NEW KINGSTON — JAMPRO data showed that, while the BPO industry has attracted capital investment of over US$691 million and generated 10,871 jobs between 2006 and 2010, there have been no significant investments in the past five years in Jamaica.
The Planning Institute of Jamaica (PIOJ) is recommending that Government focus incentive programmes to build out Business Process Outsourcing (BPO) operations, which the planning agency estimates could bring an additional US$28 million ($2.4 billion) into the state’s coffers, annually.
In its Growth Inducement Strategy report, the PIOJ said that research and consultation undertaken between 2009 and 2010 showed that incentives aimed at building out BPO space and training in the area were the two main constraints to further develop the industry.
Specifically, the planning agency is proposing that the Government offer “a tax credit amounting to a flat sum of US$1000 for each new employee hired to each BPO operator”.
“… based on the recommendation, within three years, the industry would have cumulatively created 4,000 new jobs, thus totaling 13,500 jobs for the economy and in 2015 some 10,200 new jobs and just under 20,000 jobs in total, all amounting to approximately US$28 million in net new GoJ revenue,” said the report.
The recommendation also involved extending the revised Urban Renewal (Tax Relief) Act to developers for the BPO industry.
Jamaica currently has approximately 26 firms, which have created some 9,500 jobs within the offshore industry, offer services ranging from finance and accounting functions, voice customer support to network operations support & debt collection.
Data from JAMPRO show that, while the industry has attracted capital investment of over US$691 million and generated 10,871 jobs between 2006 and 2010, there have been no significant investments in the past five years.
The International Data Corporation (IDC) projects that the global BPO market will grow by nine per cent per annum and earnings will climb to just under US$1 trillion by 2014. Offshore BPO is also expected to increase at a cumulative annual growth rate of 25 per cent reaching US$135 billion by 2014
The Caribbean and Latin American market accounts for US$2.5 billion of total revenue from the BPO industry, representing 5.8 per cent of the total market share. This opportunity is expected to grow by some 20 per cent per year and should therefore amount to US$5 billion by 2013.
Jamaica would therefore have to grow its ICT sector by 25 per cent a year to keep its market share.
Now, the Montego Bay Free Zone is fully saturated and Portmore has emerged as a new and popular BPO location in the general Kingston area, as evidenced by location and planned expansion of the eServices/ACS centre in Naggo Head, Portmore.