Feeds:
Posts
Comments

Archive for the ‘economic empowerment’ Category

Our Tech Salon on Thursday March 9th focused on the potential of Microwork to support youth economic empowerment. Joining us as lead discussants were Lis Meyers, Banyan Global; Saul Miller, Samasource; and Elena Matsui, The Rockefeller Foundation. Banyan Global recently completed a report on “The Nexus of Microwork and Impact Sourcing: Implications for Youth Employment,” supported by the Global Center for Youth Employment and RTI, who also sponsored this Salon. (Disclosure: I worked on the report with the team at Banyan)

Definitions: To frame the discussion, we provided some core definitions and an explanation of the premise of microwork and its role within Impact sourcing.

  • Business Process Outsourcing (BPO): the practice of reducing business costs by transferring portions of work to outside suppliers rather than completing it internally.
  • Online Outsourcing: Contracting a third-party provider (often in a different country) to supply products or services that are delivered and paid for via the Internet. The third party is normally an individual (e-lancing), an online community(crowdsourcing) or a firm.
  • Microwork: a segment of online outsourcing where projects or complex tasks are broken into simple tasks that can be completed in seconds or minutes. Workers require numeracy and understanding of internet and computer technology, and advanced literacy, and are usually paid small amounts of money for each completed task.
  • Impact sourcing: (also known as socially responsible outsourcing), is a business practice in which companies outsource to suppliers that employ individuals from the lowest economic segments of the population.

The premise: It is believed that if microwork is done within an impact sourcing framework, it has the potential to create jobs for disadvantaged youth and disconnected, vulnerable populations and to provide them with income opportunities to support themselves and their families. Proponents of microwork believe it can equip workers with skills and experience that can enable them to enhance their employability regardless of gender, age, socio-economic status, previous levels of employment, or physical ability. Microwork is not always intentionally aimed at vulnerable populations, however. It is only when impact sourcing is adopted as the business strategy that microwork directly benefits the most disadvantaged.

The ecosystem: The microwork industry includes a variety of stakeholders, including: clients (looking to outsource work), service providers (who facilitate the outsourcing by liaising with these clients, breaking tasks down into micro tasks, employing and managing micro workers, and providing overall management and quality control), workers (individual freelancers, groups of people, direct employees, or contractors working through a service provider on assigned micro tasks), donors/investors, government, and communities.

Models of Microwork: The report identifies three main models for microwork (as shown below); micro-distribution (e.g., Amazon Mechanical Turk or CrowdFlower); the direct model (e.g., Digital Divide Data or iMerit) and the indirect model (e.g., Samasource or Rural Shores).

 

Implementer Case Study. With the framework settled, we moved over to hearing from our first discussant, from Samasource, who provided the “implementer” point of view. Samasource has been operating since 2008. Their goal is to connect marginalized women and/or youth with dignified work through the Internet. The organization sees itself as an intermediary or a bridge and believes that work offers the best solution to the complex problem of poverty. The organization works through 3 key programs: SamaSchools, Microwork and SamaHub. At the Samaschool, potential micro workers are trained on the end-to-end process.

The organization puts potential micro workers through an assessment process (former employment history, level of education, context) to predict and select which of the potential workers will offer the highest impact. Most of Samasources’ workers were underemployed or unemployed before coming to Samasource. At Samaschool they learn digital literacy, soft skills, and the technical skills that will enable them to succeed on the job and build their resumes. Research indicates that after 4 years with Samasource, these workers show a 4-fold increase in income.

The organization has evolved over the past couple of years to opening its own delivery center in Nairobi with 650 agents (micro workers). They will also launch in Mumbai, as they’ve learned that hands-on delivery center. Samasource considers that their model (as opposed to the micro-distribution model) offers more control over recruitment and training, quality control, worker preparation, and feedback loops to help workers improve their own performance. This model also offers workers wrap-around programs and benefits like full-time employment with financial literacy training, mentorship, pensions and healthcare.

In closing, it was highlighted that Impact measurement has been a top priority for Samaource. The organization was recently audited with 8 out of 9 stars in terms of quality of impact, evidence and M&E systems. Pending is an RCT that will aim to address the counterfactual (what would happen if Samasource was not operating here?). The organization is experiencing substantial growth, doubling its revenue last year and projecting to grow another 50%. The organization achieved financial sustainability for the first time in the last quarter of 2016. Growth in the industries that require data processing and cleaning and the expansion of AI has driven this growth.

Questions on sustainability. One participant asked why the organization took 8 years to become sustainable. Samasource explained that they had been heavily subsidized by donors, and part of the journey has been to reduce subsidies and increase paid clients. A challenge is keeping costs down and competing with other service providers while still offering workers dignified work. As one of our other discussants noted, this is a point of contention with some local service providers who are less well-known to donors. Because they are not heavily subsidized, they have not been able to focus as much on the “impact” part.

For Digital Divide Data (DDD), who was also present at the Salon, the goal was not quickly getting to profit. Rather the initial objective was social. Now that the organization is maturing it has begun thinking more about profitability and sustainability. It remains a non-profit organization however.

Retention and scale. Both Samasource and DDD noted that workers are staying with them for longer periods of time (up to 4 years). This works well for individual employees (who then have stable work with benefits). It also works well for clients, because employees learn the work, meaning it will be of higher quality – and because the BPO industry has a lot of turnover, and if micro workers are stable it benefits the BPO. This, however, is less useful for achieving scale, because workers don’t move through the program quickly, opening up space for new recruits. For Samasource, the goal would be for workers to move on within 2 years. At DDD, workers complete university while working for DDD, so 4 years is the norm. Some stay for 6 years, which also impacts scaling potential. DDD is looking at a new option for workers to be credentialed and certified, potentially through a 6 month or 1-year program.

The client perspective. One perspective highlighted in the Banyan report is the client perspective. Some loved microwork and impact sourcing. Others said it was challenging. Many are interested in partnering with microwork service providers like iMerit and Daiprom because it offers more data security (you can sign an NDA with service provider, whereas you can’t with individual workers who are coming in through micro-distribution and crowdsourcing). Working with a service provider also means that you have an entity that is responsible for quality control. Experiences with service providers have varied, however, and some companies had signed on to jobs that they were unprepared to train workers on and this resulted in missed deadlines and poor quality work. Clients were clear that their top priority was business – they cared first about quality, cost, and timeliness. “Impact was the cherry on top,” as one discussant noted.

The worker perspective. An aspect missing from the study and the research is that of worker experiences. (As Banyan noted, this would require additional resources for a proper in-depth study). Do workers really seek career growth? Or are they simply looking for something flexible that can help them generate some income in a pinch or supplement their incomes during hard times. In Venezuela, for example, the number of micro workers on CrowdFlower has jumped astronomically during the current political and economic crisis, demonstrating that these type of platforms may serve as supplemental income for those in the most desperate situations. What is the difference in what different workers need?

One small study of micro workers in Kenya noted that when trying to work on their own through the micro-distribution model, they had major challenges: they were not able to collect electronic payments; they got shut out of the system because there were several youth using the same IP address and it was flagged as fraud; language and time zones affected the work was available to them; some companies only wanted workers from certain countries whom they trusted or felt could align culturally; and young women were wary of scams and sexual harassment if accessing work online, as this was their experience with work offline. Some participants wondered what the career path was for a micro worker. Did they go back to school? Did they move ahead to a higher level, higher paying job? Samasource and DDD have some evidence that micro workers in their programs do go on to more dignified, higher paying, more formal jobs, however much of this is due to the wraparound programming that they offer.

The role of government was questioned by Salon participants. Is there a perfect blend of private sector, government and an impact sourcing intermediary? Should government be using micro workers and purposefully thinking about impact sourcing? Could government help to scale microwork and impact sourcing? To date the role of government has been small, noted one discussant. Others wondered if there would be touch points through existing government employment or vocational programs, but it was pointed out that most of the current micro workers are those that have already fallen through the cracks on education and vocational training programming.

A participant outlined her previous experiences with a local municipality in India that wanted to create local employment. The contracting process excluded impact sourcing providers for inexplicable reasons. There were restrictions such as having been in operation for at least 3 years, having a certain minimal level of turnover, number of employees in the system, etc. “So while the government talked about work that needed to be digitized and wanted rural employees, and we went on a three year journey with them to make it inclusive of impact sourcers, it didn’t really work.”

What about social safeguards? One Salon participant raised concerns about the social services and legal protections in place for micro workers. In the absence of regulations, are these issues being swept under the carpet, she wondered. Another noted that minimum standards would be a positive development, but that this will be a long process, as currently there is not even a standard definition of impact sourcing, and it’s unclear what is meant by ‘impact’ and how it’s measured.

This is one area where government could and should play a role. In the past, for example, government has pushed procurement from women-owned or minority owned businesses. Something similar could happen with impact sourcing, but we need standards in order for it to happen. Not all clients who use micro workers are doing it within a framework of impact sourcing and social impact goals. For example, some clients said they were doing “impact sourcing” simply because they were sourcing work from a developing country. In reality, they were simply working with a normal BPO, and so the risk of “impact washing” is real.

Perhaps, noted another participant, the focus should be on drumming up quality clients who actually want to have an impact. “A mandated standard will mean that you lose the private sector.” Some suggested that there would be some type of a ‘certified organic’ or ‘good housekeeping’ seal of approval from a respected entity. Some felt that business were not interested and government would never move something like this. Others disagreed, saying that some large corporation really wanted to be perceived as ethical players.

Definitions proved a major challenge – for example at what point does an ‘impact worker’ cease being an impact worker and how do you count them? Should someone be labeled for life as an impact worker? There was disagreement in the room on this point.

A race to the bottom? Some wondered if microwork was just the same re-hashing of the ‘gig economy’ debate. Would it drive down prices and create extremely unstable work for the most disadvantaged populations? Were there ways that workers could organize if they were working via the micro-distribution model and didn’t even know where to find each other, and if the system was set up to make them bid against each other. It was noted that there was one platform that had been identified that aimed to support workers on Amazon Mechanical Turk, that workers there helped each other with tips on how to get contracts. However as with Uber and other gig economy players, it appeared that all the costs for learning and training were then being pawned off onto the workers themselves.

Working through the direct or indirect models can help to protect individual workers in this aspect, as Samasource, for example, does offer workers contracts and benefits and has a termination policy. The organization is also in a position to negotiate contracts that may be more beneficial to workers, such as extending a 3-week contract with lots of workers over a longer period of time with fewer workers so that income is steadier. Additionally, evaluations have shown that these jobs are pulling in workers who have never had formal jobs before, and that there is an increase in income over time for Samasource workers.

What can donors do? Our third discussant noted that the research is mixed in terms of how different kinds of microwork without any intermediary or wraparound services can actually build a career pathway. Some who are active in the space are still working hard to identify the right partnerships and build support for impact sourcing. It has been difficult to find a “best of breed” or a “gold standard” to date as the work is still evolving. “We’re interested in learning from others what partners need from donors to help scale the work that is effective.” It’s been difficult to evaluate, as she noted, because there has been quite a lot of secrecy involved, as often people do not want to share what is working for fear of losing the competitive edge.

What does the future hold? One Salon participant felt that something very bold was required, given how rapidly economies and technologies are changing. Some of the current microwork will be automated in the near future, he said. The window is closing quickly. Others disagreed, saying that the change in technology was opening up new growth in the sector and that some major players were even delaying their projections because of these rapid shifts and changes in robotics and automation. The BPO sector is fickle and moves quickly – for example voice has shifted rapidly from India to The Philippines. Samasource felt that human components were still required to supplement and train AI and DDD noted that their workers are actually training machines to take over their current jobs. It was also noted that most of the current micro workers are digital natives and a career in data entry is not highly enticing. “We need to find something that helps them feel connected to the global economy. We need to keep focused on relevant skills. The data stuff has a timestamp and it’s on its way out.” DDD is working with universities to bring in courses that are focused on some of the new and emerging skills sets that will be needed.

Conclusions. In short, there are plenty of critical questions remaining in the area of microwork, impact sourcing and around the broader question of the future of youth employment at the global level. How to stay abreast of the rapid changes in economy, business, and technology? What skill sets are needed? A recent article in India’s Business Standard notes constant efforts at re-skilling IT workers. These question are facing not only ‘developing countries’ but the US is also in a similar crisis. Will online work with no wraparound services be a stopgap solution? Will holistic models be pushed so that young people develop additional life skills that will help them in the longer term? Will we learn how to measure and understand the ‘impact’ in ‘impact sourcing?’ Much remains to explore and test!

Thanks to the Global Center for Youth Employment and RTI for supporting this Salon, to our lead discussants and participants, and to ThoughtWorks for hosting us! If you’d like to join us for a future Technology Salon, sign up here!

 

 

 

 

 

Read Full Post »

IMG_5689Technology Salon Helsinki kicked off as part of Slush, a fantastic start-up and technology event that takes place with about 10,000 people every Fall in the Finnish capital. Slush added a social impact stream for the first time this year, making it a good fit for Technology Salon. Plan Finland organized the Salon and Netlight hosted.

Our topic for this Salon was broad – how can technology increase social impact? – but lead discussants (Jussi Hinkkanen of Fuzu, René Parker from rLabs, and Mika Valitalo of Plan Finland) brought inspiring personal stories, fundamental questions, practical experiences, challenges and questions that made for an intimate and lively conversation that incorporated expertise from everyone in the room.

The discussion raised a number of key points for social impact start-ups and those working in the development space:

1. Making a direct contribution to social impact is a prime motivator. Most people in the room who considered themselves to be entrepreneurs or who felt they were working with a ‘start-up’ or ‘social innovation’ mentality had tried different pathways before landing on their current one, yet had found them unsatisfying due to bureaucracy, lack of agility, unsustainable efforts, systems not based on merit, and feelings of not being able to input into or control decisions. “Do I want a job where I’m comfortable, well-paid and getting accolades for the supposed social good I’m doing, but where I know I’m not having any real impact, or do I want to be somewhere that I’m paid less but I’m actually doing something worthwhile?” summed up one participant.

2. It’s not clear how to best achieve social impact at scale. There was some disagreement in the room regarding whether it was better to work outside of the system to avoid the above-noted problems with corporate social responsibility efforts, governments, multi-laterals and international development agencies, or whether it was imperative to work with those institutions in order to achieve longer-lasting impact at scale. Questions were also raised about what is meant by scale. If we help communities to demand better government services through some kind of innovative approach, that can also lead to a scaled impact and more resources and social good coming into a community, even though the scaled impact is not so directly attributable. The big question is how to achieve scale yet remain locally relevant and contextually sensitive.

3. Keeping a social impact focus is a challenge. It’s critical to think about both social impact and sustainability from the very beginning, participants agreed. A social impact start-up, like any business, needs to pay salaries and other costs, so it needs a good business model that brings in enough revenue. “If you do not show revenue and growth, you will drive off investors,” said others, “and then your start-up won’t grow.” Yet those in the lowest income bracket will not have the highest capacity to pay for services, and donors often have policies prohibiting them from funding profit-building entities, even if they start off as non-profits. Ensuring that investors have a social impact motivation so that the mission of the start-up does not skew as it grows can also be a challenge. This area is being somewhat addressed by ‘social impact investing’ however, “as a start-up entrepreneur,” said one participant, “you know that next phase investors don’t like it if you have an impact investor already on board, so that makes it difficult to get further funding.” This all poses real challenges for start-ups.

4. Social good is in the eye of the beholder. Everyone will say that their company is values-based and that it’s ‘doing good’ but who decides on and judges the social function of a company? “Maybe one way is to see if it motivates Generation Y,” said one participant. Another pointed out that one company might be doing something that is perceived as ‘socially good’, but it might have a very small impact. Whereas another company might be doing something not perceived as ‘socially good’ (say, selling clothing) yet it has embedded strong values, good business ethics, pays workers well with good benefits, doesn’t pollute the environment and contributes to local economic growth in a large way. People won’t think of the second company as doing social good even if its social impact is greater than the first company. The idea of social impact is largely in the mind of the beholder, concluded one person, it’s in the psyche.

5. Staying true to social impact values in the long-term is difficult. As one discussant noted, keeping the social impact mindset requires constant consideration as to whether you are doing good with and for your employees, but you also need to ask the community that you are serving what they think. “It’s easy to say you are doing social good, but if you go directly to ask people in the community whether your initiative is doing what it says and if it’s having a good impact, you’ll see it’s not easy. When an investor comes along who wants to change things, you always have to go back to look at who you are, how you started, how a particular change will impact the organization, and how it will impact on the thousands of people who rely on you.”

6. A sustainable business model helps bring autonomy according to one discussant. A start-up can remain agile and make its own decisions if there are no donors or external funders. Having its own sustainable revenue stream will allow it to stay true to its vision and to community needs, or at least provide enough to cover staff and operations costs. However, partnership and collaboration are key. “You have to work with other people whether you like it or not. If you are working as a social impact start-up, you’ll need to partner with those already working in the community, and work with everyone to bring in their part. Just because there is a community out there somewhere, you can’t assume that they don’t know what is happening or that they don’t know anything. You need to partner with these local groups and work with the existing community context and structures.”

7. An innovative business model trumps innovative technology. Many of the places where non-profits are working and where people may think about ‘social good’ start-ups are those where the market doesn’t work and people have very few resources. Yet these are the very people we want to support the most in terms of social impact, said one discussant, so how can we do it? Targeting solutions and payment for different parts of the markets might be one way, for example, offering a solution to the segment of the market that can pay and in that way extending the services to those who cannot pay. “The most innovative thing here is the business model, not the technological solution,” advised another person. “And if you really listen to people and you build according to people’s needs, you may uncover needs as well as new markets and business models.” Your services will need to keep evolving over time, however, as people’s needs and the context changes. “You need to go there and spend time with people in order to deeply understand their needs, their contexts and their behaviors.”

8. People won’t think like you think. Another participant quoted activists in the disability movement “Nothing about us without us,” saying that start-ups should follow that mantra also. All the really bad examples of NGO, government, development or corporate failures have been when people are looking top-down or outside-in, she said. “When you think ‘since those people are poor, they have nothing, they will really want this thing I’m going to give them,’ you will fail,” she added. “People everywhere already have values, knowledge, relationships, things that they themselves value. This all impacts on what they want and what they are willing to receive. The biggest mistake is assuming that you know what is best, and thinking ‘these people would think like me if I were them.’ That is never the case.”

9. There is space for various approaches. You won’t want one single product or service to monopolize, said one person. “There are roles and limitations for different entities in any community. There are some non-income generating things that can and need to happen, and that is actually fine. It used to be a charity and welfare mentality, but now we think markets will solve everything. Neither extreme is correct. We need to have space for various partners and efforts.” At the same time, there needs to be space for different partners at different stages in time. It is important for the various partners to understand what their role is. Emergency support is good in an immediate post-conflict stage, for example, but then humanitarian organizations need to step aside and open space for other actors when a community or country moves to a more stable development and growth period.

10. It’s difficult to find investors for social impact in ‘the South.’ The perceived risk in investing in start-ups that want to ‘go South’ or start-ups already based in ‘the South’ makes it hard to find investors. “Finnish investors are myopic,” said one person. “Finland has already provided examples of how companies can access these new opportunities and also have a social impact. Spending power has skyrocketed in some countries. If investors looked properly, they would see the potential of making more money in some of these vast markets than they can in Europe or Finland,” noted another person. The risk is indeed greater due to various elements in some of these countries, added one person. “It’s like courtship – you can’t go after people who are not in your league or not right for you. But if you find the right investor who understands the risk as well as the significant potential returns, it can be a great marriage.”

11. NGOs and start-ups can be great partners. They can come up with ideas from scratch, or they can partner later in the process. NGOs can take advantage of start-up applications and services, whereas the start-ups can find new customers, build a portfolio, do field-testing and get feedback on what to improve with their idea. In addition the two have a lot to teach each other, said one discussant. “NGOs can learn a lot from start-ups about how to operate. They should be learning how to think about iterative improvements, pivoting and changing quickly, failing fast and learning fast.” Start-ups can also learn from NGOs. “Some NGOs are quite good at participatory practices, knowing the community well, collaborating at multiple levels with various stakeholders, communities and governments.” In addition, community-based organizations know the community very well and often work together well with start-ups and NGOs.

12. Pacing and timing can make collaboration tricky. The pacing in these different organizations and partners is quite different, however, and that causes friction and frustration. But even large multi-lateral agencies can be helpful for start-ups who want to gain entry into different countries or communities because they are well-known and because they can provide an ethical and legal framework that helps protect the start-up from making big mistakes due to a lack of understanding of these key elements. NGOs can also serve as a kind of infrastructure upon which to build start-up efforts. Lack of NGO and donor agility however sometimes causes efforts to fail. Hybrid models of funding that can enable start-up-NGO collaboration are needed. One discussant emphasized the importance for start-ups to generate their own funding on the one hand while seeking donor funds for some things too, but never doing anything for a donor that is not part of the organizations core mission.

13. You need to lose the ego. In every sector, egos and brands get in the way of social impact. Start-up founders have egos too, and the start-up personality may often be one that wants the spotlight, or in order to obtain funding the start-up may need to act in a particular way, and this can be detrimental. “For social impact work, we need to think about catalyzing something, not being the center of it. We need to help bring snowballs to the top of the hills, and then let them roll down on their own without branding,” recommended one participant. “We hear that 60% of mHealth initiatives die before they thrive. They are isolated, with little connection and interface with one another. We need more platforms and sharing, less egos and brands.”

IMG_5690Next Technology Salon Helsinki. Plan Finland is hoping to continue convening in Helsinki. If you are interested, sign up to get invitations at Technology Salon!

I’d also recommend attending Slush next year – especially if you like high energy, high-tech, Helsinki and lasers! I’m sure next year’s impact stream will be as good or even better than this year.

Thanks again to Plan for convening and sponsoring the first Salon, to Slush for including it as part of their Social Impact Stream, and to Netlight for hosting at their beautiful offices!

Read Full Post »

We looked at the role of mobiles in youth financial inclusion at our March 11th Technology Salon in New York City. Tim Nourse, Making Cents; Peter Goldstein, Intermedia; and Jamie Zimmerman, Bankable Frontier Associates; joined as lead discussants.

Though mobile financial services are seen by many as inevitable, some Salon participants felt that, like in so many other ‘mobiles for xxxx’ areas, we were long on enthusiasm and short on evidence and successful examples. Are we just too early in the game, as with so much of ICT4D? Emerging research on youth demand for mobile financial services may help answer some of those questions, but many other questions remain.

What do we mean by youth financial inclusion?

The Salon started with a quick overview of the terms “financial inclusion” and ‘youth.’ One lead discussant emphasized that the idea of ‘youth’ is context specific. According to the UN, “youth” are people between 15 and 24 years old, though in many countries this can extend to age 30 or 35. Segmentation within this wide age range is important when designing programs because of varying needs, demands, and concerns within age subsets. Using a gender lens is also critical, because young women and young men have different needs, concerns, barriers, interests and experiences. Cultural norms about girls’ and young women’s access to and use of assets and resources, financial services, and mobiles also come into play and need to be well-understood. When discussing youth financial inclusion, it’s useful to talk about the age ranges of 15-17 and 18-24, because in most countries 18 is the legal age at which youth can enter into a formal financial system, sign contracts, and purchase a SIM card in their own name. Program design, challenges faced, and workable business models may look quite different for these two age groups.

The term ‘youth financial services’ includes a full range of services (credit, savings, insurance, money transfer and payments) that help youth build assets. In other words, financial services go far beyond mobile money transfers. Most youth in developing nations are engaged in some kind of livelihood or education, and access to financial services can help them achieve goals in both arenas. It is important to reach youth with financial education when they are adolescents, as they are more inclined to form good habits if they are engaged early on. Availability of services at specific transition points in youth’s lifecycles when they are making serious decisions is another key to establishing good long-term financial habits. It can be difficult, however, to convince banking institutions to develop a menu of financial services for youth because few successful business models exist for youth-focused financial products and services. Savings, account balances and demand for credit tend to be lower among youth, so serving the youth market profitably can be difficult. Strategic rationales and successful business cases around expanded access to youth financial services are needed.

Emerging guidelines for good practice in design and implementation of youth-inclusive financial services being developed by Making Cents include:

  • Involve youth in market research and product development
  • Develop products and services that represent the diversity of youth
  • Ensure youth have safe and supportive spaces
  • Provide or link youth with complementary non-financial services
  • Focus on core competencies and collaborate with youth organizations to ensure holistic programs
  • Involve communities to reinforce and enhance the effectiveness of programming
  • Establish a strategic rational and ensure institutional readiness for serving youth

Mobiles and youth financial inclusion

Many have high hopes around the role of mobile phones in enhancing and expanding youth financial services. Mobiles may allow financial institutions to lower costs for financial products and thus enable new and profitable business models. In addition to providing direct services, mobiles might be able to improve the reach and impact of financial education aimed at youth, and encourage particular behaviors and habit formation. For example, SMS reminders are being used to ‘nudge’ youth towards particular actions related to savings and smarter purchases.

A report called “Beyond the Buzz” however, highlight some of the major challenges when it comes to the role of mobile and financial inclusion for the under 18 population. As explained by one lead discussant (also one of the report’s authors), most youth surveyed in Sub Saharan Africa believed mobile money would be far more important for financial inclusion in the future than SMS. Non-profit organization practitioners and financial institutions surveyed for the report expressed strong belief in the potential of mobile money and other mobile services for broadening youth financial inclusion.

Enthusiasm is quite high, though there has been little success thus far, and the evidence on the ground is not very encouraging. Even though most people surveyed felt that mobile money was the future and would change everything, mobiles are actually being used far more commonly for financial education (SMS and nudges) than for providing youth access to financial services.

So what are the obstacles?

Some of the challenges that prevent mobile financial services from taking off include:

  • Age restrictions and regulations. In most countries, a young person cannot obtain an identity card until the age of 18, meaning access to a bank account, a SIM and/or mobile money is restricted. Many young people get around this obstacle by borrowing a handset or asking a parent or guardian for support. When phones do not belong to youth, however, SMS ‘nudges’ for financial education may not reach them. In addition, the lack of a private handset may discourage youth from using mobile to manage their money due to the potential loss of privacy and control over their money. Children under the age of 18 are a protected group, and many countries have regulations around collecting information about or marketing to this population. Child protection policies and legal regulations are a positive thing, however, they can also create barriers to financial education and financial services for under 18s.
  • Lack of data. One discussant noted that age-disaggregated data from mPesa’s mobile money service would probably show that older youth (ages 18-30) are the majority of the mobile money users. The lack of data on youth, however, makes it difficult for non-profit organizations to develop targeted and demand-led financial products and services. Mobile Network Operators (MNOs) have data, yet their data are not easy to access. One Salon discussant told of a project where it took over two and a half years to obtain legal permission from an MNO to access youth data for an RCT on the impact of SMS on youth savings.
  • Industry barriers. Successful and sustainable business models for youth financial services are few and far between. The likelihood of low financial returns from youth make most banks uninterested in approaching the youth ‘base of the pyramid’ market. Institutions that make money from youth financial services are most likely making it from 24 and 25 year olds, not under 18s. Explaining the potential benefits of a long-term business model (that you may need to take a loss earlier on to gain from this segment later) to financial institutions is difficult. In addition, mobile operators are not fully empowered to launch mobile financial services on their own, even if they wanted to, because of government regulations (in some cases, added one Salon participant, because the banking industry actively lobbies government to avoid losing business to MNOs).

Long on enthusiasm and short on examples?

Considering all the obstacles, why are hopes so high when it comes to mobiles and youth financial inclusion? Some consider that MNOs have a fundamental advantage over banks in countries where the majority of people have access to a mobile phone yet have never used a bank or formal financial service. In many parts of the world, banking systems are unavailable and/or inefficient, and people do not trust formal systems or large bureaucracies. When it comes to mobile, however, use and availability of handsets, widespread recognition of mobile operator brands and services, and familiarity with the notion of transferring airtime mean that mobile money is a fairly easy idea for people to grasp and thus it may be easier to generate trust in mobile as a means to access financial services.

The impact of mobile money and mobiles on financial inclusion is difficult to evaluate rigorously, however, noted one Salon participant. The volume of money is very small, so we should have very low expectations in that regard. If 20% of a target population uses a financial service or product, we should be excited because we see an individual having more control over and information on their own financial transactions. This enables them to make better decisions over their finances. Mobile financial services are likely doing more good than harm, even if a large, broad-based impact study is not available. Another Salon participant pointed out, however, that market research to inform good product and service offerings is very much lacking, and a concerted effort is needed to document and research this area.

A large study is being conducted with youth ages 15-19 and 20-24 on youth demand for mobile money and financial services in several African and Asian countries as part of the Financial Inclusion Insights program, said one lead discussant, and data will be available to the public. The majority of youth surveyed for the study said that they did not use a bank because they did not have enough money to do so. In five years, according to the discussant, mobile financial products will be accessible in a wide range of countries and the number of youth using them is increasing. Research shows that urban youth tend to adopt these products more often than older people or rural populations, and there is a male-female gap, where more males are accessing and using them. In general, younger populations have been positive about mobile financial products and services.

An inevitable future?

Despite the dearth of successful business models, evidence, and large-scale sustainable examples, some Salon participants felt that we are entering a new era where financial products and services will be widely available through the mobile phone. As one person explained, it’s a question of moving with the times or becoming obsolete. In Southern African countries, she said, the move is towards rolling out products and services that provide holistic financial inclusion — credit, savings and insurance. In addition, municipal and utility bill paying is getting people accustomed to mobile financial services via MNOs. Banks who are running at a low level of innovation will lose out if they are not capable of providing these kinds of time-saving services through mobile phones.

So what should organizations be doing to prepare youth to widely access and use mobile financial services? Should financial education programs include content about mobile financial services, offerings and fees, and potential risks and benefits for youth of using them? Might mobile gaming be a way of getting around some of the barriers for under 18s, as one Salon participant suggested? In this case, children could practice important concepts around savings and loans, types of bank accounts, fee structures for banking, etc., without assuming any real risk.

Some broader questions linger around mobile financial services for youth as well: What impact does (or will) mobile financial services have on people’s lives and wellbeing? Will they impact how youth invest and manage their money? Will they improve redistribution of resources to households? Will they end up pulling a large segment of the population into unsustainable systems and backfire?  So far there’s no clear answer, but watch this space.

***

A list of resources, links, projects, organizations and research on the topic is here. Please add anything that’s missing!

Thanks to participants and lead discussants for the great discussions and to Population Council for hosting us at their offices for this Salon. Thanks also to Peter Goldstein for suggesting the topic and to Somto Fab-Ukozor for support with notes and the summary. Salons are held under Chatham House Rule, therefore no attribution has been made in this post. If you’d like to attend future Salons, sign up here!

Read Full Post »

Screen Shot 2014-03-07 at 3.34.23 AM

As Tom over at Humanosphere wrote a few days ago, there’s a cool initiative happening at Sheffield University that seeks to develop a global research agenda related to the post-2015 sustainable development goals process. (Disclaimer, I’m part of the steering committee.)

ID100: The Hundred Most Important Questions in International Development asks individuals and organizations from across policy, practice and academia to submit questions that address the world’s biggest environmental, political and socioeconomic problems. These will then be shortlisted down to a final set of 100 questions following a debate and voting process with representatives from development organizations and academia who will meet in July 2014. 

The final list of questions will be published as policy report and in a leading academic journal. More on the consultation methodology here. Similar crowdsourced priority-setting exercises have worked in biodiversity conservation, food security and other areas, and they have been instrumental in framing global research priorities for policy development and implementation.

Screen Shot 2014-03-07 at 3.36.06 AMAnyone can submit up to five questions related to key issues in international development that require more exploration. You are encouraged to involve colleagues in the formulation of these questions.

Please submit your questions by March 25th – and check the submission guidelines before formulating questions. More information on the project can be accessed on the ID100 website. Hashtag: #ID100.

Read Full Post »

Screen Shot 2013-11-23 at 6.14.40 PM

Migration has been a part of the human experience since the dawn of time, and populations have always moved in search of resources and better conditions. Today, unaccompanied children and youth are an integral part of national and global migration patterns, often leaving their place of origin due to violence, conflict, abuse, or other rights violations, or simply to seek better opportunities for themselves.

It is estimated that 33 million (or some 16 percent) of the total migrant population today is younger than age 
20. Child and adolescent migrants make up a significant proportion of the total population of migrants in Africa (28 percent), Asia (21 percent), Oceania (11 percent), Europe (11 percent), and the Americas (10 percent).

The issue of migration is central to the current political debate as well as to the development discussion, especially in conversations about the “post 2015” agenda. Though many organizations are working to improve children’s well-being in their home communities, prevention work with children and youth is not likely to end migration. Civil society organizations, together with children and youth, government, community members, and other stakeholders can help make migration safer and more productive for those young people who do end up on the move.

As the debate around migration rages, access to and use of ICTs is expanding exponentially around the globe. For this reason Plan International USA and the Oak Foundation felt it was an opportune time to take stock of the ways that ICTs are being used in the child and youth migration process.

Our new report, “Modern Mobility: the role of ICTs in child and youth migration” takes a look at:

  • how children and youth are using ICTs to prepare for migration; to guide and facilitate their journey; to keep in touch with families; to connect with opportunities for support and work; and to cope with integration, forced repatriation or continued movement; and
  • how civil society organizations are using ICTs to facilitate and manage their work; to support children and youth on the move; and to communicate and advocate for the rights of child and youth migrants.

In the Modern Mobility paper, we identify and provide examples of three core ways that child and youth migrants are using new ICTs during the different phases of the migration process:

  1. for communicating and connecting with families and friends
  2. for accessing information
  3. for accessing services

We then outline seven areas where we found CSOs are using ICTs in their work with child and youth migrants, and we offer some examples:

Ways that CSOs are using ICTs in their work with child and youth migrants.

Ways that CSOs are using ICTs in their work with child and youth migrants.

Though we were able to identify some major trends in how children and youth themselves use ICTs and how organizations are experimenting with ICTs in programming, we found little information on the impact that ICTs and ICT-enabled programs and services have on migrating children and youth, whether positive or negative. Most CSO practitioners that we talked with said that they had very little awareness of how other organizations or initiatives similar to their own were using ICTs. Most also said they did not know where to find orientation or guidance on good practice in the use of ICTs in child-centered programming, ICTs in protection work (aside from protecting children from online risks), or use of ICTs in work with children and young people at various stages of migration. Most CSO practitioners we spoke with were interested in learning more, sharing experiences, and improving their capacities to use ICTs in their work.

Based on Plan Finland’s “ICT-Enabled Development Guide” (authored by Hannah Beardon), the Modern Mobility report provides CSOs with a checklist to support thinking around the strategic use of ICTs in general.

ICT-enabled development checklist developed by Hannah Beardon for Plan International.

ICT-enabled development checklist developed by Hannah Beardon for Plan International.

We also offer a list of key considerations for practitioners who wish to incorporate new technologies into their work, including core questions to ask about access, age, capacity, conflict, connectivity, cost, disability, economic status, electricity, existing information ecosystems, gender, information literacy, language, literacy, power, protection, privacy, sustainability, and user-involvement.

Our recommendation for taking this area forward is to develop greater awareness and capacity among CSOs regarding the potential uses and risks of ICTs in work with children and youth on the move by:

  1. Establishing an active community of practice on ICTs and children and youth on the move.
  2. Mapping and sharing existing projects and programs.
  3. Creating a guide or toolbox on good practice for ICTs in work with children and youth on the move.
  4. Further providing guidance on how ICTs can help “normal” programs to reach out to and include children and youth on the move.
  5. Further documentation and development of an evidence base.
  6. Sharing and distributing this report for discussion and action.

Download the Modern Mobility report here.

We’d love comments and feedback, and information about examples or documentation/evidence that we did not come across while writing the report!

Read Full Post »

This is a cross-post from Tom Murphyeditor of the aid blog A View From the Cave. The original article can be found on Humanosphere. The post summarizes discussions at our November 21st New York City Technology Salon: Are Mobile Money Cash Grants the Future of Development?  If you’d like to join us for future Salons, sign up here.

by Tom Murphy

Decades ago, some of the biggest NGOs simply gave away money to individuals in communities. People lined up and were just given cash.

The once popular form of aid went out of fashion, but it is now making a comeback.

Over time, coordination became extremely difficult. Traveling from home to home costs time and money for the NGO and the same problem exists for recipients when they have to go to a central location. More significant was the shift in development thinking that said giving hand outs was causing long term damage.

The backlash against ‘welfare queens’ in the US, UK and elsewhere during the 1980s was reflected in international development programming. Problem was that it was all based on unproven theories of change and anecdotal evidence, rather than hard evidence.

Half a decade later, new research shows that just giving people money can be an effective way to build assets and even incomes. The findings were covered by major players like NPR and the Economist.

While exciting and promising, cash transfers are not a new tool in the development utility belt.

Various forms of transfers have emerged over the past decade. Food vouchers were used by the World Food Programme when responding to the 2011 famine in the Horn of Africa. Like food stamps in the US, people could go buy food from local markets and get exactly what they need while supporting the local economy.

The differences have sparked a sometimes heated debate within the development community as to what the findings about cash transfers mean going forward. A Technology Salon hosted conversation at ThoughtWorks in New York City last week, featured some of the leading researchers and players in the cash transfer sector.

The salon style conversation featured Columbia University and popular aid blogger Chris Blattman, GiveDirectly co-founder and UCSD researcher Paul Neihaus and Plan USA CEO Tessie San Martin. The ensuing discussion, operating under the Chatham House Rule of no attribution, featured representatives from large NGOs, microfinance organizations and UN agencies.

Research from Kenya, Uganda and Liberia show both the promise and shortcomings of cash transfers. For example, giving out cash in addition to training was successful in generating employment in Northern Uganda. Another program, with the backing of the Ugandan government, saw success with the cash alone.

Cash transfers have been argued as the new benchmark for development and aid programs. Advocates in the discussion made the case that programs should be evaluated in terms of impact and cost-effectiveness against just giving people cash.

That idea saw some resistance. The research from Liberia, for example, showed that money given to street youth would not be wasted, but it was not sufficient to generate long-lasting employment or income. There are capacity problems and much larger issues that probably cannot be addressed by cash alone.

An additional concern is the unintended negative consequences caused by cash transfers. One example given was that of refugees in Syria. Money was distributed to families labeled for rent. Despite warnings not to label the transfer, the program went ahead.

As a result, rents increased. The money intended to help reduce the cost incurred by rent was rendered largely useless. One participant raised the concern that cash transfers in such a setting could be ‘taxed’ by rebels or government fighters. There is a potential that aid organizations could help fund fighting by giving unrestricted cash.

The discussion made it clear that the applications of cash transfers are far more nuanced than they might appear. Kenya saw success in part because of the ease of sending money to people through mobile phones. Newer programs in India, for example, rely on what are essentially ATM cards.

Impacts, admitted practitioners, can go beyond simple incomes. There has been care to make sure that implementing cash transfer programs to not dramatically change social structures in ways that cause problems for the community and recipients. In one case, giving women cash allowed for them to participate in the local markets, a benefit to everyone except for the existing shop oligarchs.

Governments in low and middle-income countries are seeing increasing pressure to establish social programs. The success of cash transfer programs in Brazil and Mexico indicate that it can be an effective way to lift people out of poverty. Testing is underway to bring about more efficient and context appropriate cash transfer schemes.

An important component in the re-emergence of cash transfers is looking back to previous efforts, said one NGO official. The individual’s organization is systematically looking back at communities where the NGO used to work in order to see what happened ten years later. The idea is to learn what impacts may or may not have been on that community in order to inform future initiatives.

“Lots of people have concerns about cash, but we should have concerns about all the programs we are doing,” said a participant.

The lessons from the cash transfer research shows that there is increasing need for better evidence across development and aid programs. Researchers in the group argued that the ease of doing evaluations is improving.

Read the “Storified” version of the Technology Salon on Mobiles and Cash Transfers here.

Read Full Post »

Screen Shot 2013-09-13 at 5.09.30 PMYouth make up 17 percent of the world’s population and 40 percent of the world’s unemployed, according to the International Labor Organization. A number of factors combine to make sustainable, decent employment an enormous challenge for youth the world over, including low levels of education and technical skills, slow job growth, lack of information about available jobs, and difficulties accessing financial capital to start small enterprises. Decent jobs are especially difficult to find for rural youth, girls and women, and youth with disabilities.

In addition to the growth in youth unemployment, access to and use of mobile technologies (e.g., mobile phones, tablets, eReaders, radio, portable media players, SD cards) among youth worldwide is also expanding. This has created excitement about the potential of mobile devices to catalyze new approaches that address some of the constraints keeping youth from finding and sustaining decent livelihoods. Documentation and evidence of impact in the broad field of mobile technology and youth workforce development (mYWD) is lacking, however, meaning that it has been difficult to identify where mobile technology and youth workforce development initiatives overlap and where mobile may have the greatest added value.

After a year of hard work, last week we launched the mEducation Alliance’s Mobiles for Youth Workforce Development (mYWD) Landscape Review, an effort of the mEducation Alliance, The MasterCard Foundation, and USAID. The review maps out who is doing what and where, and to the extent possible, discusses evidence of what is working. The body of the report answers questions such as:

  • What organizations and programs are using mobiles to help overcome the barriers to employment for youth?
  • What type of programming has been implemented and how?
  • Where do prime opportunities exist for integrating mobile devices into youth workforce development programs?
  • What are relevant considerations related to gender and disability in mYWD programming?
  • What factors facilitate or hinder mYWD in specific contexts?
  • Are there any research findings that show the impact of mobiles on youth workforce development?

In addition, the annexes provide information on 80 initiatives and over 275 publicly available documents describing efforts that use mobile technology to support youth workforce development programming in five key areas:

  • Workforce education and training, including basic education, technical and vocational education and training (TVET), job skills training, apprenticeships, and life skills training (in and out of the classroom).
  • Employment services, including on-going job referral services that bring employers and workers together through job postings, job fairs, job shadowing, job placement, resume preparation, and coaching.
  • Entrepreneurship and enterprise development, including support programs for self-employment and business development, such as entrepreneurship training, mentoring, and financial services for loans and capital.
  • Demand-side policies and programs, including broad-based economic growth programs like national youth employment policies, value chain development, public works programs, wage subsidies, minimum wages, and tax breaks for employers (JBS International, 2013).
  • Addressing social norms, including programs that support effective participation of excluded groups, non-traditional skills training, safe training and employment spaces for excluded youth, and broader awareness campaigns.

There is an enormous amount of activity in mYWD, from small-scale, market-based start-up applications to mobile innovation hubs for youth entrepreneurs. The landscape review offers a summary of how mobile devices are used in the above five areas, draws out relevant lessons from the available literature and existing evidence base, offers advice from practitioners working in the field of mYWD, discusses the issue of scale and sustainability of mYWD programs, and offers a number of recommendations for furthering the field, including:

  • Creating a mYWD framework to aid in advancing the field
  • Further developing the evidence base for mYWD
  • Improving our understanding of what scale means
  • Focusing on gender and youth with disability
  • Improving knowledge sharing and collaboration
  • Building the mYWD evidence base through research and impact evaluation

Download the mYWD landscape review at this link!

If the topic is of interest, you can also join the mYWD working group by signing up here.

Read Full Post »

Older Posts »