At foreign firm, only Cambodia's abject need apply
PHNOM PENH, CAMBODIA — Street 360 seems stuck on the wrong side of the digital divide: Motorcycle taxis, scruffy kids, and the occasional rooster weave their way past an evangelical church and noodle stands.
But in one building is a scene that could help bridge the gap between the high-tech haves and have-nots: 20 workers sit busy at their computers, typing up a 17th-century copy of Julius Caesar's Gallic Wars. They don't know a word of Latin, only that every character helps them earn $65 a month - in a country where most people get by on less than a dollar a day.
To development experts and globalization critics, Digital Divide Data (DDD) is simply one more Western company looking to fill low-skilled jobs with cheap labor. But to the often fiery globalization debate, the data-entry firm in Phnom Penh adds a moral wrinkle. Unlike similar companies in the developing world, it reserves jobs for only the most disadvantaged citizens, those who wouldn't otherwise have a chance to work. Cambodians disabled by polio or land mines, former prostitutes, and slum residents clock in here.
"DDD shows that capitalism and social purpose can be cojoined," says J.P. Singh, a technology and international development professor at Georgetown University in Washington. "Contrary to alarmist thinking, disadvantaged people and regions can position themselves to gain from both the information revolution and globalization."
That's not to say DDD hasn't met difficulties - or even controversy.
Canadian Jeremy Hockenstein and American Jaeson Rosenfeld, former colleagues at the international consulting firm McKinsey & Co., founded DDD in 2001. They funded their venture with a $25,000 grant, $25,000 out of their own pockets, and technical advice and software donated by an Indian firm. Their first project: a $50,000 contract to digitize back issues of the Harvard Crimson, Harvard University's student newspaper.
Early on, the DDD team faced challenges in bringing the information superhighway to a country still covered in dirt roads. For the first month,typists didn't save their documents, so every new day's typing wiped out the previous day's work, says Tim Keller, a former investment banker from San Francisco who joined DDD as a technical adviser. Workers were also too shy to ask questions - or too embarrassed to point out errors in one another's work. Accuracy rates were low. Progress was slow.
Then word got out that editors of the Harvard Crimson - who advocate a living wage - were paying Cambodians significantly less than the US minimum wage. A prominent columnist attacked the newspaper for hiring sweatshop labor.
"A lot of people in the foundation world get angry when they hear about this," says Michael Chertock, managing director of Global Catalyst, a Silicon Valley foundation that supports DDD. "DDD goes against traditional development thinking.... It goes to the [debate] about how globalization can help the poor."
The firm feared that bad press would cost them new contracts. But, instead, the publicity led to more business from customers who liked DDD's prices and its social mission, Mr. Hockenstein says.
"I believe in comparative advantage," says Sarah Reber, an economics graduate student at Harvard, who hired DDD to enter public school finance data from the 1960s. "Hardly anyone could afford to pay Americans to do this kind of work."
For years, Western organizations have sent simple but time-consuming data-entry projects to developing countries. New York City police tickets have been processed in Ghana, Lexis-Nexis articles have been entered in China, and insurance claims have been keyboarded in India. The total market for data processing and network services is more than $290 million, and growing 5 percent annually.
DDD is Cambodia's first foray into the global data-entry market. By their country's modest standards, DDD workers are well-off. The minimum wage in Cambodia - and the wage offered at Phnom Penh factories making clothing destined for the US - is $11.25 for a 48-hour work week. By contrast, DDD typists earn $16.25 a week, working only 36 hours.
"I feel very lucky to work here," says Rotha Mach, who used to sew jeans in a garment factory. "I work less time and get better money."
Employees, who are assigned to one of two six-hour shifts a day, are encouraged to use extra time for further education - in computer training programs, English classes, or even college - with DDD paying half the tuition.
Today, DDD is running in the black, Hockenstein says. (Neither he nor Mr. Rosenfeld draws a salary from DDD.) The company has nearly a dozen contracts worth about $100,000 a year to digitize new user lists for a Cambodian mobile telephone company, survey data for the UN, and vintage encyclopedias from American college libraries. The University of Utah commissioned the digital copy of Julius Caesar's Gallic Wars. New grants from the Asia Foundation, the British government, and the World Bank have enabled the company to buy more computers and train more workers.
DDD plans to take its business model beyond Phnom Penh to rural villages in Cambodia and other developing countries. But some managers worry whether the Cambodian staff has enough technical proficiency to run the company. Still others wonder whether focusing on growth - DDD hopes to support 100 workers in Phnom Penh - will chip away at the project's social mission.
"We're now facing the challenge of figuring out how to grow, how to employ more people, and how to keep what's special about DDD," says Mr. Chertock, who recently awarded the firm a new grant to hire a full-time US marketing agent. "This is a global business, and the only way it will be sustainable in the long term is through more revenue from the US."
But DDD is optimistic about balancing its business and social missions. "I think we've shown that you can be competitive and do it in a socially responsible way," Hockenstein says. "I hope the industry shifts in this way."