Nearshoring is now an undeniable trend of the current geopolitical and business landscapes, with policymakers and industry leaders paying more attention to it. Amid an intensifying great-power competition between the US and China, American decision makers are promoting what they call “friend-shoring” of physical and digital supply chains to several trusted countries, many of which are in Latin America and the Caribbean.
Nearshoring and its potential implications are trickling down to the general public. Worldwide Google searches for the term “nearshoring” increased by more than 200% during the last year, according to Google Trends. Many companies that never considered outsourcing or relocating its processes to Latin American and Caribbean locations are now increasingly looking into it.
For years, countries like Costa Rica and Jamaica have offered a robust platform for the business and knowledge process outsourcing (BPO/KPO) industry. In the particular case of Jamaica, Kingston and Montego Bay remain the most favored locations.
Veteran industry players will cite issues such as the availability of talent and physical infrastructure as reasons behind their preference for Montego Bay and Kingston.
However, as more companies look into nearshore outsourcing, can Jamaica still offer other viable options? What is the next “wave” of locations in the island?
What to Look For
For companies advancing initial market research for potential locations, the fundamentals of what to look for have not changed. In that sense, Jamaica’s new destinations have an advantage as the country has become one of the torchbearers for the nearshore services industry in the last few years.
Issues such as the number of current professionals engaged in the industry, graduation rates and current unemployment rates to indicate talent availability are important when evaluating a city. The BPO/KPO industry in Jamaica currently employs over 60,000 workers, becoming one of the top job creators in the island.
Commercial real estate statistics, such as costs, vacancy rates and absorption levels provide a good sense of potential operational costs. The COVID-19 pandemic created very favorable conditions for tenants. These conditions remain in most real estate markets, and Jamaica is no exception.
Labor regulations, business climate and social risk ratings as well as availability of nearby educational institutions providing workforce training and upskilling resources are also key factors.
The Next Wave
Recently, well-established companies in Jamaica have embarked on ventures beyond the familiar landscapes of Montego Bay, Ocho Rios, Kingston and Spanish Town. One area capturing the attention of discerning investors is Portmore, a thriving city situated just 15 miles from Kingston and boasting an estimated population of approximately 155,000 residents.
Portmore is steadily evolving into an operational nucleus, now housing notable companies like IBEX Global and Sutherland. Portmore holds special significance for IBEX Global, as it was chosen as the location for the company’s inaugural call center in Jamaica. Additionally, IBEX Global maintains operations in Ocho Rios and Kingston.
Portmore is the proud home of the newly established Naggo Head Technology Park. This expansive 34-acre development offers a staggering 750,000 square feet of office space. In addition to IBEX Global, Portmore plays host to other forward-thinking companies like Jamsol Technologies, AtPoint and United Call Solutions.
CX company Collective Solutions set up operations in Sandy Bay, in the Hanover Parish, located on the northwestern tip of the island and with an estimated population of around 67,000 people. Collective Solutions also has operations in Honduras, the Philippines and the US.
Mandeville, with its population of approximately 50,000 residents, has also emerged as a noteworthy destination for businesses, including industry leader Sutherland.
One of Mandeville’s standout features is its role as the home of the Northern Caribbean University, formerly known as West Indies College. The university boasts a comprehensive range of academic programs, including certificates, diplomas, undergraduate and graduate studies spanning diverse fields of study. This educational institution serves as a valuable resource, ensuring access to a pool of highly qualified human capital for enterprises in the region.
Jamaica’s government is also developing the Caymanas Special Economic Zone in the St. Catherine Parish. Among other things, this project plans to have an information and telecommunications technology (ICT) zone, which will include software development, telecommunications, logistics, biotechnology, as well as BPOs companies.
Established Players Still Add Value
Even when Montego Bay and Kingston have a large presence of established players, it does not mean that these cities no longer have something to offer.
Despite Montego Bay’s continuous BPO growth, it remains a hospitality-focused city, which leaves significant space for further development. With a population of around 110,000 people, the city maintains a robust pool of potential human capital.
In the case of Kingston, the city retains a dominant status in terms of the economic performance of the country, sustaining the largest talent pool and business ecosystem.
The city keeps exploring potential smart city solutions in areas including a smart grid and intelligent transportation. Leading companies such as KPMG and itel continue to expand there, precisely due to the unique opportunities it offers.