Strategic Plan for the Promotion of Professional Services Exports in Jamaica

Strategic Plan for the Promotion of Professional Services Exports in Jamaica PowerPoint PPT Presentation

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What can professional service exports do for Jamaica?. Slow growth - provide a new growth pole faster than tourismChronic balance of payments, vulnerable to tourism shocks increase

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Strategic Plan for the Promotion of Professional Services Exports in Jamaica

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1. Strategic Plan for the Promotion of Professional Services Exports in Jamaica Sunil Sinha & Umair Ullah Emerging Market Economics March 2008

2. What can professional service exports do for Jamaica? Slow growth - provide a new growth pole faster than tourism Chronic balance of payments, vulnerable to tourism shocks – increase & diversify exports Lack of jobs, brain drain - more and better-paid jobs Mainly low value added services – higher value service economy Accelerate transition to knowledge-based economy

3. Why does it make sense for Jamaica? In all sectors – agric, tourism - competitive advantage comes from human talent - Professional services rely on human talent High cost economy - cost factor not crucial in professional services Jamaica has all the attributes of successful professional service exporters (India) - exporter of talent, large diaspora in key markets, educated workforce, professional labour cost advantage An entrepreneurial culture capable of innovation, service ethos among self-employed An attractive location for professionals, strong tourism base

4. This is where the world is going to Service exports worth $2.4 trillion, 30% of world trade, growing faster than goods, goods 4.5% p.a., services 10% p.a. Service exports moving from travel and transport to knowledge-based services

5. This is where the world is going to 21st century will be knowledge-based services Greater source of value will be intellectual property, quaternary services

6. And Jamaica has not stood still Despite neglect by policy-makers, knowledge-based service exports have been growing fast Not visible in balance of payments but strong contribution - ICT exports ($200-400m), music ($80-100m) Other sectors have developed capability to export – health and wellness, education, accounting & auditing, finance & insurance Unfulfilled potential – positive services balance only due to tourism, net importer of other services, brain drain of professionals continues

7. Strategy process

8. Strategy process Non-selected sectors also had opportunities Construction & engineering, logistics, property-related services, legal services, management & environmental consulting 6 selected had bigger upside or were more export-ready Consultation with stakeholders, diagnostic analysis, stakeholder feedback

9. Health & wellness – market opportunities Health and wellness tourism is worth US$40 billion, growing at 30% per year Number of yearly health and wellness tourists between 20 and 30 million Cost of healthcare in US/Europe is rising rapidly Low cost providers earning substantial sums, > US$1 billion, Thailand, Argentina

10. Health & wellness – Jamaica’s competitiveness Jamaica has surplus capacity in public and private sectors, has value-proposition, Tony Thwaites is flagship Medical tourism: joint replacement, ophthalmology, not cardiac Wellness: destination spas, natural spas, wellness treatments not cosmetic surgery Research & diagnostic: telemedicine, medical imaging Residential care: shortage of nurses

11. Health & wellness – sector strategy Change mindsets in public sector, involve JTB Catalogue and promote what we have – raise awareness (brand, selected journals) – develop packages – target independent medical travel agents in US, cruise ship agents Support private providers in developing export markets Reduce cost of medical supplies TVE (nurses), professional qualifications & standards, visas & work permits, investment facilitation

12. Education – market opportunities Worldwide market for education exports is ~US$30 billion, 21% growth Number of students in formal education abroad topped 2.5 million in 2004, 1.3 million students in EFL programmes abroad Major providers earning billions of dollars, UK £8.5 billion from students East Asia & Pacific high student mobility, Western Europe too, but mainly in region Drivers include language, quality & reputation, environment and cost

13. Education – Jamaica’s competitiveness Big offer, 58 tertiary institutions Basic cost competitiveness, no extra-regional reputation Key segments University degrees (including franchises) TVET ELT, virtually no foundation Medical education: UWI + FDI

14. Education – sector strategy Change mindsets, involve JTB Catalogue and promote what is on offer Raise awareness – fairs, selected advertising, fam trips Support providers in developing and marketing product/packages Attract FDI, facilitate franchising Enabling environment Form PPP, visas & work permits, facilitate investment

15. Entertainment – market opportunities Worldwide film production expenditure around US$7.3 billion, physical music recording worth US$31.4 billion, live music performances at US$14.4 billion Cultural tourism from US/UK, 15% annual growth More and more value in music coming from live events, merchandising, digital recordings as physical recordings decline Reggae in decline in some markets (UK), remains strong in others (France, Germany, Japan)

16. Entertainment – Jamaica’s competitiveness Jamaica exporting $80-100 million, mainly music New music cluster aware of ills of past (IPR, music is a business), recognition of new digital formats and power of merchandising, role of agents & has big hitters Not strong in film & visual arts Film & visual arts cluster establishing itself

17. Entertainment – sector strategy Support cluster in promoting awareness of depth of Jamaican talent to music industry abroad, fam trips for agents, promoters Partnership with JTB, Ministry of Culture in showcasing Jamaican talent in Jamaica and abroad Work with Ministry of Tourism to increase venues for local entertainers Strengthen JCAP Increase demand for and monitor quality of business education

18. ICT – market opportunities Offshore spending on application development to double - US$50 bn by 2010, US IT offshore market US$15 bn BPO & IT-enabled services outsourced to hit US$140 bn this year, KPO US$40 bn Low-end functions to more complex processes Rise of nearshore destinations

19. ICT – Jamaica’s competitiveness Jamaica combines strengths of nearshore with cost of offshore in BPO Call centres: 14,000 jobs, US$200-400m in exports, 75-80% of work in customer service & debt collection Software development: can provide consulting services, proprietary software, bespoke design but cost of labour rises quickly after entry level Good supply of ICT grads (200-300 yearly) for small country, relevance of training an issue Infrastructure good & improving Good support from JTI, JSDA in the works

20. ICT – sector strategy Capability exists, need to promote industry systematically & as a brand Continue & strengthen FDI promotion – shift from BPO to KPO Support set-up of JSDA Improve relevance of training – curricula, training of trainers Venture capital fund – support business start-ups, fund software development Business services, fairs & missions

21. Auditing & Accounting – market opportunities Outsourcing of finance and accounting functions to hit US$47.6 billion by 2008 Low-end (accounts payable/receivable) and high-end (budget forecasting, risk management) tasks outsourced Move from low-end offshore to mix of nearshore and offshore to balance savings & control

22. Auditing & Accounting – Jamaica’s competitiveness Large pool of talent over 9,000 accountants Beyond big 4, small group of large firms, mainly self-employed Cost savings – labour cost < half US, Canada Main opportunities are in KPO, some in sub-contract via diaspora

23. Auditing & Accounting – sector strategy Attract FDI from KPO service providers Integrate domestic proposition with ICT industry Help ICAJ promote Jamaican visibility, standards abroad Support partnerships between BPO & accounting industry Promote local capability to diaspora Venture capital fund

24. Finance & Insurance – market opportunities Offshore financial industry well-established & increasingly competitive Stricter regulatory standards (AML) have hit Caribbean industry Consolidation in Caribbean and other territories as industry globalises Growth is in outsourcing services rather than globalisation of industry

25. Finance & Insurance– Jamaica’s competitiveness Number 2 industry in region, but poorly placed to export products – high cost of capital Late comer in offshore Some regional competitiveness through product innovation Large talent pool partially lost by financial crisis in Jamaica could be basis of outsourced services

26. Finance & Insurance – sector strategy Attract FDI from KPO financial service providers – back-office functions, credit risk assessment, equity research, loan processing, insurance claims processing Encourage partnerships between BPO & financial service industries Venture capital fund Promote domestic suppliers Implement offshore plan

27. 5-year export targets – adding 2.5-3% to GDP

28. Action Plan Communicate to sell vision – policy makers, private stakeholders Establish champion of professional services, JCSI Establish industry working groups/support existing groups Raise finance, mobilise human resource Support implementation of sector strategies

29. Action Plan – public resources required Unit (JCSI) US$450,000 annually Implementation of strategies Approximately US$600,000 annually

30. The JCSI dilemma Problems in both public & private sectors Proliferation of agencies Problems of public-public partnerships Spend on organisation vs. promoting exports Human resource scarce

31. The JCSI dilemma We recommend housing in JTI as independent unit Governance exercised by private sector & political leadership Implementation through industry groups & existing agencies Unit has a pot of money and thought leadership

32. Thank you

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