The Information Communication and Technology (ICT) sector is another of the priority industries within Jamaica's National Export Strategy (NES) through which the country can benefit from increased inflows of foreign exchange and potential investors and participants can acquire additional earnings.

In a continuation of the Sunday Finance series looking on the priority industries under the NES and the opportunities that exist therein, the focus shifts this week to the ICT sector, which has generated net foreign exchange earnings of approximately US$199.2 million for Jamaica between 2001 and 2005. Exports from the call centre industry alone is estimated to be between US$300-400 million from the 22 contact centres operating in Jamaica. However, only four of those firms are local companies which means that profits are often expatriated from Jamaica.

There was an estimated US$76.5 million worth of outflows from the sector between 2001-2005, while net imports of telecommunications equipment, office machines and data processing equipment has increased from $7 billion in 2000 to $15.4 billion in 2004. While this indicates increased use of ICT locally, experts say more local firms need to get involved in the sector so that more of the earnings can be retained locally. The industry currently employs over 14,000 persons in telecommunications and call centre activities and there is the potential to employ even more if there are further investments locally and otherwise.

According to the NES, given that Jamaica is a regional leader in ICT services, there is the possibility of building on this reputation in order to not only tap into the US market, but to also generate significant income.

"The industry is a priority based on the significant levels of FDI, jobs created and potential employment generation, current and potential technology transfer, contribution to GDP, linkages with other industries, range of potential markets and scope for enhancing export performance," the ICT strategy document states.

As a result, there are a few key objectives that if pursued, can bring a confluence of benefits to investors and at the same time generate much needed jobs. Among the benefits are: Doubling annual contact centre/Business Processing Outsourcing (BPO) by $150 million by 2012; establishing a venture capital fund to support the ICT industry which is projected to provide an estimated US$11 million per year for the sector, attract 15 foreign contact centre/BPO service providers to the country and facilitating the set up of at least five local BPO service providers.

Wayne Marsh, managing director of e-business Solutions Limited, a local online business relations firm, told Sunday Finance that the focus on ICT as an export industry is a good move. He said though it might be difficult for the relatively small sector in Jamaica to compete with global ICT giants such as India, China and the Philippines, there are many opportunities available within the local market. He noted that Jamaica has a cultural advantage that would make it a more competitive location for ICT outsourcing from countries within North America.

"The import substitution for agriculture would be good, but in terms of the economies of scale, we would be at a disadvantage," Marsh said. Areas such as copy writing, web analytics and social media optimisation should be key focus areas for Jamaica in the short term, he recommended.

"The website needs content, but for someone in India to write an English document, it's not that easy," Marsh said. He said that based on his experience the Indians' use of English has not been up to the standard set for international businesses because English is not their official language. The web analytics, he said, includes analysing website traffic data and market research information generated from the sites, noting that the requisite training and language competence would put Jamaica at an advantage. Social media optimisation involves creating and managing social media pages such as facebook accounts for corporations that are increasingly recognising that the medium is a viable business channel.

Additional opportunities lie in setting up offshore virtual hot sites, redundancies and back-up systems for corporations overseas.

Joint Bidding

Given that local firms do not operate on the scale that would attract large contracts -- that is the capital requirements, the pool of professionals and the cumulative experience within the industry -- the NES advocates joint bidding, in order to land contracts from international enterprises.

More trained programmers needed

The ICT industry not only has the potential for job creation through the contact centres and other offshoring opportunities, but also creates higher value added and therefore higher income opportunities for the appropriately trained persons. Software development and programming, as well as consultancy services are important to the higher value added aspect of the ICT industry. However, there is currently a shortage of graduates in this area. Persons who consider careers in these areas, as well as institutions that offer training, will be able to take up opportunities within the sector as it evolves.

A comparison of the salaries in the leading ICT services countries, ouside of the US and Canada, indicate that Jamaica can compete on cost with market leaders India, China and the Philippines. The annual salary in US$ for a programmer with two to three years experience is US$6,000-$9,000 ($534,000-$801,000) in India, US$5,500 - $9,600 ($489,500-$854,400) in China and US$6,500-$10,900 ($578,500-$970,100) in the Philippines, while in Jamaica the annual salary is estimated to be US$18,500 ($1.6 million). However, Jamaica would have cost savings in travel, time, telecommunications, language and cultural dissimilarity.

The salaries for call centre agents are even less variable among the countries, with agents in India and the Philippines being paid between US$5,500-7000 and US$7,600-9200 respectively. A call agent in Jamaica would get an annual salary of US$6,500 to 7,500. Therefore considering the other costs associated with the operations in the other countries, Jamaica would enjoy significant cost advantages.

The proximity to the US market for both English and Spanish projects, the fact that Jamaica is on a similar time zone and the potential synergies that could come as a result of the EPA partnerships, are additional areas of strength for Jamaica in ICT.

The Government of Jamaica has signalled its support for the ICT sector through policies that guide its development, including the Electronic Transactions Act, a revision of the Telecommunications Policy of 2007 which should provide an updated policy framework for the sector; and other legislations in waiting: The Data protection Bill and the Cyber Crime Bill. So given that the legislative framework is in place to protect those involved in the sector, investment can be undertaken with a fair amount of confidence.

Local firms are therefore encouraged to see ICT as a viable business opportunity. If BPOs are developed locally, the revenue generation would amount to almost US$110 million contribution to GDP. And once the venture capital fund is established, businesses involved in start-ups, including ICT call centres, those involved in the development of software and those involved in export marketing are to access 30 per cent, 50 per cent and 20 per cent of the US$11 million venture capital funding respectively.

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