Outsourcing in Africa: How do the interactions between providers, multinationals, and the state lead to the evolution of the BPO industry?

We explore the evolution of Africa’s business process outsourcing (BPO) industry. In so doing, we seek to derive policy and managerial implications on how African suppliers can grow and become more attractive to foreign multinational corporations (MNCs). We discuss insights from the literature on (B...

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Bibliographic Details
Published in:Journal of International Business Policy 2023-12, Vol.6 (4), p.432-452
Main Authors: Larsen, Marcus M., Mkalama, Ben, Mol, Michael J.
Format: Article
Language:English
Subjects:
Business and Management
Business Strategy/Leadership
Case studies
Emerging Markets/Globalization
Entrepreneurship
Intermittent
International Business
Multinational corporations
Outsourcing
Working conditions
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Summary:We explore the evolution of Africa’s business process outsourcing (BPO) industry. In so doing, we seek to derive policy and managerial implications on how African suppliers can grow and become more attractive to foreign multinational corporations (MNCs). We discuss insights from the literature on (BPO) clusters and how these evolve. Our conceptual arguments are supported by a case study of the evolution of the Kenyan BPO cluster through three broad stages: embryonic, early, and developmental. We argue that this evolution has been hampered by factors including the small and sometimes informal nature of local suppliers, the reluctance of foreign multinationals to make long-term commitments, and the intermittent devotion by the Kenyan government to supporting BPO clusters. Accordingly, we suggest direct and indirect policy initiatives to grow the industry toward a more mature stage, increase knowledge spillovers and formalization levels, and improve working conditions.
ISSN:2522-0691
2522-0705
DOI:10.1057/s42214-023-00166-z