreign direct investment flowing into startups based in Silicon Savannah, Africa’s Silicon Valley, Zambia may be the ideal location for entrepreneurs.
We had the chance to speak with Dimitri Zakharov, the co-founder and CEO of Impact Enterprises, an outsourcing technology services firm based in Zambia. Mr. Zakharov’s perspective illustrates how Impact Enterprises navigates the challenges of operating a startup in Zambia’s developing economy. “Fast, broad changes are scary in an environment where there are such thin safety nets”. With high youth unemployment, the repercussions of risky disruption could do more harm than good for Zambia.
According to the 2016 World Bank Doing Business report, Zambia ranks 97th out of 189 economies in the world for ease of doing business. It’s ranked behind Rwanda but ahead of the regional average for Sub-Saharan Africa. Prior to Impact Enterprises, the founders spent time in Eastern Zambia where they recognized the opportunity to grow the local economy by engaging the community through employment and technical skills training. Impact Enterprises connects talent in Africa with Western firms looking for competitive rates in IT services.
“We define ourselves as a social enterprise first. Our mission is to provide valuable jobs for African youth. In Zambia, we’ve found a great way of doing that is through outsourcing, but there’s certainly other ways. The decisions we make ultimately have to benefit our community. That’s why we started the company and that’s what drives our employees day in and day out.”
Impact Enterprises offers two interdependent lines of business. The first is revenue-generating and provides tech firms with services such as lead generation, content moderation, data entry, etc. The second provides education and technical training for local Zambian staff. An internal survey found that the most significant skills the staff picks up are not tech related — instead, Impact Enterprises provides life skills. As one employee reported, “I now understand how to survive in a corporate world”. This holistic training is one method of delivering impact sourcing jobs to unemployed or underemployed economies.
The impact sourcing business model has been championed by leaders in the philanthropic world, such as the mission-driven Rockefeller Foundation. Impact sourcing addresses the lack of employment opportunities by providing tech jobs to communities that have traditionally been excluded from this industry. From Mr. Zakharov’s perspective, Impact Enterprises’ role is a stepping stone for the employees’ future careers. There are limited managerial positions available for the entry-level hires to be promoted to in this three-year-old company. As such, there is little transition to a formal career in tech for Zambian youth. For that, they would have to look to the startup communities across the continent in Lagos or Nairobi. They would have to leave their homes and contribute to the increasing technology gap between African nations.
Despite the systemic challenges Zambia must overcome to establish a tech-based economy, Mr. Zakharov has positive expectations for impact sourcing’s potential in Zambia and Africa as a whole. He notes that in the context of having Africa’s post-colonial history shaped solely by its leaders, disruption to the status quo could democratize the way Africa’s narrative is written. “Technologies can solve problems and leapfrog traditional investment pathways … we can see progress in ways that 60 years of top-down administration hasn’t been able to deliver.”
On the flip side, the majority of Zambian families rely on the relative stability of mining and agriculture industries. Mr. Zakharov recognizes this vulnerability that is exposed when breaking from tradition. “We especially want them to decide what they’re learning in our workshops and discovering their own strengths and weaknesses. Ultimately, our Zambian operations have to be led by Zambian values.”
In the coming years, foreign and local-based ventures will assume the responsibility of building the infrastructure for the continent’s tech communities. The growing number of companies that decide to establish their business in Africa will need to identify first and foremost as a social enterprise in order to succeed. And success to entrepreneurs is the chance to not only disrupt the norm but to recreate and improve conditions that challenge the traditional way of doing business. Firms like Impact Enterprises are pioneering the movement to create the new (and improved) norm for Africa.
