WESTERN BUREAU - Buoyed by the findings of two recent management consulting firms surveys - one of which forecasts that US$365-billion worth of transactions will shift offshore over the next five years - commerce, science and technology minister Phillip Paulwell on Monday declared that the ICT sector had tremendous potential for investment and the creation of jobs.

"Recent developments in the sector support our continued optimism that the sector hold tremendous promise for the attraction of investments and the generation of jobs,"

Paulwell told participants at the opening session of the 2004 Contact Centre and Strategic Sourcing Summit of the Americas at the Half Moon Hotel in Montego Bay.

Paulwell pointed to a number of recent studies undertaken by Deloitte & Touche and AT Kearney which he said underscored the growing practice among US companies to outsource their business processes to low-cost jurisdictions.

He said the main findings from the Deloitte & Touche study, conducted in June last year, showed that:

. competitive pressures were encouraging financial institutions to send work offshore;

. IT processes were going offshore first, but business process outsourcing (BPO) would soon follow; and that

. banks did not want all their processes in one location and were sending work to secondary locations.

The study, Paulwell added, also indicated that one-third of the globe's major financial institutions were already utilising offshore outsourcing, with 75 per cent reporting that they would be doing so within the next 24 months.

The AT Kearney study concluded that USA financial services firms were planning to relocate 50,000 jobs overseas over the next five years.

"Nine out of the respondents cited cost reduction as a reason for moving overseas, while other reasons cited included improved productivity, enhanced service and increased capacity and expanded skills," noted the minister.

A few years ago, the government, led by Paulwell as technology minister, pitched ICT as the new engine through which 40,000 jobs would be proviided over a three-year period. But so far, after a string of costly failures, the sector, according to government data, has produced about 13,500 jobs.

Paulwell noted that for US companies that were the major clients for outsourcing, the Caribbean was the closest near-shore location that offered comparable benefits to places like India.

He argued that Jamaica, with its large educated workforce, easy access to most US cities, well-developed telecommunication infrastructure and liberalised sector should benefit significantly from future investments in the region.

The summit is part of an annual series of global business conferences which attracts corporate attention and is organised by The Summit Circuit, headquartered in Toronto, Canada.

Julian Robinson, Jamaica Promotions Corporation's (JAMPRO's) manager of investment promotions, told the Business Observer that the conference offered an opportunity for executives in the ICT industry to meet and discuss issues pertaining to the sector.

"The big issue now is the movement offshore and many companies are now looking to set up business close to North America, primarily because of security concerns," Robinson said.

The conference, which has attracted more than 130 executives, ends today.

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