22 June 2007

1. National ICT Strategic Plan (2007-2011) ICT Industry Development Hemant Chittoo / Kemraz Mohee 22 June 2007

2. ICT Industry Development: Components / Building blocks • ICT Exports • Domestic ICT Industry • Manpower and Skills Development • Main Objectives • Analysis / Challenges • Main Recommendations NICTSP 2007-2011

3. Main Objectives for ICT Exports • Identify potential niche areas for the development of the ICT sector as the fifth pillar; • Recommend strategies to maximize the growth of the ICT industry for the export market; • Propose incentive schemes and facilities to create a more conducive environment for attracting international partnerships; • Propose strategies to empower the local ICT business community to gain access to the regional and global markets; • Identify projects to position Mauritius as the Regional ICT Centre of Excellence. NICTSP 2007-2011

4. Analysis & Challenges • Biggest player in the world outsourcing market is India - USD 12.2 billion In Africa, South Africa is the biggest player with ~ 0.1 billion USD of business. Other emerging new markets include Philippines, Thailand, Morocco, Senegal, Tunisia, Mexico, Israel, China, Ireland, Estonia, Hungary, Russia etc. Other emerging new markets are Philippines, Thailand, Morocco, Senegal, Tunisia, Mexico, Israel, China, Ireland, Estonia, Hungary, Russia etc. • Expected growth rate(2003 -2008) for off-shoring to low wage countries is as high as 30 percent. • France has salaries that are 10.5 times that of Mauritius. This is a huge difference in cost and it makes business logic for organisations in France to get their activities outsourced to Mauritius. • Bilingualism is by far the most important trait which Mauritius cannot ignore, being perhaps the only country with its population enjoying equal felicity in both English and French. NICTSP 2007-2011

5. Analysis & Challenges • Around 40% of companies operating in the ITES BPO sector originate from Mauritius, followed by France and India. These three countries together contribute to more than 80 percent of the total investment. • As at March 2007, the actual level of employment in the industry is 6,960 and growing at a double digit rate. • According to the BOI, it appears that more than half of the proposed investment have already been realised in the ICT sector • High rate of attrition in the ICT industry • Capitalize on the emerging “off-shoring” wave made possible by the large scale of investments in the technology and telecom industries in the last decade. There is, though, an increasing gap between ICT skills available in Mauritius and other Asian countries. There is a lot of ground to cover for Mauritius to be able to compete with other nations. • Telecom is the biggest cost component contributing to 35% of the total cost. Other components include location cost (23%), equipment (18%) and salaries (12%) NICTSP 2007-2011

6. SWOT Analysis Strengths Weaknesses • Strong Government Support Small Labour pool • Bilingual Skills Sub optimal service level • Supportive business Environment Lack project management skills • Cultural Compatibility • Competitive time zone Opportunities Threats • French BPO market North African competitors • Niche ICT jobs Susceptible to natural calamities • Financial services outsourcing NICTSP 2007-2011

7. Analysis & Challenges NICTSP 2007-2011

8. NICTSP 2007-2011

9. Recommendations – ICT Exports Estimates: Preliminary figures for the revenue projections for Mauritius from offshore activities . • (The estimates have been based on figures from McKinsey Global Institute report - The Emerging Global Labour Market: Part I—The Demand for Offshore Talent in Services • The projections are based on the figures from Forrester report - European Enterprise IT Spending) Year 2007 2008 2009 2010 2011 Optimistic Scenario 2.004 4.466 9.122 18.671 35.418 Realistic Scenario 1.730 3.100 6.115 12.011 22.582 Pessimistic Scenario 1.517 2.114 2.937 4.078 5.639 All figures (Rs. Billion) NICTSP 2007-2011

10. Recommendations – ICT Exports NICTSP 2007-2011

11. Domestic ICT Industry NICTSP 2007-2011

12. Objectives - Domestic ICT Industry • To identify strategies for encouraging local ICT companies to achieve international level of competence in the field such as CMM level certification amongst others, • To identify schemes and facilities to create a more conducive environment for the promotion of a local entrepreneurial culture, • To foster research and development initiatives in ICT and market the Mauritian expertise in ICT in the region. NICTSP 2007-2011

13. Analysis & Challenges • MITIA and ACT represent only a section of the ICT industry in Mauritius (over 185 operators in the BPO-ITeS segment and over 350 entities in the ICT sector overall including both the ITS and the ITeS sectors) • Local ICT might face uncertainty over their financial viability in the long run. The small Mauritian local market doesn’t allow for companies to reach “critical mass”. Companies are not big enough to be able to handle large scale projects. • There is a lack of industry-academia collaboration exercises aimed at transforming skill-sets in the universities and other academic institutions into employable resources. • Lack of co-ordination at national level on sustainable development of the domestic ICT industry and national capability in ICT research and development. NICTSP 2007-2011

14. Analysis & Challenges • Limited means for management guidance, technical assistance and consulting tailored to young growing companies. • Entrepreneurship development should be able to provide clients access to appropriate rental space and flexible leases, shared basic business services and equipment, technology support services and assistance in obtaining the financing necessary for company growth. • The current situation in Mauritius does not encourage innovation on account of the following reasons • lack of skilled workers in adequate numbers • lack of information on markets • inadequate levels of inter-firm and inter-university/college cooperation and business, labour and government collaboration • lack of a corporate or community culture that values and rewards innovation • Currently, awareness of usage of IT in their operations and that of outsourcing the IT operations to local Mauritian companies is limited. There is an urgent need to promote the advantages of outsourcing IT operations like cost-cutting and increased efficiency. NICTSP 2007-2011

15. Recommendations For Domestic ICT Industry • Collaboration and Clustering • Competency • Competition • Awareness NICTSP 2007-2011

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18. Manpower and Skills Development NICTSP 2007-2011

19. Objectives - Manpower and Skills Development • Building the ICT Workforce, implying initiatives aimed at preparing an adequate supply of skilled ICT workforce, and includes education, training and other associated measures • Inducting the ICT Workforce, or ensuring that the ICT workforce that is built is inducted into employment for the benefit of the individual, the organization and the economy at large, and • Retaining the ICT Workforce, or ensuring that those that are inducted are productively retained. NICTSP 2007-2011

20. Analysis & Challenges • High Dropout rate, implying that Mauritians who do get started on education do not take their educational careers to their logical conclusion, choosing to drop out in the interim instead • The resultant shortfall in manpower is bridged through importing manpower from other countries • There is a significant amount of Brain Drain among those of the population who do become highly-skilled • Educational inputs at the universities and other institutions do not produce a ready pool of employable resources; there is a significant gap to bridge between those who are educated and those who are employable. • Courses undertaken in the universities and the training institutes do not meet the requirement of the industry on account of lack of information on skills requirement and identification NICTSP 2007-2011

21. Projection for Manpower ( ICT - BPO ITES) 2007-2011 NICTSP 2007-2011

22. OPTIMISTIC REQUIREMENT REALISTIC REQUIREMENT PESSIMISTIC REQUIREMENT MANPOWER AVAILABILITY NICTSP 2007-2011

23. OPTIMISTIC REQUIREMENT REALISTIC REQUIREMENT PESSIMISTIC REQUIREMENT MANPOWER AVAILABILITY NICTSP 2007-2011

24. Building the workforce • A Teacher IT License programme (digital literacy) for new teachers which would be recognised by the MQA • Continuous IT competency development programme for teachers • Creation of educational websites (portals) to build and share knowledge base of best practices and experiences and staff development programmes to acquainting educational practitioners with content of these knowledge bases. • Focused Curriculum reform in ICT courses, through a partnership between academia (service provider), industry (service seeker) and government (facilitator and accrediting agency), where the curriculum has to be taken in a broader sense including aspects of content, delivery and outcomes expected. • Directions for introducing ICT into other courses, to (a) meet the demands for IT professionals through introduction of IT into senior levels of the school system, and (b) delivering an IT literate workforce for national development. • Expanding and filtering the intake of students into the ICT courses, to improve respectively the quantity and quality of the supply of ICT workforce. NICTSP 2007-2011

25. Inducting the workforce • Comprehensive course curriculum refinement exercise with participation from the industry, academia and the government. NICTSP 2007-2011

26. Inducting the workforce • Collaborative plans be drawn out along the following issues: Course Curriculum, professional development courses, collaboration on applied research. • Supporting ICT industry to increase its research activities through tax incentives, infrastructure support and partnership programs, establishing a energetic private sector R&D environment. • Facilitating the establishment of multinational companies to serve the African market from Mauritius, retaining their R&D activities in Mauritius. • Government should facilitate through appropriate mechanisms rolling out of certification programmes (for example, from Microsoft for MSCP certificates or from SAP for its certification programmes). • PPP ventures should be explored in the context of extended training. Along with the private sector events could be held which would publicize not just within Mauritian nations but also among the other countries Mauritius’ renewed focus on ICT. Buyers-Sellers’ meets, Foreign Investors’ conclaves, may constitute such events. Along with these, there could be special events involving the Mauritian Diaspora. NICTSP 2007-2011

27. Retaining The Workforce • Programme for Attracting highly-skilled non-Mauritian from abroad and triggering the reverse brain drain by attracting the Mauritians abroad; • Setting up and operationalising Career Counselling Networks and Workshops; • better self-regulation in the industry in terms of anti-poaching activities to be addressed by the ICT industry associations. NICTSP 2007-2011

28. THANK YOU (Ambition, Ability and Action) NICTSP 2007-2011