The World is Flat!
“In 2005, Thomas L. Friedman in his New York Times bestseller declared that the world was flat. The Flat world was a metaphor for the astonishing changes and progress that had been generated through the use of Information and Communication Technologies (ICT)……Fast forward to 2017 and we will see that the rate, scope and depth of disruption as a consequence of the unrelenting march of ICT would suggest that Friedman underestimated the transformative power of technology.
.…We are now living in an era where knowledge, product, manufacturing, love, sex and virtually anything can be digitized.” (Golding, 2017 – The
Role of ICT in Jamaica’s Economic Growth Strategy)
Ladies and Gentlemen, Welcome to the ICT/BPO sector.
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The Jamaican Outsourcing
Sector &
The DBJ
Intervention
~Dianna DaCosta~
5 Year National Strategy for the Development of Jamaica’s Outsourcing
Industry
• According to the 5 Year National Strategy
– We need to craft a holistic approach to develop the outsourcing sector based on the following pillars:
Policy
Infrastructure
Training
Marketing
– Expected Outcome: Between 2015 and 2020, increase Jobs in sector from 14,000 to 32,000.
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Contribution to GDP – 2015 year
It is estimated that during the 2015 year, ICT/BPO had the second lowest contribution to
GDP, ahead of Mining & Quarrying. Considering ICT/BPO is still a sector in its early
growth stage, this contribution is commendable.
Pre-2000 there were only 3,000 jobs and six(6) companies in Jamaica, all of which were
located in Montego Bay(1) and the most recent reports from JAMPRO state there are 62
companies and approximately 22,000 jobs.
1.8% 2.3% 2.9%3.9%
6.3% 6.6% 7.0%8.2% 8.5%
9.6%10.8%
16.4%
Mining &
Quarrying
ICT/BPO Electricity &
Water Supply
Hotels &
Restaurants
Agriculture
Forestry &
Fishing
Construction Transport
Storage &
Communication
Manufacture Finance &
Insurance
Services
Real Estate
Renting &
Business
Activities
Producers of
Government
Services
Wholesale &
Retail Trade;
Repairs ,
Machinery &
Equipment
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Job Creation
12,000 12,625 13,250 14,000
18,000
22,000
2011 2012 2013 2014 2015 2016
The ICT/BPO Sector
has produced 10,000
additional jobs over the
last 5 years, with
continued year over year
growth. This was
facilitated by the
establishment of 45
ICT/BPO companies.
The ICT/BPO Sector
has had the most
significant growth in
Jobs, when compared to
the Industries reported
on by STATIN. None of
the Industries shown has
had consistent year over
year job growth over the
last 3 years.
5% 6%
29%
22%
-10%
0%
10%
20%
30%
40%
2013 2014 2015 2016
Manufacturing Construction
Real Estate Renting & Business Activities Private Households with Employed Persons
Financial Intermediation Hotels & Restaurants Services
Other Community Social and Personal Service Activities Public Administration & Defence; Compulsory Social Security
Wholesale & Retail Repair of Motor Vehicle & Equipment Agriculture Hunting Forestry & Fishing
ICT/BPO
26 32 36 41 45Total
ICT/BPOs
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Monthly Base Salary Comparison
ICT/BPO salaries were significantly higher than minimum wage.
Additional salary data for comparable jobs in different sectors is required
to improve robustness of analysis.
48,00057,600
91,200
142,500
200,000
24,80035,416
101,918
140,356
Entry Level Call
Centre Agent /
Customer Service
Rep.
Entry Level
Technical
Support Agent
Team Lead/
Supervisor
Business
Unit/Account
Manager
Operations
Manager/Director
Minimum Wage Security Guards Accounting Clerk Administrative
Assistant
Salaries
ICT/BPO Jobs
Transition from BPO to KPO
Business Process Outsourcing
• HR & Payroll
• Insurance Processing
• Health Customer care
• Receivables & Debt Collection
Information Technology Outsourcing
• Network Administration
• Tech Support
• Web Development
• IT Consultancy
• Data Entry Services
Knowledge Process Outsourcing
• Professional Services
• Software Development
• Legal Process Outsourcing
• Financial Analysis
• Business and Market Research
11/24/2017 7Sources: JAMPRO, 2015 and State of Business Operations, 2017
Growth of BPOs in certain areas has been slowing down -Finance and Accounting (-4%) and -Human Resource (-3%)
Growth in Knowledge-based aspects of outsourcing (KPOs) have been growing significantly
• Type of Services Offered by BPOs
in the Sample (2017):
• Consulting
• Contact Centre
• Data Support
• Financial & Accounting
• Health Care Outsourcing
• Legal Processing Outsourcing
• Software Development
• Tech Support
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Linkage Effect – currently
the BPOs are linked with:
Hospitality
Telecommunication
Marketing
Technology
Hardware
Media
Cloud Service Provider
DBJ’S CURRENT PORTFOLIO OF BPO PROJECTS
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DBJ’s ICT Infrastructure Loan Facility
Features:
Objectives:
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14projects island
wide
702,000 sq. ft.
17,000 potential jobs
5,200 actual jobs
So then, have we then fulfilled our objectives?
Development of at least 350,000sq.ft of ICT SpaceAddition of at least 10,000 new ICT jobs in Jamaica
US$5M or 70% of project cost
4.5% interest rate12 years18 month moratorium
DBJ’s contribution to ICT/BPOs
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24% of all ICT/BPO jobs were created by DBJ facilitated projects
DBJ’s AFI window for ICT Infrastructure Loans
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US$18M3 AFI funded loans over 3 years (2015-17)
What is preventing the AFIs from funding more loans?
• Terms of the loan• Lack of Information about
the sector
Descriptive Statistics
Descriptive Statistics
N Minimum Maximum Mean Std. Deviation
NCBProfit 6 -0.277 0.437 0.073 0.265
FCIBCProfit 6 -6.408 1.326 -1.296 2.674
DBJDirLoans_BPO 6 -0.714 1.556 0.205 0.755
BPOJobs 6 0.050 0.286 0.134 0.101
R 6 -0.153 0.030 -0.044 0.070
LBPO 6 0 1 0.500 0.548
Valid N (listwise) 6
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CorrelationsNCBProfit (X1) FCIBCProfit (X1a) DBJDirLoans_BPO(X2) BPOJobs(X3) R(X4) L_BPO
NCBProfit (X1) 1
FCIBCProfit (X1a) 0.05 1
DBJDirLoans_BPO(X2) 0.67 0.43 1
BPOJobs(X3) 0.60 -0.52 0.46 1
R(X4) -0.01 -0.09 0.17 0.45 1
L_BPO 0.54 -0.37 0.31 0.88 0.50 1
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Loans to the BPO sector from commercial banks is positively affected by:
-changes in NCB’s profits-DBJ’s direct loans to the BPO sector-changes in the number of jobs in the BPO sector -changes in Commercial credit rates (interest rate)
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R² = 0.9856
0
5000
10000
15000
20000
25000
30000
35000
40000
45000
50000
2010 2012 2014 2016 2018 2020 2022
BPOJobs
BPOJobs
Poly. (BPOJobs)
Forecast for BPO jobs to be created in the next 3 years
Concluding Thoughts
The sector’s contribution to our GDP and job creation is increasing and important
AFIs are still reluctant to provide the type of financing required for outsourcing projects
Information about the sector’s performance outside of its job creation impact is limited
The talent required to move the industry from BPO to KPO is limited/untapped
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Concluding Thoughts
With the DBJ’s intervention in 2011, other banks started lending to the sector years later.It is expected that the jobs provided by the BPO sector will exceed 32,000 if current conditions remain or improve in the next three years.
ICT/BPO – Main Contributions:
Increased employment of persons in the 18-37 age group
Increase in entry level salaries - Wage of Production line employees: J$350 – 1,040 per hour
Rural area upliftment - 40%-60% of staff are from rural areas
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THANK YOU11/24/2017 18