Abstract
This study contributes to research on catch-up strategies of firms in Africa by examining the strategic potential of hybrid business models which balance market profitability with social impact. We investigate the potential of hybrid models in the increasingly important global outsourcing sector for the case of ‘impact sourcing’ - hiring and training of disadvantaged youth for providing business services to global clients. Based on field studies in Kenya and South Africa, we find that while regular outsourcing firms struggle to compete with global peers, impact sourcing service providers have managed to access underutilized labor markets and co- develop a market niche in response to increasing client interest in socially responsible outsourcing. Findings have important implications for research on late-comer economies, hybrid models and the outsourcing sector.
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