Impact Sourcing and Young Social Entrepreneurs: Two Approaches to Tackle Youth Unemployment
Social enterprises have plenty of potential to make concrete impacts on youth employment outcomes. For those not familiar with this model, social enterprises are businesses that conduct commercial, profit-generating activities but focus more on social outcomes than profits. This innovative approach in development has caught the attention of many in the youth employment space, especially over the last five years, partly because it relies less on public sector and donor funding -unlike many conventional programs.
Among Solutions for Youth Employment (S4YE)’s Impact Portfolio community of innovative youth employment projects, there are two projects that take the social enterprise model to practice: Digital Divide Data (DDD) and UNICEF’s UPSHIFT program. Each project represents a different way of applying the concept of social enterprise: Digital Divide Data itself is a youth employment project that operates as a social enterprise, while UPSHIFT works on creating young social entrepreneurs.
Operating a social enterprise that serves as a youth employment program: Digital Divide Data’s use of impact sourcing
Digital Divide Data was one of the first firms to adopt Impact Sourcing, which generally means that firms, usually operating in global supply chains, selectively employ staff from disadvantaged target groups. And while that rings as an activity for a for-profit firm, Digital Divide Data’s beginning more closely resembled that of a non-profit. Its initial capital was from fundraising efforts and in many ways looked like a skills training intervention. Digital Divide Data works with secondary schools and non-profit organizations to identify well suited youth that receive the Digital Divide Data-developed “BEST” training (Business skills, English, Soft skills, and Technology).
The marked difference is that after training, youth work on Digital Divide Data projects for international clients for pay and receive scholarships to attend local universities. The majority of youth stay in the program for a longer-than-average duration (3 to 4 years). Upon graduation they receive job search support, while top-performers are hired internally by Digital Divide Data . Its institutional structure also distinguishes it: a hybrid non-profit/for-profit corporate model whereby the local entities in Cambodia, Laos, and Kenya are registered as for-profit companies, all owned by the non-profit parent Digital Divide Data.
This innovative model has also been applied in high income countries. In the US, Digital Divide Data opened Liberty Source in 2014 as an entry point for launching post-military service careers or that of military spouses with previously limited job prospects by delivering on-shore outsourced digital services from an operations center in Virginia. After over 15 years, it’s fair to say that Digital Divide Data has shown the Impact Sourcing model can be successful. Digital Divide Data has become almost financially self-sustainable, with 92% of the business expenses covered by earned revenue while connecting 3,000 youth with long-term work.
However, Impact Sourcing is no panacea for youth employment and, in fact, not necessarily applicable in every context. Five years ago, Digital Divide Data explored the possibility of launching an operation in Peru. After much research, outreach, and collaboration with local entities, Digital Divide Data was not able to secure a funding or a client committed to the social mission of hiring underserved youth. It would have been too risky to open an office without such a partner.
Tackling youth employment by creating young social entrepreneurs: UNICEF’s UPSHIFT Program
Entrepreneurship programs are a prominent feature of the global youth employment landscape. Social entrepreneurship is a noteworthy option because it is not a divergence from the conventional entrepreneurship program but, rather, a supplement. Standard entrepreneurship components can be adjusted to enable effectively launching social enterprises.
And creating young social entrepreneurs makes a lot of sense in developing countries: They often live in underserved communities and are apt to use innovative thinking and technology. In Vietnam, a youth-led social enterprise created an “intelligent” bracelet to detect epileptic seizures. In Kosovo, another youth-led social enterprise offers furniture designed for people with disabilities. Both projects were launched by youth that went through UNICEF’s UPSHIFT program. The program focuses on improving youth’s employment outcomes, although it also addresses multiple UNICEF priorities such as nutrition and health, through the services often generated by the launched social enterprises. The first UPSHIFT program was implemented in Kosovo, after the long-term consequences of the 1999 conflict, which left unmet social needs and social tension.
The key adjustment the UPSHIFT program made, as compared to conventional youth entrepreneurship programs, was to give youth a clear understanding of how ideas translate into products and services to meet socially unmet needs. Aside from covering market-driven approaches to launching a business, youth are taught how to identify and diagnose specific social problems from the very beginning with tools such as conducting interviews in the community (along with other ethnographic approaches) and using the Human Centered Design framework.
A more in-depth discussion of Digital Divide Data and UPSHIFT’s models are available on the new S4YE knowledge briefs on youth employment programs as social enterprises and youth social entrepreneurs.
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