The Caribbean Shows More Assertiveness in Chasing GSS Opportunity

Something’s cooking in the Caribbean. Something big and difficult to ignore.

With years of economic turmoil on its back and, apparently, a couple more ahead, the global services sector (GSS) is still reconfiguring its delivery strategies. Big and mid-sized companies have for a while been leveraging the advantages of digitalization, the availability of remote work and the globalization of the labor pool, entering into the advanced stages of what industry observers have termed “location agnosticism”.

This agnosticism is the force behind companies’ willingness to experiment with their sourcing and delivery strategies, enlarging traditional GSS hubs –like India, the Philippines and Costa Rica, as well as opening opportunities for smaller, relatively unexplored locations.

Amongst the latter, the Caribbean can be counted as one of the most dynamic. Governments and investment promotion agencies in the region are ramping up their efforts to increase the size of their GSS labor pools, as well as upskilling their workforces to capitalize on the opportunities offered by more sophisticated business needs. 

Jamaica is perhaps the most notable example. In less than a decade, the island was able to enlarge its GSS labor pool from around 10,000 workers to 55,000, according to data by Jampro, the country’s IPA. 

Jamaica Promotions Corporation(JAMPRO) participated in the 27th North American Shared Services and Outsourcing Week in Orlando, Florida March 20-23rd 2023.

Members of the GDS) Team gained insights about the trends in value creation and outsourcing. pic.twitter.com/xguW3SHhgK

— JAMPRO Jamaica (@Jamprocorp) March 31, 2023

The expansion was enabled in part by a US$15 million program launched in tandem with the Inter-American Development Bank (IDB). The program –which aimed initially to reach the 44,000 mark– ends in 2024. In other words, there’s still time to push those numbers even further. According to Fernando Pavon, Senior Specialist in Skills Development at the IDB’s Labor Markets Division, industry players in Jamaica are highly optimistic about the final number, with the most confident seeing a labor pool of 70,000+ by 2024.

Jampro has also been pushing incubator programs in the island, as well as initiatives to attract talent and even commercial incursions into the target markets. Vivion Scully, Jampro’s Head of Global Digital Services Investment, commented during CrossConnect Forum that Jamaican companies are being taken to New York, Atlanta, Miami and even the UK “to secure services and partnerships with companies, in order to expose their capabilities and to create an export of services industry.”

Jamaica’s not the only Caribbean nation where the pot is brewing. In Grenada, authorities are leveraging alliances between universities and businesses to ease the flow of talent from classrooms into delivery offices. Neil Sturrock, Global Customer Support Director at Wave Mobile Money, mentioned at CrossConnect that universities in Grenada are taking tech graduates to the US to acquire practical experience which can seldom be found at home.

In Trinidad & Tobago, authorities are also pushing for tighter relationships between businesses and universities.

“We turn out a lot of computer engineers, but there’s a gap between them being able to hit the ground running coding and what they learned in school”, said Sekou Alleyne, President of InvesTT, Trinidad & Tobago’s IPA. “All the software developers that come to us, we create that connection with universities immediately, so that they can find a quick way to address that. Usually, we’re able to bridge that gap somewhat

InvesTT welcomes Scottish firm Ascensos to Trinidad and Tobago! According to CEO John Devlin: “T&T offers Ascensos an impressive proposition with the friendliness of its people, the infrastructure, quality of life and direct links to USA and Canada." pic.twitter.com/Rfn73m83NB

— InvesTT (@investtrinidad) March 16, 2023

All of these efforts and more have resulted in an appealing brew. The scent has made it all the way to North America and even across the Atlantic, attracting the attention of potential investors eager to exercise their newly found location agnosticism.

“I’m very big on diversity; getting the best talent from wherever you can”, said Sturrock. “This company I’ve been working with, they take the best talent from each island [in the Caribbean], and it doesn’t matter where you’re sitting, because it’s a virtual team”.

The Population Issue

One of the arguments most consistently thrown by industry observers against the Caribbean is the size of its population. 

Top Nearshore locations for GSS like Mexico and Colombia are known not only for the size of their economies, but for the magnitude of their populations also. Mexico’s population surpasses the 125 million mark, while Colombia’s is over 50 million. Even a smaller country like Costa Rica has over 5 million people, surpassing by far the numbers seen in Jamaica (around 2.4 million) and Trinidad & Tobago (1.3 million), which are among the five most populous countries in the region. The whole Caribbean population is estimated to amount to nearly 45 million.

The focus on population size makes sense, considering two of the most popular locations for GSS are the Philippines (113 million people) and India (1.4 billion people). Nevertheless, small countries like Costa Rica have been able to carve a reputation as high-quality hubs for GSS delivery, with a sophisticated workforce and top-of-the-line services.

“You shouldn’t just look at the numbers of population. There are good people everywhere in the world, and there’s good skill in certain areas”—Neil Sturrock, Global Customer Support Director at Wave Mobile Money

Caribbean nations are well positioned to achieve a similar reputation. Many of them have a population of native English speakers already. Add to that cultural and legal alignments and a shared history with the UK market specifically, and the case is half-baked. All it takes is a stronger push, which is already taking place. Trinidad & Tobago, for example, managed to convince investors that the size of its population wouldn’t translate into rapid saturation and higher prices, allowing the rest of its appeal to work its magic.

“We were able to prove that that wasn’t the case”, Alleyne said. “Once we were able to prove that piece, everything else fell into place: English speaking, quick flights, cultural affinity, strong telecom infrastructure. We ticked all those boxes”.

Some customers are already sold on the Caribbean’s potential. Sturrock swings hard for the region, sharing his experiences with small teams in Grenada. 

“That team, it’s only a small team [in Grenada] but it’s outperforming everything in the rest of this business”, he commented. “You shouldn’t just look at the numbers of population. There are good people everywhere in the world, and there’s good skill in certain areas”.

There’s another battle which the Caribbean will have to fight, though: brain drain. Several government representatives recognize that creating specialized talent for GSS is difficult enough. What’s even harder, though, is keeping them around. Caribbean IT graduates in particular seldom find job opportunities in their home turf, being forced to look elsewhere for work.

In Jamaica, they’re trying to use the island’s appeal to lure tech companies.

“We already invited a company in, who has moved about 50 of their team members to Jamaica from Eastern Europe”,  Scully said. “They’re going to train about 500 graduates out of university over the next three or four years”.

Poised for Expansion

Something’s cooking in the Caribbean, and investors in North America and Europe have caught a whiff of what’s in the pot.

With the interest of potential investors already piqued, the region finds itself in an enviable position that could allow it to leverage the willingness that the market’s been showing to experiment with location diversification. 

“We have companies that would not have considered offshore at all, until coronavirus happened. We were able to leverage those trends to further promote Trinidad & Tobago as a destination”, pointed out the President of InvestTT.

There’s still work to do, though. Alleyne recognizes that Trinidad & Tobago will have to rework its program of tax incentives for foreign investment, as well as ramp-up its upskilling efforts. Jamaica is in a similar boat when it comes to talent. The country already has a reputation as a hotspot for the delivery of BPO services, but hopes to sophisticate the skillset of its workforce. At the moment, the ratio of its GSS talent pool tilts towards BPO (80%), with KPO representing just a fraction (20%). The goal is to achieve a more balanced composition of 60% BPO and 40% KPO.

In the eyes of the buyside, the Caribbean does not represent a replacement for India, Costa Rica or the Philippines, but an opportunity to expand the frontier of their operations and learn about what’s actually out there.

“For me, the Caribbean and LATAM bring a very unique proposition”, said Sturrock. “Outsourcing is not going to go anywhere; it’s going to get bigger and bigger. From a client side, it’s more understanding what the markets can do. There’s a lot of education to be done on the region”.