Nearshore Americas

The Two Greatest BPO Locations That Never Were

It should be a no-brainer: Two viable locations with a compelling mix of the much vaunted ‘cultural’ compatibility, proximity to the USA and solid English skills. Yet, Puerto Limon, Costa Rica and Bluefields, Nicaragua have languished in the backwaters of Nearshore BPO – while other, less qualified locations have flourished. What gives?

Taking a page from ESPN’s remarkable 30-for-30 film on the ‘Best that Never Was,’ a portrayal of the enormously talented Marcus Dupree whose football career was upended due to a variety of issues, we decided to shine a light on two locations that have every right to stand up and shine.

With populations of just 49,000 and 94,415 respectively, Bluefields and Puerto Limon are small when compared to the larger BPO sites in both countries. Nicaragua’s capital Managua has a population of 2.2 million, while San Jose, Costa Rica, has a population of approximately 288,000. But, on the other hand, locations like Belize City, Bridgetown, Barbados and even Port of Spain, Trinidad have all gotten a lot more attention and do in fact have populations under the 100,000 mark. In other words, don’t buy the argument that populations of less than 100,000 can’t support BPO – the Nearshore is filled with success cases in this range, albeit St. Lucia, Grenada and several second and third tier cities in Central America don’t get much of the limelight.

Size Matters

If I had a million dollars, I’d be in Limon right now. There is tremendous potential there. — David Scott Anderson

Magda Montiel De Franco, Market Intelligence and Communications Manager at ProNicaragua, said that Bluefields has not yet been sought as an outsourcing services location due to two main issues. “Primarily, this department capital has a very low population density which equals to a limited labor pool. It’s total population reaches 49,455 and its population density of 10 habitants per km2. Additionally, it still lacks the infrastructure for this type of investment, namely buildings with modern technological features,” she said.

“I would have never thought of either one of those as a BPO market, based on size alone,” Jeff Pappas, Principal at Cresa Dallas. “The first question potential clients ask is the size of the market. They want to be in a market that they can get to comfortably 1,000 seats. Even with turnover being lower in Latin America, they will still need 1,400 to 1,500 people.”

Pappas highlighted the importance of true bilingualism because Latin American countries do not track bilingualism the way the US does. “Who is really truly bilingual and bicultural? Speaking English is one thing, but being truly bilingual is another,” he said.

Some smaller markets are becoming more well-known in terms of BPO. Cresa Dallas has been looking at developments in Georgetown, Guyana, which is becoming more popular. “It is a small market but 90% of them are bilingual. People are even hesitant on Guyana because its only 325,000 people. So now when you look at a market like Bluefields and Limon, it doesn’t make the short list,” he said.

Esteban Herrera, Partner at ISG, agreed that it is fundamentally a scale problem. “Bluefields has less than 90,000 total population, and Limon is under 60,000. The percentages of these populations that can speak neutral-enough English and meet the educational requirements of most BPO scope is probably less than five percent of that already small number,” he said.

Herrera explained that added to that is the relative difficulty of getting there—neither is served by great roads or international airports. “Also when considering voice services, especially for the American ear, the English-school kids of San Jose and Managua will sound better than the beautiful and rhythmic English dialect of the Central American Caribbean,” he said.

Herrera estimates that at most each of these cities could house one to two delivery centers of any size. “Most companies looking to invest are looking at larger populations with more widely available qualified candidates,” he said.

Development is Happening

Despite some skepticism as a result, Limon province, at least, is seeing some development and investment taking place. Vanessa Gibson, Director of Corporate Development and Investment Climate of investment promotion agency CINDE, explained that the province of Limon includes communities such as: Pococi, Guacimo, Siquirres, Limon downtown, Turrialba, among others, which have an interesting potential for operations related specially to light manufacturing, distribution centers, logistics and agribusiness, but also for certain services operations given the second language management skills of its population. “Also, Limon’s proximity to the soon-to-be remodeled port will become an important development point,” she said.

Gibson added: “This potential is actually being analyzed by CINDE in order to profile other communities outside the Greater Metropolitan Area (GMA) that have the potential to become foreign investment destinations with the intention of generating quality jobs.”

She indicated that very important projects such as the new APM Terminals’ container terminal in Limon would be significant detonators for the development of the province, increasing exponentially its appeal to foreign investment. The APM terminals port development represents approximately US$1 billion in investment. According to Gibson, the ports of the Caribbean coast mobilize more than 80% of the ocean freight, which is why its remodeling will allow it to improve its efficiency of port infrastructure scores.

“Regarding the services centers, Costa Rica is strongly boosting the arrival of more investment projects in other regions outside the GMA,” Gibson said. “At the present time, more than 120 multinational companies from the services sector have established in the country, the great majority is located in the central valley, an area with long tradition of harboring this type of projects.”

While this points to some interest from government and CINDE, some feel it is not enough and that it is happening too slowly.

There Can Be Only One

I would have never thought of either one of those as a BPO market, based on size alone — Jeff Pappas

For some the problem of lack of development in these BPO potential hotspots stems from what Pappas refers to as the tendency of Latin American countries to focus on only one core city. “El Salvador has San Salvador, Costa Rica has San Jose, Nicaragua has Managua and Dominican Republic has Santo Domingo. Interestingly enough a country like Honduras, which is starting to become more and more of a player in BPO, has San Pedro Sula, but it also has now Tegucigulpa which is coming into play, and also has a market like La Ceiba, which has upwards of half a million people.”

Peter Ryan, Principal Analyst in Ovum’s global IT Services practice, feels that Bluefields and Limon both have potential. The focus on one core city, though, is problematic. “You have an industry in Nicaragua that is so focused on Managua, and, my impression is that, for all the best will in the world, the attempts by government to diversify delivery options into the rest of the country have been negligible at best,” he said. “In all the time I have been covering the country and the region, I have not once had anyone talk to me in an great detail about any of the opportunities they were scoping out in Bluefields or Limon.”

Ryan added: “This is unfortunate considering the first time I went to Nicaragua in 2011 was when President Ortega gave a speech and specifically highlighted Bluefields as a good opportunity for the BPO space. As far as I am concerned given the fact that Managua is a very good location, easy to get in and out of, with modern infrastructure and a developing infrastructure too, the focus seems to be much more on continuing development of the capital as a place to do front-office BPO.”

Ryan said that Nicaragua is badly missing the boat and run the risk of being left behind. He contrasts the situation in Bluefields with nearby Honduras, where not just San Pedro Sula, but also Tegucigulpa and La Ceiba are being developed as sites for BPO investment. In Honduras, there has been a logical steady progression from one city to the next. “For Nicaragua not to be exploiting locations such as Bluefields in the way that they could have in the past few years is disappointing and it is not terribly reassuring for site selectors or outsourcers that are looking to find locations of diversification,” he said.

Change is likely to come, though. “I don’t think the government has any choice but to try to change. Managua is tapped out. A Managua or bust policy doesn’t make a lot of sense,” Ryan said. The question of saturation, though, is an interesting one.

If a place becomes saturated to the point that you have to look outside of that area, then there is potential for new markets to emerge. Pappas cited the example of San Salvador that may be saturated in the entry-level English-type work, but is not saturated for IT, medical or niche call centers going in there. “Most of these markets won’t be saturated enough when it comes to the higher technical level contact centers going in there, whether it is KPO, or an LPO, or a tech support or high-end with degreed or certified individuals,” he said.

Pappas explained that those looking at smaller markets need to consider factors such as the level of bilingualism in relation to the size of the location. “But when you look at these smaller markets, whether you call them secondary or tertiary markets, you have to make sure that it has the size for the right amount of people,” he said. “They are probably growing on the English side. They want to find a market that can support their English growth. You have to find a market that has a large number of English speakers, but that is accessible from that major market.”

Overcoming Stereotypes

A Managua or bust policy doesn’t make a lot of sense — Peter Ryan

Size and lack of awareness are not the only obstacles facing these potential BPO sites. Rogelio Douglas, who headed up the APM Terminals project in Limon and who is Founder and CEO at Caribbean Sustainable Development Group, a think tank and development consulting organization focused on the development of the Caribbean region of Costa Rica, said that Limon suffers as a result of an unfavorable reputation derived from stereotyping. The region is home to a large number of Costa Ricans of African descent, who were brought from Jamaica between 1875 and 1930 to build the railroads.

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“If you talk to most Costa Ricans, they will say that Limon is full of poverty and a significant level of crime,” he said. “The message is that it is a terrible place to go.” For Costa Rica, Douglas said, much of the focus is on the central valley where San Jose is and on the northwest coast and most of the large investments are in that area. Yet, Limon is the only region with a Caribbean coast, hence the recent billion dollar investment in a deep water harbor there.

Douglas, who was born in Limon but grew up largely in the US, said that Limon has the highest level of native bilingualism. “We learn English first and then start learning Spanish at the public schools,” he said.

Douglas noted that compared to every other Central American country, Costa Rica is safe to travel to and safe to invest in and because of free zone laws there are additional financial incentives to set up BPOs in lesser developed areas like Limon.

Despite having been let down by political promises that have failed to materialize, Douglas is hopeful that things will change and do so rapidly. He is travelling to California soon to speak to potential investors and also hopes to attract Chinese interest.

Although his core focus at the moment is on the development of tourism to Limon, Douglas, who set up the first bilingual call center in Limon, is also trying to attract a few light manufacturing and BPO operations, in order for the youth to make a good living. “A lot of Limonense (people from Limon) immigrated to the States, or moved to other cities or countries where there are more opportunities,” he said.

The quality of talent in the Limon region is excellent. “There are 15 to 20 BPOs in the country, all in the central valley, even though 25% of workers in BPO are from Limon,” Douglas said.

David Scott Anderson, CEO of the Utopia Group, who worked with Rogelio Douglas to set up the first call center in Limon, agreed. “Many of the people who worked for me at that call center were from Limon,” he said. “For several years now, politicians running for presidency have repeatedly promised investment and development in the area. Other than the new port project which took several years to come to fruition, they haven’t been interested in developing Limon.”

Anderson said that although much of the talent has moved away from Limon because of the current lack of opportunities, he is certain that they would return if the BPO sector started to flourish in the area.

“If I had a million dollars, I’d be in Limon right now. There is tremendous potential, with the new super-port and the growth of tourism in the area. But Limon is not on their radar, yet,” he said.

Bianca Wright

Nearshore Americas Contributing Editor Bianca Wright has been published in a variety of magazines and online publications in the UK, the US and South Africa, including Global Telecoms Business,, SA Computer Magazine, M-Business,, Business Start-ups, Cosmopolitan and ComputorEdge. She holds a MPhil degree in Journalism from the University of Stellenbosch and a DPhil in Media Studies from Nelson Mandela Metropolitan University.

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