Organisations are the largest consumers of ICTs and the largest producers of e-waste. But what shapes their e-waste decisions? Why do some recycle, others donate, and others dispose?
To understand this, research in the Centre for Development Informatics by Loga Subramanian first categorised four different e-waste strategies:
- Indifferent: the organisation does not adopt any strategic position in relation to e-waste.
- Reactive: the organisation adopts the minimum e-waste strategy necessary to react to its context.
- Proactive: the organisation pushes its e-waste strategy ahead of the basic reactive minimum.
- Innovative: the organisation sees e-waste as an opportunity and adopts an innovative strategy in order to address that opportunity.
To explain these differences, a six-factor model was developed of e-waste strategy determinants. Key external determinants were:
- Government regulation: in particular the threat of fines and other costs associated with non-compliance with environmental regulations.
- Peer pressure: especially where there is some form of sectoral association.
- Client requirements: where these include a need for particular environmental standards or actions.
- Corporate reputation/brand image: given environmental actions are seen to directly correlate to image and reputation.
Key internal determinants were:
- Financial impact: the financial implications of e-waste decisions.
- Organisational culture/leadership: the complex of values, beliefs, assumptions and symbols which organisational leaders promote and which shape all decisions and actions.
Applying this model to India’s largest e-waste producer – the ICT sector – Loga found a significant difference in strategies between different organisations:
- Very large firms adopted a proactive strategy, driven by significant internal and external pressures that reflected their position within global value chains.
- By contrast, ICT sector SMEs were largely indifferent to e-waste, felt few external pressures due to their position within localised value chains, and typically used informal channels that produced some financial return on their scrap ICT.
Given these insights, what are the policy implications? Current legislative approaches – transferred from the global North and based on the principle of extended producer responsibility – are unlikely to help. e-Waste recyclers must be brought into the legislative and financial equation. SMEs must be placed within the purview of legislation (they are currently exempt), and SME associations must place e-waste onto their agenda.
If you would like to know more, please refer to the journal article reporting this research, published in the journal, Information Technology for Development and available via open access: “Understanding e-Waste Management in Developing Countries”.Follow @CDIManchester
The spreadsheet linked below provides time-series data for India’s IT industry, updating data from an earlier blog entry on Indian IT data to 2009. Software export figures run from 1980; overall IT outputs from 1991; and detailed breakdown from 1998 including BPO (business process outsourcing) data from 2000. Data from 2009/10 uses a different source, so changes from 2008/09 to 2009/10 are not reliable.
a) Indian Software Exports
a1) Indian software exports are huge – roughly US$75bn in 2014/15 (and c.US$100bn if BPO services are included) – and continuously registering double digit annual growth.
a2) But the overall pattern of growth is slowing: the ten-year annual growth average was c.40% in 2002; c.30% in 2008; c.20% in 2014.
a3) IT software/services’ share of total exports remains roughly static: it was just under 14% in 2003/04 and just under 15% in 2013/14.
a4) Market diversification for Indian software remains limited. In the early 1990s, export destinations were: US (c.60-65%), UK (c.10%), other Europe (c.10%), Aus/NZ (c.5-10%), Asia (c.0-3%). Twenty years later in 2013-14, export destinations were: North America (63%), UK (13%), other Europe (11%), Aus/NZ (4%), Asia (6%).
a5) Location of production has changed. In the early 1990s, 75% of work took place on-site, 25% in India. By 2013/14, it was said that 20% of work took place on-site, 80% in India. This means that net foreign exchange earnings will have risen as a proportion of gross since offshore work requires much less foreign exchange outflow than on-site working.
a6) One source claims that productivity (as measured by average revenue per employee) in the Indian software sector has risen from c.US$7,000 per head in the mid-1990s, to c.US$16,000 in the late 1990s, to US$38,000 in 2014. But my own data gives a completely different picture: that productivity in the 1990s was static at just over US$30,000 per head, and thus has risen very little during the 2000s: at best by 1-2 percentage points per year.
b) Domestic IT Production
b1) Although the Indian domestic IT market is large and growing, production for exports is growing faster than production for the domestic market. As a result, the share of exports in total IT output has risen from 19% in 1991/92 to 49% in 2000/01 to 67% in 2007/08 to 81% in 2014/15.
b2) IT production for the Indian domestic market and domestic IT consumption are very different. For example, domestic computer hardware production in 2013/14 was roughly US$3bn. But domestic IT consumption was US$12.4bn. In part, this may be because the two figures are counting different things (e.g. consumption figure includes peripherals, network kit, storage, etc). But it likely also points to a high – and said to be growing – share of imports in Indian domestic IT consumption.
c) IT Sector Overall
c1) The IT sector overall in India represents just over 5% of GDP in 2014/15.Follow @CDIManchester
 Mani, S. (2014) Emergence of India as the world leader in computer and information services, Economic & Political Weekly, XLIX(49), 51-61
 Heeks, R. (1996) India’s Software Industry, Sage, New Delhi
 Heeks (ibid.)
 RBI (2015) Survey on Computer Software & Information Technology Enabled Services Exports: 2013-14, Reserve Bank of India, New Delhi https://rbi.org.in/scripts/BS_ViewBulletin.aspx?Id=15452
 Malik, A. & Nilakant, V. (2015) Context and evolution of the Indian IT industry, in: Business Models and People Management in the Indian IT Industry, A. Malik & C. Rowley (eds), Routledge, Abingdon, UK, 15-34
 Heeks (ibid.)
 Chawla, M. (2014) Indian IT hardware markets stands at $12.43bn, The Economic Times, 25 Jun http://articles.economictimes.indiatimes.com/2014-06-25/news/50856134_1_anwar-shirpurwala-biswapriya-bhattacharjee-indian-it
BoPsourcing – the outsourcing of work to bottom-of-the-pyramid communities – is on the rise. Outsourcing used to mean sub-contracting work from one big firm to another nearby. Then, with offshoring, the contracts crossed borders. With BoPsourcing, the contracts cross several income strata as well.
BoPsourcing initiatives can be found that are run by:
- Governments: such as the IT component of Kerala State’s Kudumbashree initiative which has created more than 2,500 jobs for women from below-poverty-line urban households
- Social Enterprises: such as Anudip Foundation which set up its first ‘MERIT’ (mass employment through rural IT) Centre in rural West Bengal in 2010. (There are suggestions that some 200 BoPsourcing initiatives are currently being run by social enterprises and NGOs.)
- Private Firms: such SourcePilani which operates a 50-person business process outsourcing centre in Rajasthan
All these, and many other examples from India, are onshore BoPsourcing. There are also offshore varieties, such as Digital Divide Data, which outsources from large US organisations to telecentres in Cambodian small towns and villages.
BoPsourcing has no necessary connection with ICTs. Indeed, many agricultural value chains are arguably examples. Here, though, my focus is on ICT-related outsourcing. Examples of contracts include data entry, transcription, digitisation, call centres and ICT training.
One of the key concerns about outsourcing and developing countries has been the potential to fuel income and other inequalities. I could already see this studying software offshoring to India in the 1980s: an economic shearing in which those involved saw their incomes pull far ahead of the bulk of the population. More recent evidence suggests offshoring increases overall wage growth but also increases inequality.
BoPsourcing presents an obvious solution. Channelling the benefits of outsourcing down to the poor can drive wealth creation for those on the lowest incomes, and serve to reduce inequalities.
So. Job done. We can add BoPsourcing to our list of great development solutions.
Well, not quite yet. First because the evidence base is very weak. Second because BoPsourcing comes in nearly as many varieties as Heinz. Figure 1 summarises.
Figure 1: Continuum of BoPsourcing Approaches
There are at least four conceivable models that form the continuum (but feel free to add your own evidence and ideas):
- Exploitative outsourcing seeks to bear down on wages and working conditions in order to minimise costs and maximise profits. The result is an ICT sweatshop that does little to grow incomes, to deliver empowerment, or to reduce inequality. At present this seems more of a bogeyman brandished by those at the other end of the continuum, than it is an evidence-based reality. The potential, though, is certainly present with so many outsourcing firms seeking to drive down costs.
- Commercial outsourcing reflects, for example, the steady diffusion of outsourcing in India and other nations, from cities to large towns to small towns and beyond. Whether this can yet be called BoPsourcing (e.g., forgive the pun, whether BPO is BoP) is unclear. Quite likely commercial operators have to date only got as far as large towns. But the migration trend is clear, and it will reach poorer towns and even villages soon enough. As for inequality, the effect is likely to be as arguable as it is for outsourcing generally: evidence is contested and, unfortunately, fought more by economists pitting ever-more complex models against each other, than on the basis of field data.
- Ethical outsourcing (also known as socially-responsible outsourcing) takes commercial outsourcing and requires that it meets certain minimum standards; typically relating to labour practices but also starting to include environmental issues. The International Association of Outsourcing Professionals has taken a lead on this. This is likely to have some impact on inequality but, again, the extent to which such work really reaches the BoP as yet is questionable.
- Social outsourcing (also known as developmental outsourcing) differs from ethical outsourcing as fair trade differs from ethical trade. Ethical outsourcing involves existing commercial players with either a commitment to or measurement of adherence to standards. Social outsourcing involves new non-market intermediaries who sit between the client and the BoP sub-contractor. Social outsourcing most definitely does reach the BoP; indeed that is its raison d’être. It has already been shown to increase incomes, increase asset holdings, increase skills, and increase empowerment. It is therefore likely to reduce inequality.
True ICT BoPsourcing is on the increase – you only have to monitor the growing number of initiatives to see that. Much of the more commercial end of outsourcing has yet to get this far. It’s more like MoPsourcing (i.e. middle of the pyramid) just now, but cost pressures, supply-demand gaps, ICT diffusion, and growing awareness of BoPsourcing mean this is changing.
The impact of these trends on inequality will depend on which outsourcing model comes to dominate the BoPsourcing business. If social outsourcing wins, then so too will the poor. If exploitative outsourcing wins, the opposite will be true.
In practice we may well see some messy combination of models, as social and commercial approaches intersect. For the social outsourcing intermediaries, the lure of big clients, contracts and growth may pull them into bed with commercial operators. Conversely, the operators will be attracted by the contacts, expertise and CSR-window dressing that social intermediaries provide. The poor themselves will get jobs, skills and income. Whether they will see the structural transformation necessary to really clobber inequality, only time will tell.
The spreadsheet linked below provides time-series data for India’s IT industry: software, hardware and services revenue for both export and domestic markets. Software export figures run from 1980; overall IT outputs from 1991; and detailed breakdown from 1998 including BPO (business process outsourcing) data from 2000.
Although software and IT services tend to grab the headlines, other sub-sectors are significant: with hardware worth US$9.5bn (nearer US$12bn if one includes hardware design) and BPO worth more than US$13bn in 2008/09. Total revenue for India’s IT industry in 2008/09 was US$73.4bn.
A number of charts are included in the PDF version. These show, for example:
– The phenomenal growth rate of India’s software exports, with (ten-year rolling) average annual growth never dropping below 30%, and overall exports exceeding US$36bn in 2008/09:
– The much higher growth rate of Indian IT exports compared to production for the domestic market. As a result, the share of exports in total IT output has risen from 19% in 1991/92 to 69% in 2008/09:
The source for the data used is a mixture of interviews in India and Department of Electronics/IT reports for the earlier data up to late 1990s; and the invaluable Dataquest (India) annual review of the IT industry (the “DQ Top 20”) from that point on.