The Jamaican government has again reiterated its support for the BPO/ IT sector with the announcement of the allocation of $8.6 million for the development of the sector, and, in particular, the creation of policy to boost the sector. The government claimed recently that the sector is “poised to reap significant benefits for the local economy, with the generation of some 15,000 additional jobs over the next five years.”
Nearshore Americas talked to the Hon. Julian J. Robinson, Minister of State at the Ministry of Science, Technology, Energy and Mining about the Jamaican government’s recent announcements about investment in the sector and about the future of BPO in Jamaica.
Nearshore Americas: There have been a number of reports recently about government’s investment in and commitment to BPO and IT outsourcing in Jamaica. For example, one recent report indicated that $8.6 Million had been earmarked for a project to boost the ICT/BPO industry. Can you provide an overview of the government projects that are aimed at growing and improving the BPO/ IT outsourcing sector?
Hon. Julian Robinson: The Government of Jamaica has intervened in a number of ways to facilitate the growth and development of the BPO sector.
- The Development Bank of Jamaica has provided funding to the tune of US$20Million for private sector players to build out space for BPO providers. This has enabled over 300,000 sq ft of additional space to be available for investors.
- The Government through JAMPRO, the trade and investment facilitation agency, does marketing for companies in the BPO industry and facilitates investment of new firms. JAMPRO will identify space for new investors, facilitate negotiations with the space providers, advise them on incentives that are available, provide marketing support by carry investors on trade shows and marketing missions, and facilitate the interactions with other government agencies.
- The HEART Trust NTA, which is the national training agency, has designed specific training programs for companies in the BPO industry and has actually developed a MOU with the Business Process Industry Association for training persons in the sector.
- The 8.6M will go to the establishment of a policy for the industry.
NSAM: This is not the first such government initiative aimed at growing the Jamaican BPO sector. How have previous initiatives impacted the growth of the sector in concrete terms? What have been the milestones?
Robinson: I don’t have specific numbers about [the impact of] prior initiatives. What I would say is that as a country we now have more experience in the sector to plan and project the growth trends and potential.
The most significant milestone I would say was the liberalisation of the telecoms industry in 2001. So for example a T1 line (high speed data transmission) used to cost approximately US$40,000/month to lease in 2001. Today those rates are US$1,500/month for the same service. Why is this important? BPO firms use a lot of high speed data connectivity and as such this has positively impacted operational costs.[Other important milestones included the] establishment of eServices Jamaica Ltd by local entrepreneur, Patrick Casserly. He started his company with 35 employees and 5,000 sq ft of space in 2001 and sold it to ACS in 2007, where he had grown to over 3,000 employees.
Another milestone would have been the acquisition by Xerox of ACS (Affiliated Computer Services) in 2009. That brought a well known global brand to Jamaica and in so doing demonstrated to the world that Jamaica could attract world class brands.
Explore the highs and lows of Jamaica’s BPO/ IT sector in our interactive timeline below. Click on any event for more details and a link to the original story.
NSAM: How is government responding to the WTO’s tax proposal for free zones, which is likely to negatively impact growth in the BPO sector?
Robinson: The Government has established a working group to determine what should replace the free zones. The working group has representation from the BPO sector and all efforts are being made to ensure that whatever tax regime replaces the free zones does not place the country at a competitive disadvantage vis-a-vis its other competitors.
NSAM: What areas do you think still need to be addressed? What are the core challenges facing the BPO sector in Jamaica?
Robinson: We have to continuously ensure that we provide the best training programs for the workers in the industry that are consistent with international best practices.
The main challenges over the years have been the lack of appropriate and available space for BPO operations. We were also challenged recently by the illegal lotto scamming operations but this has been significantly reduced by the police.
NSAM: How do you see the BPO/ IT outsourcing sector in Jamaica developing in the next five years?
Robinson: We expect continued growth in the sector – we anticipate another 6,500 jobs to be created in the next one and a half years. We expect new entrants to come into the market and for more investors to come into the Kingston area. We also expect higher value added activities being done here in Jamaica.