Jorien Oprins
Master thesis Research Master’s International Development Studies Graduate School of Social Science
University of Amsterdam
Employment in the Online Outsourcing and Impact
Sourcing Industry: Dream or Reality for Filipinos Living
at the Bottom of the Pyramid?
An analysis of two sub-sectors of mainstream service outsourcing in the
Philippines through the lens of inclusive growth theory
1 Master thesis Research Master’s International Development Studies
Graduate School of Social Sciences University of Amsterdam
Supervisor: Dr. N.P.C. Beerepoot
Employment in the Online Outsourcing and Impact Sourcing
Industry: Dream or Reality for Filipinos Living at the Bottom of
the Pyramid?
An analysis of two sub-sectors of mainstream service outsourcing in the Philippines through the lens of inclusive growth theory
Jorien Oprins
Student number: 10876030
jorien.oprins@student.uva.nl
August 16, 2016
2
Abstract
Impact sourcing and online outsourcing have recently emerged as new models which intentionally or unintentionally provide incomes to underprivileged groups in the global South by giving them access to information technology enabled service jobs. Because ICTs connect workers to work irrespective of their background and location, it is possible that they could help overcome the social, cultural, and physical barriers that might otherwise have excluded underprivileged groups from participating in the labour market. Focussing on the Philippines, this study seeks to analyse and compare the employment opportunities provided by the online outsourcing and impact sourcing industry through the lens of ICT for development (ICT4D). Whereas the existing literature analyses the workings of the industries and the effects on workers’ livelihoods, it adopts an inclusive growth framework to identify where in the country work is located, to which workers the industries reach out as well as the longer-term prospects of work. Based on qualitative interviews with impact sourcing managers and service providers from both sectors, Facebook observations, and quantitative, geographical data, results indicate that the online outsourcing and impact sourcing industry largely concentrate in urban hubs and employ well-educated workers stemming from a middle-class background. This makes it ambiguous to see the industries as alternatives to mainstream information technology enabled service provision. Moreover, results show that online outsourcing is on the verge of change, which could negatively effect on workers’ jobs, whereas impact sourcing requires change if more jobs are to be created.
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Acknowledgements
I would like to express my gratitude to my supervisor Dr. Niels Beerepoot for introducing me to my research topic which I truly enjoyed studying. Moreover, I would like to thank him for continuously motivating me to work harder and set the bar higher as well as for giving me opportunities to further develop myself in the world of academia.
I am deeply grateful to all kind individuals who temporarily left their desks and computers to assist me with my research. Their great enthusiasm in telling me about their jobs inspired me to contribute to making their industries more known both within and outside of the Philippines. In particular, I would like to thank Rey Macrohon for without his great efforts I would have never been able to get in touch with half of these individuals to begin with. In a similar vein, I am grateful to Ibrahim Monchito from ICTO-DOST and Butch Valenzuela from VKPO for bringing me in touch with the other half of enthusiastic workers.
I was lucky enough to share my fieldwork experience with Marjolein who served not only as my soundboard but also as my friend. I cannot imagine my fieldwork period without her.
To Willem, thank you for being available for unexpected real time or Skype brainstorm sessions all throughout the research process and, more importantly, for being your cheerful self. Lastly, I would like to thank Arnold and Dolly for without them, I would not have been able to commence with my thesis to begin with.
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Table of Contents
Abstract
2
Acknowledgements
3
Table of Contents
4
List of Figures
7
List of Tables
8
List of Abbreviations
9
Chapter I: Introduction
10
1.1 Background to the Study 10
1.2 Main Objectives and Relevance 12
1.3 Case Study: The Philippines 13
1.4 Outline of the Study 13
Chapter II: Theoretical Framework
15
2.1 ICT4D 15
2.2 Online outsourcing and ICT4D 16
2.3 Impact Sourcing and ICT4D 19
2.4 Inclusive Growth Theory 21
2.4.1 Conceptualisation of Inclusive Growth 21
2.4.2 Long-Term Employment as Indicator of Inclusive Growth 23
2.5 Concluding Remarks 24
Chapter III: Research Framework
25
3.1 Research Questions 25
3.2 Conceptual Scheme 26
3.3 Research Location: the Philippines 27
3.4 Research Design 29
3.4.1 Ontological and Epistemological Position 29
3.4.2 Methodology 30
3.4.3 Methods 30
3.4.4 Assessment of Research Quality 37
3.5 Ethical Considerations 38
3.6 Concluding Remarks 39
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4.1 Mainstream Service Outsourcing 40
4.1.1 Industry overview 40
4.1.2 Countrywide Geographical Distribution 41
4.1.3 BPO Service Providers 42
4.1.4 Industry Employment 43
4.2 Online Outsourcing 43
4.3 Impact Sourcing 45
4.4 Concluding Remarks 46
Chapter V: Geographical Distribution of the Online Outsourcing and
Impact Sourcing Industry
47
5.1 Geographical Distribution of the Online Outsourcing Industry 47 5.2 Geographical Distribution of the Impact Sourcing Industry 54
5.3 Concluding Remarks 59
Chapter VI: Workers in the Online Outsourcing and Impact Sourcing
Industry
61
6.1 Gender 61
6.2 Age 62
6.3 Socioeconomic background 64
6.4 Educational background 65
6.5 Previous work experience 68
6.6 Motivation 70
6.7 Concluding Remarks 74
Chapter VII: Perceptions on Employment in the Online Outsourcing and
Impact Sourcing Industry in the Long Run
75
7.1 Perceptions of Online Freelancers on Employment in the Online Outsourcing Industry
in the Long Run 75
7.2 Perceptions of Impact Sourcing Managers and Impact Workers on Employment in the
Impact Sourcing Industry in the Long Run 82
7.3 Development of the Online Outsourcing and Impact Sourcing Industry: Implications for
Employment in the Long Run 87
7.4 Concluding Remarks 90
Chapter VIII: Conclusions, Reflections, and Recommendations
91
8.1 Summary of Main Research Findings 91
8.2 Theoretical Reflections and Suggestions for Further Research 93
6
Bibliography
97
Appendices
108
Appendix A – Operationalisation of Concepts 108
Appendix B – Respondents Semi-Structured Interviews and Focus Group 112
7
List of Figures
Figure 3.1 Conceptual scheme
Figure 3.2 Research location: the Philippines
Figure 5.1 Countrywide geographical distribution of the online outsourcing industry Figure 5.2 Online freelancers living in mainstream service outsourcing hubs (N=220) Figure 5.3 Countrywide geographical distribution of online freelancers specialised in
administrative support
Figure 5.4 Countrywide geographical distribution of online freelancers specialised in web, mobile & software development
Figure 5.5 Online freelancers living in mainstream service outsourcing hubs; Administrative support versus web, mobile & software development Figure 5.6 Locations impact sourcing initiatives
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List of Tables
Table 3.1 Overview of applied methods
Table 3.2 Upwork registered, Filipino online freelancers per job category in January 2016
Table 3.3 Semi-structured interviews: Number of respondents per unit of analysis Table 6.1 Online freelancers and impact workers by gender
Table 6.2 Age of online freelancers and impact workers
Table 6.3 Perceived financial status of family of online freelancers and impact workers Table 6.4 Educational background of parents of online freelancers and impact workers Table 6.5 Highest level of education attained by online freelancers and impact workers Table 6.6 Bachelor college course of college graduates
Table 6.7 Online freelancers and impact workers formerly employed in a mainstream BPO
Table 6.8 Motivation of online freelancers to work online Table 6.9 Online freelancers working part-time/full-time
Table 6.10 Motivation of impact workers to work for Visaya KPO Table 7.1 Online freelancers: Perceived work-related challenges
Table 7.2 Number of years of current online freelancers working in the online outsourcing industry
Table 7.3 Work-related aspirations for the future of current online freelancers Table 7.4 Online freelancers: Perceived, work-related advantages
Table 7.5 Impact workers: Perceived, work-related advantages
Table 7.6 Work-related aspirations for the future of current online freelancers Table 7.7 Impact workers: Perceived, work-related disadvantages
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List of Abbreviations
ADB Asian Development Bank BoP Base of the Pyramid
BPO Business Process Outsourcing GIS Geographical Information System CSR Corporate Social Responsibility
IBPAP Information Technology and Business Process Association of the Philippines ICT Information and Communications Technology
ICT4D Information and Communications Technology for Development
ICTO-DOST Information and Communications Technology Office – Department of Science and Technology
ISSP Impact Sourcing Service Provider
IT-BPM Information Technology and Business Process Management NCR National Capital Region
OFW Overseas Filipino Worker MOOC Massive Open Online Courses PEZA Philippine Economic Zone Authority PSA Philippine Statistics Authority SEO Search Engine Optimisation SEZ Special Economic Zone
UNDP United Nations Development Programme Visaya KPO Visaya Knowledge Process Outsourcing
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Chapter I: Introduction
1.1 Background to the Study
“I just wish that I didn’t have to explain my work to people in detail so they don’t misinterpret what I do as a scam or an indecent proposal. [...] Because my line of work is revolutionary, I find it hard to explain to people exactly what I do [..]. Sometimes, I even get the feeling that some folks think [..] I entertain male foreigners via video conference. [Therefore,] recently, so I can avoid all the drama, I just say that I’m a writer” (Mea in Bacolod 2015).
What this Filipino woman actually does for a living is work as an online freelancer in the online outsourcing industry via an online labour platform called Upwork1. Online outsourcing is typically described as virtual service outsourcing via online labour platforms. Such platforms facilitate the outsourcing of small-size service tasks from mainly small- and medium-sized, Western companies, to independent freelancers from all around the globe (Gefen & Carmel 2008; Beerepoot & Lambregts 2015). The activities outsourced vary widely from data entry tasks, to legal services, to web development (Ibid.).
Another industry in the Philippines which is equally unknown, unconventional, and “revolutionary” for being new is the impact sourcing industry. At the annual international Information Technology Business Process Management (IT-BPM) Summit of 2015 in Metro Manila, the Philippines, attendees were asked if they were familiar with the term ‘impact sourcing’. It appeared that 70 per cent had never heard of it. Although the term is sometimes used interchangeably with online outsourcing, this study refers to impact sourcing as a business process service delivery model through which domestic and international clients outsource IT-enabled work to marginalised individuals and/or to individuals who have traditionally been excluded from mainstream employment (Bulloch & Long 2012, 3; Heeks 2013, 23; Malik et al. 2013). The impact sourcing industry employs these individuals as principal workers in business process outsourcing (BPO) centres from where they conduct tasks which vary from voice-based services (e.g, telemarketing, inbound voice support) to non-voice-based services, including document digitisation, data entry, and e-commerce support (Everest Group 2014).
11 Both the online outsourcing and impact sourcing industry have recently emerged and can be considered sub-sectors of – or alternatives to – the mainstream type of service outsourcing, also referred to as BPO. This type is known as the outsourcing by large multinational corporations of “non-core, non-niche, ancillary business activities” (Panda 2012, 876) to domestic or overseas locations in order to exploit cheaper labour costs (Lu et al. 2013), improve product quality, expand services, or focus internal resources on core instead of non-core competencies (Le Bon & Hughes 2009, 1). Since their emergence, the online outsourcing and impact sourcing industry are on the rise worldwide. In 2013, the gross service revenue of the online outsourcing market amounted to approximately $2 billion and the size of the market is projected to grow to $4.8 billion in 2016 and $15 billion in 2020 (Kuek et al. 2015, 3). In addition, research witnessed a continuing increase in the types of tasks outsourced via online labour platforms which suggests that the industry has become increasingly significant and that it won ground in a diverse range of industries (Lu et al. 2013; Massolution 2013). With respect to the global impact sourcing industry, due to a variety of definitions being used, it is rather difficult to pin down the exact size of the market. Estimates range from $4.5 billion in 2011 and $20 billion in 2015 (Monitor 2011, 4) to $6 billion in 2010 and $24 billion in 2015 (Bulloch & Long 2012, 19). It is agreed, however, that the market is growing steadily, both in terms of market revenue and with regard to the number of workers that it employs (Bulloch & Long 2012; Monitor 2011; Everest Group 2014).
Whilst on the rise, the potentials of both models have come to the fore, several of which can be framed within the information and communication technologies for international development (ICT4D) discourse. ICT4D concentrates on the role of ICT in the improvement of socioeconomic conditions in developing countries (Avgerou 2010; Heeks 2009). Being an ICT-based model, impact sourcing purposely sets out to achieve this aim. Namely, for impact sourcing, “the value [..] is business process service delivery but with optimised enhancements” (Everest Group 2014, 8). To achieve such enhancements, the model aims to employ marginalised individuals living in low-employment areas in developing countries (Bulloch & Long 2012; Heeks 2013; Everest Group 2014; Avasant 2012). In contrast, the online outsourcing model does not intentionally aim for the creation of “optimised enhancements”. However, over the years, online outsourcing developed to become a model which potentially reaches underprivileged workers residing in places in developing countries where there are only a few formal, high-income employment opportunities (Kuek et al. 2015). This is because employers in the online outsourcing industry focus on workers’ skills sets rather than their age, sex, educational background, or whether they suffer from a health
12 condition (Elance-oDesk 2014; Elance 2013). As such, the industry could be opening up the labour market to otherwise underprivileged workers who, in seeking mainstream employment, are discriminated for any of these ̶ or other ̶ reasons. Moreover, it appears that working online has become most popular among workers in developing countries, such as India, the Philippines, and South Africa (Elance 2013; Beerepoot & Lambregts 2015; Agrawal et al. 2013). What is more is that the work requires only a computer and internet connection, thereby potentially opening up the labour market to workers living anywhere across these countries, including remote areas with only a few formal, high-income employment opportunities (Elance 2013; Kuek et al. 2015, 1).
1.2 Main Objectives and Relevance
Based on the aforementioned potentials, the objective of this study is to contribute to an improved understanding of the implications of online outsourcing and impact sourcing for socioeconomic development. In order for this to be achieved, it draws on inclusive growth theory as a guiding framework. This choice is supported by the ICT4D discourse which contends that “inclusive” is one way to address the needs of the poor (Heeks 2009, 3) and argues that it is a development-oriented priority which is currently under-represented in ICT4D (Heeks 2014, 13-27). In addition, the decision to study the industries through the lens of inclusive growth theory is funded by a discussion on the implications of mainstream service outsourcing for development. One stand in this debate is that countries such as India and the Philippines welcomed the industry for creating a massive amount of high-income jobs, respectively 3.1 million (NASSCOM 2014) and one million (de Vera 2014). The other stand criticises the industry for benefitting certain groups of people disproportionately (D’Costa 2011; Ilavarasan 2007; Bardhan 2006; Krishna and Nederveen Pieterse 2008). Namely, the industry typically employs workers who stem from a middle-class background, are highly educated, and have substantial knowledge of the English language (Bird & Ernst 2009; Mitra 2011; D’Costa 2011; Ilavarasan 2007). Moreover, it is argued that the industry generates employment solely in large urban areas (Kleibert 2015a, 146-150; Tschang 2011, 20-21). As a result, mainstream service outsourcing is criticised for creating only limited direct employment opportunities for the poor and less-educated and for people living outside of large, urban hubs. This, in turn, is argued to exacerbate within-country economic disparity (Bardhan 2006; Krishna & Nederveen Pieterse 2008).
Derived from this debate, this study aims to provide insight into the workers which are employed in the online outsourcing and impact sourcing industry to identify which workers
13 have access to employment in either of the industries. Particularly, it assesses their gender, age, socioeconomic and educational background, and previous work experience. Second, this study sets out to gain an understanding of the countrywide geographical distribution of the industries. It analyses the places of residence of workers employed in the online outsourcing industry as well as the locations of impact sourcing initiatives. By addressing these aspects, this research allows for an understanding of how the employment opportunities offered by either of the industries are socially and geographically inclusive, thereby gaining insight into the way in which the industries contribute to achieving inclusive growth objectives.
This study’s third objective is to contribute to inclusive growth theory by arguing that in addition to socially and geographically inclusive employment opportunities, the viability of these opportunities in the long run also make for inclusive growth. Therefore, it assesses the perceptions of a range of industry stakeholders with respect to the long-term prospects of employment provided by the online outsourcing and impact sourcing industry. Emphasis will be placed on the challenges and advantages experienced by workers employed in either of the industries as well as by the managers of impact sourcing initiatives. Moreover, it analyses the challenges and opportunities faced by the models as such. Finally, based on the previous three objectives, this study sets out to critically compare the online outsourcing and impact sourcing industry from an inclusive growth perspective.
1.3 Case Study: The Philippines
In pursuit of achieving the research objectives, this study uses the country of the Philippines as a case study. Starting from the early 2000s, the country emerged as one of the most popular service outsourcing destinations in the world (IBPAP 2012), as a result of which it stands to reason that in their early stages of existence, the online outsourcing and impact sourcing industry are located in the Philippines. Regarding the former industry, Filipino workers appear to be disproportionately active on Upwork. The country classifies as an “over-user” in proportion to its population size (Agrawal et al. 2013, 13, 36). Compared to other countries, the Philippines ranked third with respect to total country earnings (Elance-oDesk 2014, 16) and fourth in terms of number of active online freelancers (Elance 2013).
1.4 Outline of the Study
This study consists of eight chapters. Following the introduction, the chapters two and three lay the groundwork. The former discusses the theoretical framework. It elaborates on ICT4D and discusses its linkages with online outsourcing and impact sourcing. Additionally, in this
14 chapter I conceptualise inclusive growth. Chapter three then presents the research framework. It touches upon the research questions, conceptual scheme, and the Philippines as a research location. Moreover, it presents the research design, including the ontological and epistemological position, research methodology, methods, and an assessment of the research quality. The chapter concludes by reflecting on the study’s ethical considerations.
Thereafter, in chapter four, the study provides an overview of mainstream service outsourcing in the Philippines starting from the early 2000s. Moreover, it elaborates on the sector’s status quo by putting BPO workers, the industries’ countrywide geographical distribution, and the extent to which the sector offers employment in the long run into review. Subsequently, it explains how the Philippines’ online outsourcing and impact sourcing industry relate to the country’s mainstream service outsourcing sector and discusses their particulars.
In chapter five, six, and seven, empirical data are presented and analysed. Chapter five and six discuss and compare respectively the geographical distributions of the online outsourcing and impact sourcing industry and the characteristics of workers employed in these industries. Chapter seven analyses the long-term prospects of work in either of the industries as is perceived by their stakeholders.
Finally, chapter eight provides a summary and conclusions of the main research findings. In addition, it offers a critical reflection of the theories and methodology which form the foundation of the study. Lastly, it discusses the implications of the research findings for domestic policy in the Philippines and it presents suggestions for further research.
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Chapter II: Theoretical Framework
To begin with, this chapter elaborates on ICT4D. It discusses the differentiation between ICT4D 1.0 and 2.0 and explains how this study closely aligns with the latter. Subsequently, it links online outsourcing and impact sourcing to ICT4D after which it conceptualises this study’s guiding framework, i.e. inclusive growth theory.
2.1 ICT4D
In India in 1956, the first digital computer was put to a use in a developing country. From that point onwards, until the mid/late 1990s, IT (ICT’s precursor) in developing countries was applied mainly to internal administrative functions of the public sector. Alternatively, large corporations used IT as a tool for delivering economic growth in the private sector (Heeks 2009, 2-3; Heeks 2008, 26). This phase, also referred to as ICT4D2 0.0, was followed by a period in which the general availability of the internet triggered an increased interest in ICTs after which the Millennium Development Goals (MDGs) put them on the development agenda (Heeks 2009, 3; Heeks 2008, 27). This gave birth to ICT4D 1.0 which practiced ICT4D mainly by establishing tellecottages or telecentres in rural areas. These were basically rooms or buildings with one or more internet-connected PC which could deliver information, communication, and services to poor communities, meaning those who live on an average of less than $2 per person per day. The main drivers behind the telecentres were Northern-dominated donors such as international development organisations and non-governmental organisations (NGOs) (Heeks 2009 3-4; Heeks 2008, 27). However, despite their efforts, “failure, restriction, and anecdote” characterised the outcome (Heeks 2009, 4). The projects failed to be sustainable, had only a limited reach, and their impacts were not evaluated objectively (Ibid.).
Lessons were learned from project failure which gradually gave way to ICT4D 2.0 in the mid and late 2000s. Although there is no consensus on what ICT4D 2.0 looks like, one can sketch some component parts (Heeks 2008, 27). First, in comparison to ICT4D 1.0, an increasing amount of actors became involved, including the private sector, Southern governments, Southern aid donors as well as revived Northern-dominated donors (Heeks 2009, 16). Second, the focus shifted from policy and infrastructural “readiness” and “availability” of ICT to what is called “uptake” and “impact”. The latter two are concerned
2 Two different acronyms commonly used in the literature are ISDC (information systems in developing
countries) and ICTD (ICT and development). Although they differ in some aspects, they tend to refer to the same thing.
16 with respectively the ways in which we can implement and apply ICT to make it useful and how one can use ICTs to make the greatest developmental impact (Ibid., 28-29). Third, and most importantly, ICT4D 2.0 conceptualises the poor as active innovators and producers of digital content rather than as passive consumers. It views ICTs as tools which the poor can use to create new incomes and jobs. Consequently, whereas ICT4D 1.0 took an invention-down approach, focussing on bringing new technologies into development contexts, ICT4D 2.0 adopts a use-up approach in aiming to understand how existing technologies are being applied within poor communities. To put it differently, where ICT4D 1.0 marginalised the poor through a supply-driven focus, ICT4D 2.0 centralises them and creates a demand-driven focus (Heeks 2009; Heeks 2008).
In accordance with ICT4D 2.0, rather than viewing the poor as passive consumers, this study views them as active innovators and producers of digital content. It uses the potentials of online outsourcing and impact sourcing to be ICT4D business models as a starting point and analyses to who and where in the Philippines the industries offer employment. In doing so, this study assesses the practical viability of online outsourcing and impact sourcing to be ICT4D models. Moreover, it assesses how these models are used by the poor to create sustainable incomes and jobs.
2.2 Online outsourcing and ICT4D
ICT advancements, which facilitated the increasing outsourcing and offshoring of service activities, is what caused Friedman (2005) to argue that nowadays “the world is flat”. He stated that due to location becoming less important, the world has turned into a level playing field in which companies in countries with relatively high wage rates, can outsource and offshore production tasks in order to profit from relatively low wage rates abroad. To prevent ambiguity, the term ‘outsourcing’ refers here to the decision to buy products or services, which were previously produced internally, from another (domestic or offshore) company (Massini & Miozzo 2012, 1221). Offshoring, in turn, refers to a company obtaining goods or services from a foreign-based entity, be that a subsidiary (captive or international insourcing) or a third-party contractor (offshore outsourcing) (Beerepoot & Lambregts 2015, 239).
Essentially, both mainstream service outsourcing and online outsourcing rest on the potential to decrease production costs by outsourcing tasks to relatively low-wage countries. However, the industries differ in three ways. First, whereas the former involves mega-deals requiring strategic considerations, the latter facilitates small-scale outsourcing and, hence, is much more flexible in nature. Second, online outsourcing clients are generally small and
17 medium-sized firms, while mainstream service outsourcing often involves large multinational corporations. Third, contrary to mainstream service outsourcing occurring in offline contexts, online outsourcing is practiced online (Lu et al. 2013). It is facilitated by “internet-based marketplaces” (Kuek et al. 2015, 7) which establish direct contact between service demanders and service providers. Since the late 1990s, various marketplaces emerged with Upwork being the leading firm in the market these days (Ibid.). Other examples of internet-based marketplaces are Freelancer, Zhubajie/Witmart, Guru, Peopleperhour, CrowdFlower, Amazon Mechanical Turk, Samasource, CloudFactory, and Microworkers (Ibid.). These online labour platforms are part of the broader “platform economy” which includes service delivery models such as Uber and Airbnb. Despite there being a great variety in the type of services traded via the platform economy, all platforms share the ability to unbundle service value chains (Accenture 2016; Evans & Gawer 2016). As for online labour platforms, over time they could render the mediating role of BPO companies, which have traditionally been at the heart of the mainstream service outsourcing model, redundant and cut them out of the value chain (Vanham 2012).
In a 2015 report by the World Bank, online outsourcing is defined as:
“The contracting of third-party workers and providers (often overseas) to supply services or perform tasks via internet-based marketplaces or platforms. These technology-mediated channels allow clients to outsource their paid work to a large, distributed, global labour pool of remote workers, to enable performance, coordination, quality control, delivery, and payment of such services” (Kuek et al. 2015, 7).
In following this definition, this study differentiates between two major segments of online outsourcing, i.e. microwork and online freelancing. On the one hand, microwork refers to the online outsourcing of micro-tasks, such as image tagging, text transcription, and data entry. These tasks require only seconds or minutes to be completed and demand relatively basic numeracy and literacy skills from online freelancers3. As a result, microwork’s barrier to entry is rather low and, in exchange for service delivery, online freelancers receive relatively small amounts of money (Ibid.). On the other hand, with online freelancing, relatively large projects
3 Following Elance (2013), for the remainder of this study online outsourcing employees are referred to as
‘online freelancers’. As for their counterparts, online outsourcing employers, they are referred to as ‘clients’, meaning those actors who hire online freelancers on online labour platforms.
18 which take days or months to be completed, are outsourced. Examples include web development, technical report writing, and graphic design. The projects are more complex and therefore require a relatively high level of expertise. Consequently, wages are comparatively high, yet, the barriers to entry are high too (Ibid.). Note, however, that despite the theoretical differentiation, in practice the boundary between microwork and online freelancing is blurry and they often overlap (Ibid.).
Both microwork and online freelancing are beneficial to clients, who save money and are provided with the ability to tap from distant skills and resources (Lu et al. 2013), and online freelancers for whom online outsourcing takes away the need to migrate to places where their skills are in demand (Elance 2013). By rendering location irrelevant, this new model of service provision has the potential to employ freelancers from all around the globe. In effect, microwork and online freelancing has become most popular in developing countries, particularly India, Pakistan, the Philippines, Bangladesh, Kenia, and South Africa. These countries are among the worlds’ top providers of online freelancers (Ibid., 14-15). This is no surprise considering the workings of online labour platforms. Whenever a client posts a job, freelancers can apply by stating the hourly wage or fixed wage for which they would be willing to work. Since they can see the bids from their fellow freelancers, this results in a situation which is referred to as “reverse auction” (Beerepoot & Lambregts 2015, 244) wherein workers from developing countries are in the position to outbid, or practically underbid, those residing in developed countries simply because of the difference in costs of living. Even more so, the online outsourcing model has the potential to open up the labour market to people residing in remote places in developing countries where there are only a few formal and/or high-income employment opportunities. Namely, in theory, the only things required to engage in freelancing online are a computer and internet connection (Elance 2013, 39).
In addition to offering work to individuals living in remote areas in developing countries, online outsourcing potentially reaches out to workers who are underprivileged for reasons of their age, sex, educational background, or because they suffer from a health condition (Elance-oDesk 2014; Elance 2013). Namely, rather than focussing on any of these characteristics or attainments, clients are interested in online freelancers’ skills, required to effectively complete jobs (Elance-oDesk 2014, 1). This is due the short-term, project-based nature of work outsourced via online labour platforms which causes clients to be focused more on results than on, for instance, prove of an online freelancers’ intellectual ability (e.g. a college diploma) (Ibid.). Moreover, due to the geographical and cultural distance between
19 clients and online freelancers, the former can obtain only a limited understanding of the latter’s qualities. Hence, in deciding who to hire, rather than emphasising personal characteristics and attainments, they rely on online freelancers’ track record and rating which is based on feedback from previous clients (Beerepoot & Lambregts 2015). As such, the industry could be opening up the labour market to otherwise underprivileged workers who, in seeking mainstream employment, were discriminated for reasons of their age, sex, educational background, health status, or for any other reason.
In light of these potentials, although the online outsourcing business model did not intentionally emerge as a type of ICT4D initiative, it developed to become a model which potentially reaches out to underprivileged workers and to workers residing in developing countries, possibly in places where there are only a few formal and/or high-income employment opportunities. Taking this into account, it is remarkable how research, thus far, failed to explore these issues. Instead, a significant part of the existing work centres around the broader issue of online labour platforms inherently being settings of low trust. To put it differently, many authors focussed on the meaning and consequences of the spatial and cultural distance between clients and online freelancers (Gefen & Carmel 2008; Ghani et al. 2012; Mill 2011; Gefen & Carmel 2013; Pallais 2014; Stanton & Thomas 2012). Alternatively, Lu et al. (2013) analysed clients’ incentives for outsourcing via online platforms and found that rather than cost reduction, the ability to tap from distant resources explains their choice to engage in online outsourcing. In addition, Beerepoot and Lambregts (2015) analysed how online freelancers experience competitiveness on online platforms. They concluded that online freelancers, particularly those who stand at the start of their online career, experience intense competition and inherent restrictions which limit their financial gains. This study aims to add to the existing body of literature on online outsourcing by adopting a new focus, which is to analyse the development implications of this ICT-based business model.
2.3 Impact Sourcing and ICT4D
Contrary to online outsourcing, impact sourcing purposely sets out to achieve developmental benefits. It has previously been referred to as ‘social outsourcing’ (Heeks & Arun 2010; Madon & Sharanappa 2013) and may also be named ‘developmental outsourcing’ (Heeks 2013, 22), ‘socially responsible outsourcing’ (Nicholson et al. 2016), or ‘rural impact sourcing’. In essence, impact sourcing is a business process service delivery model like mainstream service outsourcing for both focus on delivering high quality IT-related services
20 at the lowest cost possible (Heeks 2013; Gino & Staats 2012, 96). However, contrary to mainstream service outsourcing, impact sourcing goes beyond simple contract fulfilment by aiming to create positive societal impacts. This is to be achieved by looking beyond the common source of supply for mainstream service outsourcing (Bulloch & Long 2012, 3). Specifically, through impact sourcing, clients outsource tasks such as image and video tagging, data entry and processing, translation, and call centre services (Heeks 2013, 24) to marginalised individuals in society. In doing so, they wish to meet their corporate social responsibility (CSR) objectives, access an untapped labour pool, lower workers’ attrition, and/or save on the costs of business outsourcing and offshoring (Monitor 2011; Heeks 2013, 23; Gino & Staats 2012, 94; Bulloch & Long 2012, 43). They are assisted by impact sourcing service providers (ISSP) which are intermediaries who buffer the relationship between impact workers4 and clients. Generally speaking, ISSPs own the outsourcing contract and therefore both interact with clients and are responsible for guiding the impact workers (Bulloch & Long 2012; Monitor 2011, 7-8).
According to Heeks (2013), these impact workers are marginalised individuals who live at the base of the pyramid (BoP), averaging income levels of less than $2.50 per person per day (p. 23). In contrast, Bulloch and Long (2012) define them as disadvantaged individuals living in low-employment areas (p. 3) and according to Avasant (2012), impact sourcing focusses on engaging poor and vulnerable people who may not otherwise qualify for a mainstream BPO job (p. 10). Everest Group (2014) goes beyond these narrow conceptualisations and assumes impact sourcing to offer employment to economically (living at the BoP, residing in low-employment areas, e.g, remote, rural areas or slums) and/or socially marginalised people (for reasons of belonging to a minority group, their level of education/age/gender). Moreover, it assumes the industry to reach out to individuals who suffer from disadvantageous life circumstances, such as a physical disability or health condition. This study accepts this broad conceptualisation but adds that impact sourcing aims at employing individuals who have traditionally been excluded from mainstream employment.
In light of its objective to target marginalised individuals and considering that it is an ICT-based model, impact sourcing classifies as a type of ICT4D initiative (Nicholson et al. 2015; Heeks 2014, 22). Consequently, a great deal of research on the model has been guided by the ICT4D discourse and development literature. For example, Malik et al. (2013) and Madon and Sharanappa (2013) assessed the social development implications of impact
4 In line with Everest Group (2014), for the remainder of this study the term ‘impact worker’ refers to service
21 sourcing organisations in India by using Amartya Sen’s and, derived from that, Martha Nussbaum’s capability framework. In contrast, Heeks and Arun (2010) assessed the developmental impacts of impact sourcing by drawing from a sustainable livelihoods framework. Each of these studies found that impact sourcing is able to provide a variety of developmental benefits to impact workers and their community. They found that involvement in impact sourcing leads to growth in impact workers’ income (Heeks & Arun 2010; Malik et
al. 2013) and strengthens their human capital, i.e. their operational computer skills, English
language skills, and knowledge of ICT (Madon & Sharanappa 2013; Heeks & Arun 2010; Malik et al. 2013). Moreover, they found that involvement in impact sourcing improved the social empowerment of female workers, who experienced greater respect, recognition, and acceptance within their families (Heeks & Arun 2010; Madon & Sharanappa 2013; Malik et
al. 2013).
Rather than assessing the developmental benefits of impact sourcing on its workers, yet still in close alignment with the ICT4D discourse, this study adopts an innovative approach in analysing the workers as such. In addition to studying workers’ traits and characteristics (e.g. their age, gender, socioeconomic and educational background, and previous work experience), it focusses on where in the Philippines the impact sourcing industry offers employment. In doing so, it goes back to the root of the impact sourcing aim by questioning whether the model, in practice, reaches out to individuals who are in any way marginalised. Moreover, it examines whether the model successfully employs them both in the short and the long run.
2.4 Inclusive Growth Theory
2.4.1 Conceptualisation of Inclusive Growth
To assess the potentials of online outsourcing and impact sourcing to positively contribute to development, this research utilises inclusive growth as a conceptual framework. Popularity of the concept has grown over the past decades during which Asia achieved high economic growth in an increasingly globalised world (ADB 2011). Yet, despite a related decline in the incidence of poverty, the rich and the poor did not benefit equally, resulting in widening income and non-income inequalities (Ali 2007; Ali & Zhuang 2007; Ali & Son 2007). Identified as one of the underlying causes, globalisation presented new challenges and constraints. It affected the way in which the benefits of growth and deeper economic integration were distributed across geographical space and among different population groups, communities, households, and individuals (Cook 2006, 52).
22 This line of events in Asia illustrated that economic growth alone is not sufficient to eradicate absolute poverty (Cook 2006, 51; Ali & Son 2007, 11; Chatterjee 2005, 37). In addition, countries became concerned about relative poverty. Rather than viewing inequality as something inherent to the process of growth (Lewis 1983), it became widely accepted that due to inefficient allocation of physical and human capital, inequality impacts on growth negatively. Moreover, it was acknowledged that persistent and high inequality rates could endanger sustained growth and may lead to social and political unrest (Ali 2007, 8-9; Cook 2006, 51). Consequently, in the early 2000s, many Asian developing countries, development partners, including bilateral and multilateral aid agencies, international organisations, non-governmental organisations, and civil societies embraced inclusive growth as a development concept (Ali & Zhuang 2007, 1).
Since its emergence, the concept of inclusive growth has been approached in various ways. It was first introduced by the World Bank, which focusses on productive employment creation, rather than on direct income distribution so that economic growth generates jobs needed to absorb the growing labour force. For growth to be sustainable, it should be broad-based across sectors, and inclusive of most of a country’s working age population (World Bank 2009; OECD 2014, 80). The Asian Development Bank (ADB), thereafter, adopted a wider definition which includes social and institutional constraints in addition to economic constraints to inclusion (Rauniyar & Kabur 2009). The United Nations Development Programme (UNDP) added to the development of the concept by arguing that inclusive growth is to be considered as both an outcome and a process. In doing so, it aims to ensure that, on the one hand, everyone can participate in the growth process and, on the other hand, everyone stands to benefit equally (OECD 2014, 80).
In spite of inclusive growth being conceptualised in various ways, all approaches share similar roots, i.e. increased economic growth with greater equity (OECD 2014, 79). This research aligns closely with an approach developed by Ali (2007), Ali and Son (2007), and Ali and Zhuang (2007), who view inclusive growth as creating economic opportunities and ensuring equal access to these opportunities, especially for the most marginalised in society, including the poor, vulnerable, disadvantaged, women, and elderly. Their view is based on the notion that rising income and non-income inequalities result from inequalities in the access to opportunities. These opportunities can be manifold and concern a range of amenities, such as access to clean drinking water, sound sanitation, healthcare, physical infrastructure, education, and employment. The ADB (2011; 2014a) builds on this conceptualisation of inclusive growth and distinguishes between three dimensions of opportunities: the economic, social,
23 and institutional dimension. They each serve as indicators of inclusive growth. The first dimension emphasizes the importance of employment opportunities for the poor and vulnerable groups in society as well as the role of agriculture, the rural economy, and (rural) infrastructure investment. The social dimension is concerned with social security, social safety nets, and healthcare provision. Third, the institutional dimension focusses on the realisation of social inclusion, social and political empowerment, and broad-based citizen participation (Rauniyar & Kanbur 2009, 4-5; ADB 2011; ADB 2014a). Derived from this distinction, this research focuses on the economic dimension. Specifically, it analyses where in the Philippines (geographical inclusion) and to who (social inclusion) the online outsourcing and impact sourcing industry offer employment.
A more specified focus on the geographical and social inclusiveness of employment is justified by Cook (2006) and Ali (2007), who argue that the challenges facing Asian countries in achieving inclusive growth can be examined along two dimensions. First, “place” or the “spatial dimension” is concerned with inaccessible and resource-poor regions where the conditions make it difficult for inhabitants to benefit from economic growth. Such regions may be either remote, rural areas or deprived, overcrowded urban environments like slums. The second dimension termed “people”, focusses on identity-based exclusion, meaning that it focusses on marginalised individuals, households, or communities who do not stand to benefit from economic growth for reasons of their personal traits and characteristics. Where these two dimensions overlap, the most problematic and intractable forms of poverty and exclusion occur (Cook 2006, 60). Therefore, to address the challenges posed by the spatial and social dimension, proactive policymaking by the state and contributions from other actors are required (Chatterjee 2005; ADB 2014a). This research concentrates on the contributions from the latter. Specifically, it analyses the contribution of private sector firms involved in online outsourcing or impact sourcing.
2.4.2 Long-Term Employment as Indicator of Inclusive Growth
With respect to inclusive growth strategies, the ADB (2011; 2014a), Ali and Zhuang (2007), and Ali (2007) each speak of the creation of “productive” and “decent” employment for all. This study argues that in order for employment to possess these traits, it ought to be viable in the long run too. Namely, labour productivity increases along with the amount of time a worker has worked on a certain job. Moreover, there is a moral argument inherent in creating employment which is viable both in the short and long run, i.e. employment fails to be decent if a worker cannot be secure of his/her job and income. If a worker’s job is continuously
24 under threat, it stands to reason that his job cannot be considered decent. As a result, this study adds to inclusive growth theory by arguing that the creation of employment which is viable in the long run, as well as geographically and socially inclusive, makes for inclusive growth. In doing so, it responds to Mthoko and Khene (2015) who argue that research should assess whether ICT4D mechanisms ensure that positive outputs, outcomes, and impacts are continuous and not short-lived (p.3).
2.5 Concluding Remarks
This chapter highlighted that both the impact sourcing and online outsourcing industry, either intentionally or unintentionally, have the potential to open up the labour market to underprivileged workers residing in remote areas in developing countries. Therefore, in analysing these potentials, this study places itself within the ICT4D literature and uses inclusive growth theory as a guiding framework. The proceeding chapter explains precisely how the analysis was conducted.
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Chapter III: Research Framework
This chapter outlines the research questions and provides the reader with a conceptual scheme illustrating the main concepts and the relationships between them. Thereafter, it elaborates on the Philippines as a research location and illustrates the research design, including the ontological and epistemological position, the research methodology, research methods, and a critical reflection on the quality of the research as such. Finally, it touches upon the ethical considerations.
3.1 Research Questions
The main research question of this study is as follows: How do the online outsourcing
industry and impact sourcing industry contribute to inclusive growth objectives by spreading the employment opportunities of service outsourcing in the Philippines?
To answer this research question, four sub-questions have been formulated:
1. How are the industries geographically distributed across the Philippines and what explains their geographical distribution?
2. What workers have access to employment in the industries and what explains their access?
3. How do industry stakeholders perceive the long-term prospects of work in the industries?
4. How do the two industries compare in the provision of inclusive employment and what explains the differences and similarities?
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3.2 Conceptual Scheme
For concise operationalisations of the main concepts illustrated in this scheme, see appendix A.
Figure 3.1 – Conceptual scheme
27
3.3 Research Location: the Philippines
The Republic of the Philippines is located in Southeast Asia (see Figure 3.2), is made up of approximately 7,000 islands (Lopez-Quimpo 2014), and houses an estimated population of 103 million people (Philippine Statistics Authority (PSA) 2015(a)). Metro Manila, the countries’ capital city, is situated on the largest island Luzon.
28 The Philippines classifies as a lower middle income country with 25.2 per cent living of less than $1.25 per day in 2012 (World Bank 2015). In that same year, income shares held by the lowest 20 per cent amounted to 5.9 per cent of total national income, whereas the share of income held by the highest 20 per cent was measured at 49.7 per cent (Ibid.). Accordingly, the Gini coefficient was estimated at 0.43 in 2010, being among the highest of all countries in Southeast Asia (OECD 2014, 20). In comparison, in OECD countries, the average Gini coefficient amounts to 0.32 (Ibid., 17).
From 2011 until 2015, the Philippines achieved stellar annual GDP growth rates hovering around six per cent (ADB 2016). It is, however, argued to be ‘jobless growth’ for it is coupled with only little inclusive and sustainable job creation (ADB 2014b). Hence, in October 2015, 5.6 per cent of the working-age population was unemployed and 17.7 per cent was underemployed (PSA 2015(b)). What is more, is that with a projected population growth rate of 1.5 per cent over the next fifteen years, the population is expected to increase to 142 million by 2045 (PSA 2015(a)). In comparison, most developed countries have a population growth rate averaging only 0.4 (Bulloch & Long 2012, 12). Related to projected population growth is that the working-age population of the Philippines is expected to grow from 62 per cent in 2010 to 67.5 per cent by 2045 (PSA 2015(a)). Consequently, the country is challenged not only to address current- but also future unemployment and underemployment.
Another challenge faced by the Philippine government is the spatial mismatch between where work is located and where the working-age population resides. Since Filipinos “feel” that work, or employment opportunities, mainly concentrates in cities, people from rural areas tend to migrate to the countries’ larger urban areas as a livelihood strategy (Quisumbing & McNiven 2007). As a result, the country has witnessed rapid urbanisation over the past decades, up to the point where in 2010 almost half of the population lived in urban areas (PSA 2015(c)). This has caused numerous problems, particularly in Metro Manila, where city planning and government service provision failed to keep pace. Consequently, the city nowadays faces extreme urban poverty, a lack of decent housing, an inadequate public transport systems, air and noise pollution etc. (Armstrong & McGee 2007, 69; Kleeman 2010) In response to these problems, through the Urban Development and Housing Act of 1992, the government of the Philippines envisioned to slow down the urbanisation process by developing other growth areas in the countryside (HUDCC 1992, s38). As of today, the country still holds on to this strategy.
On a final note, since online outsourcing and impact sourcing are highly dependent on internet access, it is important to mention that between 2008 and 2012, internet access in the
29 Philippines grew by over 500 per cent (Greene 2014). During this period, many people gained access to the internet for the first time, while others gained more consistent and better quality access. However, despite major improvements in the countries’ digital infrastructure, growth came to a halt at 43 per cent of Filipinos having internet access at home via any device type in 2016 (Internet Live Stats 2016.). Moreover, the service quality has remained highly inconsistent across the country (Greene 2014). A recent study on consumer internet speed found that the Philippines ranks one but last among all Asian countries. Only consumers in war-torn Afghanistan reported a slower average broadband download speed (GMA News Online 2015). On top of that, the Philippines has some of the most expensive internet connections in the world. Philippine internet users spend $18.19 per Mbps, compared to an average of $5.21 per Mbps worldwide (Ibid.). Lastly, what is problematic is that internet connection is considerably less common in rural areas than in urban areas (Greene 2014).
3.4 Research Design
3.4.1 Ontological and Epistemological Position
Since the 1960s, economists gradually embraced alternative ontological and epistemological stands, thereby moving beyond the homogeneous acceptance of the positivist perspective. Consequently, the present state of economics is argued to be “methodologically polymorphous” (Steinmetz 2005, 15). Touching upon the discipline of economics, this research draws on a critical realist perspective, a philosophy of social science which is positioned in between positivism and interpretivism. Similar to positivism, critical realism is a realist philosophy and supports the idea of a reality which exists independent of our knowledge or perception of it (Zachariadis et al. 2013; Sayer 2006, 98). However, it diverges from positivism and moves toward interpretivism in that it assumes that our understanding of this reality is a social construct dependent upon the details and processes of its production, e.g. facts, theories, models, methods etc. (Zachariadis et al. 2013; Fairclough 2005). Hence, the process of knowledge production is viewed as historically emergent, political, and imperfect (Ibid., 3). To put it differently, it is context-dependent, rendering it irrelevant to rely on the discovery of empirical regularities (Sayer 2006, 101). Consequently, critical realists differ from positivists in their conception of science. Namely, in terms of causality, instead of viewing a cause as a consistent regularity between one event and another, critical realists view a cause as a mechanism that produces change. This change is spatially and temporally variable (Sayer 2006, 101). Therefore, they aim for an understanding of the processes and conditions under which change is brought about (Ibid., Zachariadis et al. 2013). As such,
30 critical realists contend that all objects, e.g, people, institutions, and discourses, have causal powers, yet, they also have particular causal susceptibilities. Hence, they give due consideration to both human agency and structure (Sayer 2006, 101).
Following the critical realist approach to social science research, this study distinguishes between the real, the actual, and the empirical domain. First, the real domain consists of unobservable causal mechanisms, structures, and processes (in this research ‘globalisation’). The actual domain consists of events (online outsourcing and impact sourcing) generated by these mechanisms and the empirical comprises the experiences of the events (experiences of all stakeholders involved in either of the industries) as such (Harrits 2011, 155; Zachariadis et al. 2013, 3-4). This distinction aids in understanding that, according to critical realists, researchers cannot obtain objective knowledge about reality, e.g. the unobservable causal mechanisms generating online outsourcing and impact sourcing (Ibid., 3). Nevertheless, in focussing on the experiences of the stakeholders involved in either of the industries, it attempts to approximate them.
3.4.2 Methodology
Critical realism calls for a mixed methods design (Harrits 2011; Downward & Mearman 2006), defined as “the collection, analysis, and integration of quantitative and qualitative data in a single study” (Creswell & Plano Clark 2007 cited by Denzin 2012, 81-82). This research adopts such a design, simply by responding to the methods required to answer each individual sub-question and by distinguishing between the methods needed to study the online outsourcing and impact sourcing industry. A focus on the research questions as such, rather than on common methodological practices produced by dichotomous boundaries between different scientific strands of research, is a strong characteristic of mixed methods research (Denzin 2012; Functowitz 2003). Moreover, the use of multiple methods, or triangulation, contributes to an in-depth understanding of the social phenomenon in question. Specifically, triangulation adds to the “rigor, breadth, complexity, richness, and depth” of an inquiry (Denzin 2012, 82).
3.4.3 Methods
Table 3.1 provides an overview of this study’s mixed methods design and data integration. It illustrates the applied methods and corresponding sub-question(s), industry, and unit(s) of
31 analysis, which are discussed in detail in this subsection. All data were collected during a three-month fieldwork period, from August until November 2015, in the Philippines.
Method Sub-question Industry Unit of analysis
GIS mapping 1 Online
outsourcing
Online freelancers working via Upwork
Semi-structured interviews
1 Online
outsourcing
Former, current, and future online freelancers working via Upwork
Impact sourcing
Manager(s) of Visaya KPO and DataMotivate and stakeholders from Accenture Philippines
2 and 3 Online outsourcing
Former, current, and future online freelancers working via Upwork
Impact sourcing
Manager(s) of Visaya KPO, stakeholders from Accenture Philippines, and impact workers of Visaya KPO
Facebook observations
1, 2 and 3 Online outsourcing
Former, current, and future online freelancers working via Upwork
Focus group 3 Online
outsourcing
Current online freelancers working via Upwork Content
analysis
3 Online
outsourcing
Online blogs and the Upwork website
Table 3.1 – Overview of applied methods
GIS Mapping
To study the geographical distribution of the online outsourcing industry across the Philippines, spatial analysis was conducted by using a geographical information system (GIS) called ArcMap 10.1. Since online freelancers typically work from home (Elance-oDesk 2014), data on the places of residence of Filipino freelancers were collected on Upwork, where the information can be found on their personal profile pages. The online labour platform categorises them all by distinguishing between twelve job categories which, in turn, are subdivided into subcategories. Table 3.2 enlists all categories and illustrates the total number of Filipino online freelancers registered within each category5. They show a strong preference for administrative support, customer service, and writing.
For this study, two categories have been selected to map Filipino online freelancers’ place of residence, namely, administrative support and web, mobile, and software development. Whereas the former category demands fairly low-skilled labourers, the latter requires relatively high-skilled labourers (Elance-oDesk 2014, 1). This representation compares to the subdivision of online outsourcing into microwork and online freelancing
5 Since online freelancers are free to subscribe to more than one category, the total of all numbers enlisted below
32 wherein administrative support exemplifies the former and web, mobile, and software development the latter. Both categories are substantial with respect to the number of Filipino online freelancers subscribed to them. Further selection was made based on online freelancers’ number of hours billed via Upwork, with the bar set at a minimum of 100. Moreover, only online freelancers who had been active on Upwork over the last six months were included in the sample. By setting these requirements, only those freelancers who were active on Upwork regularly and had been so recently were included. From the remaining groups of online freelancers, cases were selected based on a type of probability sample, i.e. systematic sampling (Bryman 2008, 172-173). In total, 250 online freelancers per job category were included.
Administrative Support Customer Service Writing Sales & Marketing
124.092 89.879 85.396 64.961
Design & Creative Accounting &
Consulting
Web, Mobile & Software Development
Translation
52.357 40.078 36.589 26.959
IT & Networking Engineering &
Architecture
Data Science & Analytics
Legal
15.795 10.465 6.917 2.138
Table 3.2 – Upwork registered, Filipino online freelancers per job category in January 2016
Once having collected the data, GIS was used for geocoding, which is defined as “the process of assigning an XY coordinate pair to the description of a place by comparing the descriptive location-specific elements to those in the reference data” (Zandbergen 2009, 648). Shapefiles of the Philippines, derived from Global Administrative Areas, version 2.0, December 2011, served as reference data (GADM 2015). The geocoding process required that various important decisions were made. First, some cities in the Philippines are named after the province in which they are located. An example is Cebu City located in the province of Cebu. To distinguish between the two appeared problematic for Cebu City, like the province, is commonly referred to as Cebu. Therefore, when an online freelancer declared to live in ‘Cebu’, it was assumed that s/he was referring to Cebu City instead of to the province. This decision was substantiated by the fact that when living in a place that does not share the name of the respective province, many online freelancers still referred to that place without
33 using the additive ‘City’, even if this is part of the official name, e.g. Baguio (City). Yet, still the decision may have skewed the results somewhat towards online freelancers living in urban areas. This would, however, not be an unlikely finding because it closely aligns with the fact that online outsourcing requires internet access. In the Philippines, one is considerably more likely to find this in urban than in rural areas (Greene 2014).
The second decision made while geocoding relates to the problem that some place names were not recognised by the shapefile. It could, however, be that these place names were almost similar to place names that were in the shapefile. In such cases, it was assumed that online freelancers were living in the almost similarly named places that were in the shapefile. For instance, whenever freelancers had given ‘Marikina City’ as their place of residence, it was assumed that they live in the city of ‘Marikina’ for, contrary to this place name, ‘Marikina City’ was not in the shapefile. Third, in the Philippines there are distinct cities or municipalities sharing the same name. Whenever an online freelancer had given such a place as his or her place of residence, it was decided not to include the freelancer in the sample. Exceptions were made if the province was added to the city or municipality because this allowed for a distinction to be made. Fourth, a few online freelancers had not filled out their place of residence, thereby not allowing them to be included in the sample. Resulting from the third and fourth decision, instead of 500, only 459 cases were assigned an XY coordinate pair.
After completion of the geocoding process, the findings were compared to secondary data on the geographical distribution of mainstream service outsourcing in the Philippines to give meaning to the representations of the spatial distribution of online outsourcing across the Philippines. These data were derived from the Tholons (2014) report which enlists the top 100 outsourcing destinations worldwide for the year 2015.
Semi-Structured Interviews A. Online Outsourcing
Qualitative, semi-structured interviews served to explain the geographical distribution of the online outsourcing industry across the Philippines as resulted from GIS mapping. Moreover, they were conducted to answer sub-questions two and three. In total 30 Filipino online freelancers working via Upwork were interviewed with the interviews lasting from one to two hours. To get in touch with them, initially the Facebook groups for Filipino online freelancers (see Section ‘Facebook Observations’) served as a platform to establish contact with a handful of online freelancers. From there on, subsequent respondents were selected by using a
