UNC Kenan-Flagler Business School

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UNC Kenan-Flagler Business School

UNC KENAN-FLAGLER NEWS


Operations management for economic development

1/28/2013

Bradley Staats

Operations management might seem like an unlikely candidate for economic development, but Brad Staats has found that changes in how work is performed and outsourced can aid economic development – and benefit a company’s bottom line.

The work of Staats, an operations professor at UNC Kenan-Flagler, in “impact operations” extends from his research to his teaching – and opened the door to a dream job for a student.

The way that work gets done has changed dramatically over the past 25 years, says Staats. Key among those changes is “work fragmentation” – the division of tasks into small, focused pieces – and the distribution of each piece to the best source of labor, wherever it is in the world. Three factors drive the fragmentation:

  • Low-priced, high-quality talent workers have flooded the global labor markets as the economies of Russia, India and China opened.
  • Advances in information and communication technologies make it possible to distribute work and collaborate on it globally.
  • Scientific progress in fields from engineering to medicine has created demand for increasingly specialized knowledge to solve problems.

 As Staats examined how work fragmentation is changing operations, he found that with fragmentation comes opportunity.

Companies can outsource small tasks or jobs (“microwork”) in ways that boost economic development. With this “impact sourcing,” companies can create meaningful work and wages for the people at the bottom of the pyramid who need it most, says Staats. It can help break the cycle of poverty, whether in Africa or the United States.

Microworkers build skills, earn life-changing income and can use their newly acquired skills as a springboard to other jobs. It also connects new workers to the global supply chain, and addresses the needs of first-world companies.

“Microwork is a viable way to do economic development,” Staats said. “Customers get work done cost-effectively and well, and marginalized people get the advantages of work.”

Staats writes about impact sourcing in “The Microwork Solution” in Harvard Business Review. He analyzes Samasource, a nonprofit in San Francisco and a leader at the impact sourcing of microwork.

Different from traditional outsourcing companies, Samasource connects poor women and youth to training and employment in the digital economy. It secures contracts for digital services from large U.S. and European companies, including LinkedIn and Google; divides the work into small tasks (such as transcribing audio files and editing product databases); and sends it to its 16 work centers in South Asia, Africa and Haiti. It has paid more than $2 million to 3,000-plus workers.

Staats wrote a case study about Samasource, which he taught at MBA@UNC global immersion on innovation and entrepreneurial thinking in San Francisco in March 2012. He invited Patricia Li, Samasource director of delivery, to join the students for the discussion.

The students were fascinated by how Samasource uses work, not aid, for economic development.  But no student was more captivated than Julia Lee Elliott, who flew in from Guangzhou, China, where she worked as the IT project manager for Planetshoes.com. When she heard the Samasource case, Elliott knew she had found an organization that offered the perfect intersection of her passions for social enterprise and technology.

After the class ended, she connected with Li to learn more about Samasource and today Elliott is a sales engineer responsible for leveraging technology and delivery capabilities to scope prospective projects at Samasource.

Staats is gratified that his research helps all kinds of organizations scale their operations more effectively. In addition, it creates awareness of how the innovations of microwork and impact sourcing can support economic development and improve a company’s bottom line – and connect a student’s passion with her dream job.