Jamaicans in the Diaspora have been challenged to exploit the country’s potential for realising a significant share of the US billion dollar Business Process Outsourcing (BPO) industry.
This charge was given at the recent 2nd Annual Awards and Scholarship Gala of the Jamaican American Bar Association, by Senator the Hon. Arthur Williams, Minister with responsibility for Information and the Public Service, at the Sheraton Hotel, Newark, New Jersey.
BPO involves US companies utilising the services of a third party in order to perform its back office operations, including payroll administration, customer help desks/call centres, tele-marketing and accounting at a cheaper cost.
Speaking on the theme, “Thriving in Difficult Economic Times: …Business, Growth and Investment Opportunities in Jamaica,” the Minister disclosed that the Government intends to unveil a five-point plan, aimed at expanding Jamaica’s Information and Communications Technology (ICT)/BPO sector.
“This is with a view to doubling the number of jobs the sector currently provides, as well as enhancing the industry’s global competitiveness. The US$145 million local BPO industry accounts for six per cent of the Caribbean and Latin American market, which is valued US$2.5 billion.”
Minister Williams, who represented the Prime Minister at the function, observed that already, the local sector comprises approximately 26 firms and accounts for nearly 11,000 full time jobs, but must attract significant investments in order to remain competitive.
“Analysts conservatively estimate that Jamaica’s information and communications technology/Business Process Operations (ICT/BPO) sector must grow at a compounded rate of between 20 and 21 per cent per annum over the next four to five years, in order to remain competitive regionally,” he declared.
He explained that BPO has, increasingly, become the best practice for global corporations seeking reduced costs, by focusing on core activities, process and technological improvements, while benefitting from reduced transaction costs and easier markets.
The sector ranges from basic sales to more technical support in areas such as health care, finance and logistics management and the Minister, while reinforcing the promotional plug, noted that BPO is big business with global expenditure which totalled US$460 billion in 2007 and is projected to reach US$680 billion at the end of 2011.
Senator Williams referenced information from the firm, International Data Corporation (IDC), which suggests that the global market will grow at an annual rate of nine per cent, and reach approximately US$1 trillion within three years.
“Against this background, increased investments in the local ICT sector will be a top priority of the administration over the next 12 to 18 months. In this regard, the government’s main investment promotion agency, JAMPRO (Jamaica Promotions Corporation), will mobilise its resources to attract more ICT entrepreneurs and corporations to invest in Jamaica,” he said.
He also emphasised that the Government’s position was that the local ICT/BPO sector presented the greatest opportunity to create jobs in the shortest possible time: jobs which will, in turn, increase the multiplier effect in the economy.
He disclosed that the Government’s five-point plan to drive expansion of the sector, will “focus on: market/client segmentation and targeting; infrastructure build out; a policy and legislative framework to stimulate and protect the industry; a cost effective approach to addressing training needs for the industry; and financing to support ICT activity.”
With respect to the country’s ability to facilitate business as documented in the World Bank’s 2010 Ease of Doing Business Report, and the recent Global Competitiveness report for 2011 to 2012, the Minister pointed to the introduction of “comprehensive reform of the tax system aimed at reducing distortions, removing inefficiencies and stimulating growth”.
“The reform, which was set out in the Green Paper tabled in Parliament earlier this year, will simplify the tax system, widen the tax base and improve equity, mainly through the rationalisation of tax waivers, exemptions and incentives,” he pointed out.
He said that in addition, far-reaching economic reforms have been set in progress with “exceptional levels” of support from our multilateral partners, and designed to provide a foundation for lasting growth. The government’s growth and development strategy, he said, was geared to encouraging investments of all types and sizes.
“We want to see the big investments, for they can have a big impact with a multiplier effect stimulating other investments. There are investments to be undertaken in manufacturing, logistics, telecommunications, shipping, tourism, entertainment, sports, energy and agriculture,” he stated.
He also emphasised that of equal importance were small and medium size investments, which require less capital, but create more jobs and can penetrate the entire island.
“It is time for Jamaican’s in the Diaspora to engage your friends, relatives and associates in the formation of strategic alliances and partnerships in viable projects back home,” the Minister pleaded.