September 2006

Building Women’s ICT Social Enterprise

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A social outsourcing initiative from Kerala’s government is the world’s largest development of ICT-based livelihoods for poor

How can ICTs be used to improve the livelihoods of poor women? One answer is ‘by addressing social development’ – use of ICTs to improve communication of educational, health, political, community and related information. Another answer is: ‘by addressing existing economic development’ – use of ICTs to improve communication of information about women’s existing economic activities (ideas on better farming techniques, data on market opportunities for handicraft work, etc).

But there are strong limitations to each of these approaches because they involve marginal rather than fundamental change to women’s livelihoods. The equivalent of oiling the pedals or adding new tyres to a bicycle. When what you want is to exchange that bicycle for a motorbike.

To create a fundamental change, we need to follow a third answer, ‘by creating a new economic livelihood’ – use of ICTs to create a complete new job and income that did not exist before. We know this is possible for relatively-advantaged women who become Indian software programmers or South African call centre operators.  But what about women from poor communities?

Understanding ICT-based livelihoods
To investigate this, the University of Manchester is undertaking a global project on women’s ICT-based livelihoods – new livelihoods created solely via ICTs – supp-orted by funding from the UK Department for International Development (DFID). A set of commissioned case studies
( demonstrates that this is a worldwide reality.

The attention, though, was particularly drawn to the experiences of the Kudumbashree project in Kerala State, India. Undertaken under the auspices of the State’s Poverty Eradication Mission, this is thought to be the world’s largest initiative in creating ICT-based livelihoods for poor women, affecting several thousand women to date.

The focus of this article is made on two aspects of the project. First, the innovative business model it uses. Second, the effect it has on women’s livelihoods, based around a structured approach to ICT project impact assessment.

Social outsourcing: a new business model for IT services
Governments procure their external services by various means.  At one extreme, there is a market outsourcing – paying a private company such as a multinational subsidiary via a contract to do the job, often used for IT or management services work. At the other extreme, there is workfare – paying local citizens such as the rural unemployed via daily cash compensation to do the job, often used for labour-intensive activity such as public works.

Kerala’s State Poverty Eradication Mission has come up with an innovative hybrid – ‘social outsourcing’.  This contracts work out from government to social enterprises but with a developmental as much as a neo-liberal agenda.  If everything goes well, one gets a triple win:

• developmental benefits of enriching and empowering poor women,
• economic benefits of saving money for government, and
• political benefits of delivering simultaneously on small government and equity agendas, while deflecting criticism about outsourcing.

Indian experience of social outsourcing
So how does it work in Kerala?  Support is provided to bring together a group of (typically ten) unemployed women from below-poverty-line families. Then they register themselves as a cooperative enterprise by each investing US$30 (a trivial sum by Western standards but enough to exclude some of the poorest or more risk-averse participants). Government will then chip in a grant of ten times the group investment and secure a matching amount as a bank loan. US$6,000 is thus typical starting capital, of which half must be repaid.

More than 230 of these small enterprises have been created since 1999. This has coincided with growing use of ICTs in the Kerala government and, hence, with growing potential for outsourcing of IT services. That potential has been used for social outsourcing in three main fields:

• Data entry and digitisation: about one-third of the women’s enterprises undertake this work, such as the digitisation of voter records.
• IT training: slightly less than two-thirds undertake this, mainly training students in state secondary schools.
• PC assembly and maintenance: an activity of just three of the women’s enterprises but nonetheless responsible for hundreds of PCs per year.

In some cases, mostly for data entry and PC assembly, the women’s enterprises compete with other firms to secure the government contracts. In others, mostly for IT training, work is given without an open tender.

Government certainly benefits.  Outsourcing solves the perennial public sector difficulty of failing to retain in-house IT staff.  Outsourcing to low-wage social enterprises delivers low-cost IT services solutions (no doubt a cause for grumbling among the IT services firms competing for contracts with these women’s enterprises).  And working in this manner builds-in factors known to underpin successful outsourcing: trust, long-term relations and close interaction of client and sub-contractor. But what about the women themselves – do they benefit?

Understanding the impact of ICTs on women’s livelihoods
Individual life stories, such as that of Mable (see the box) can illustrate the impact of a new ICT-based livelihood, but they do not represent a rigorous analysis of benefits. To provide such an analysis, the project drew on the skills of research partner Planet Kerala to undertake case analyses of over 30 women’s enterprises, and interviews with more than 130 women. The impact assessment was framed in terms of a modified version of the ‘asset pentagon’ identified in the sustainable livelihoods framework (exchanging natural capital, which played no role here, with political capital, i.e. empowerment):

• Financial capital: Almost all women, some 1,500 core enterprise members and c.2,500 more hired as employees, were now earning at least US$1 per day.  Although small, this was making a significant difference.  For more than half the women it represented more than half of all household income. This income was seen as the main bulwark against the vulnerabilities women had previously suffered.  They used the money not just for everyday spending but for exceptional items: education costs, health care, construction work, redeeming pawned items.  Most enterprises have also paid off their initial loans and a number have taken further loans to update or expand their ICT infrastructure.
• Human capital: There has been a fairly obvious gain of ICT-related skills for thousands of women.  Core enterprise members have picked up managerial and entrepreneurial skills as well because of their collective involvement in the enterprises they have created.
• Physical capital: Cooperative ownership of the enterprise’s ICT infrastructure (typically about one PC per member) has
supplied each woman with a work-related asset worth the equivalent of almost two years’ income. This works as collateral for additional loans, due to the upgrade mania of the PC world – that declines quite steeply in value over time.
• Social capital: Narrow, heavily-localised social networks have been significantly expanded.  Formally, women have new linkages to a variety of government officials.  Informally, the cooperation, mutual trust and team spirit among enterprise group members gives them a strong sense of new social capital.
• Political capital/empowerment: Women described their empowerment in terms of changing self-identity and status. They talked constantly about their new confidence in tackling problems, in approaching institutions, in dealing with other people. They talked too about respect, recognition and acceptance in their communities; not simply because of having a job but because of having an ICT-related job, something associated with modernity and progress and hope.  Change in gender relations was less clear.  These women were taking on traditionally male e.g. management roles; some were hiring and managing men as employees; some were breaking away from traditional female goals of security and stasis to push for growth in their enterprises. However, men still filled the pivotal roles in the State Poverty Eradication Mission and as local government customers. There remained a degree of deference to fathers or husbands as ultimate decision makers in the household. And expectations of women’s triple role – wife/mother, worker, community member – still lurked not far beneath the surface.

The overall  impact
Sustainability of such impacts will always be a question mark for government-supported initiatives, but there are a number of positives:
• Several enterprises have been running for more than six years, and the great majority for more than four; longer than the average lifespan of a small enterprise.

• Core members do drop out for reasons of marriage or alternative employment but in most cases they are replaced by new employees.
• Diversification away from government is limited, but definitely on the agenda.  Some units now earn a third or more of income from private customers.

In sum, this is not a panacea.  However, equally, we may share the language of the women involved to talk of a transformation in their lives thanks to use of ICTs to create new livelihoods; replacing the old ‘bicycle’ of their unemployment with the ‘motorbike’ of an IT sector job.

Next steps
It is hoped that other state and national governments can learn from the Kerala experience, and seek to replicate its success in delivering ICT-based livelihoods to poor women.  Of course, that requires strong political commitment to social outsourcing of IT services, and to women’s development, plus means for poor women to access ICT skills.

To encourage not just this, but a more general process of
creating and developing women’s ICT-based enterprises,
the Manchester project is now in a roll-out phase. This relies
on the localisation activities of a series of partners: Change
Initiatives, Datamation Foundation, Drishtee Foundation,
and IT for Change in India; WOUGNET in Uganda, and
Sula Batsu in Costa Rica.  Others with an interest in this area
are encouraged to join in the discussions
( or to collaborate in other ways that can help exploit ICT’s significant potential to create new livelihoods for poor women.

Mable’s story
Mable is the eldest of three children from a poor family, unable to continue her studies after the age of 16 because her father fell ill and could not continue with his job.

Together with nine others she formed the Technovision enterprise in year 2000, but struggled during the early days. Community members mocked them as a bunch of girls who have no other work to do. And in the first year, they got practically no income.  But a strong feeling of group solidarity got them through the bad times, and now she is her family’s main breadwinner.  Neighbours who derided her now come seeking ICT training and wanting ICT-related jobs.

Her message is clear: “Women too can prove themselves in the IT sector.  Our work has developed my confidence to tell you this.  There is nothing women are unable to do in the IT field.”



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