Introduction
With the decrease in revenue from traditional items like bananas and
a decrease in tourism growth, Caribbean nations are beginning to look at
different sectors for potential earning power. One of the areas that
that would seem to provide great promise to the region is the informaitcs
secotr, especially in the area of offshore/outsourced IT operations. These
operations would provide many jobs to the region including, including but
not limited to processing health insurance claims and airway bills and
tickets, transcribing medical and legal records, and a broad range of data
entry, data conversion, and clerical administrative services.
SVG is a potential area for these outsourced operations. There are
people in SVG who are literate, English speaking, trainable in computer
supported skills, and available for employment. The government ais
stable and based on common English heritage. It is in the same time
zone as a large part of the US and travel to SVG is relatively easy.
Labor costs including benefits are some of the lowest in the Caribeban,
and very low by comparison to North America. Telecommunications expenses
are significantly higher, however, than in the United States, but this
is something that is being resolved at the moment. It is in
this area that I believe SVG has a significant comparative advantage that
should be examined. Below is a discussion of the major strenghts
and wekanesses of SVG and the possible benfits that would comewith increased
offshore information processing.
Competitive advantages and relative weaknesses for SVG
Talent and skills base
There is a high level of basic literacy in SVG; many potential employees
can read and write English and possess the ability to acquire new skills.
The recent graduates of the secondary school system are receptive and capable
of rapid new skill development; but few have computer skills. Although
there seems to be a desire to improve computer and keyboard skills, this
is no small task. Furthermore, the number of schools with computer
laboratories is small, and consequently, the number of graduates from secondary
schools with significant experience is very low. In most cases, therefore,
operators of information services companies would be required to provide
training courses for new employees.
SVG also has skills shortages for higher value-added services like
software program conversion, for changes in large-system computer platforms,
and in software development. The University of the West Indies and
various tertiary level colleges provide training courses, but are only
able to supply a small fraction of the informatics skills required by the
market.
Labor
Labor costs in SVG are very low. Minimum wage is $8 per day.
The information processing industry would provide slightly higher wages,
approximately $1.10-2.10 per hour. This is extremely competitive
in comparison to North American and European wages for similar positions.
Transportation Infrastructure
The Caribbean enjoys geographic proximity to North America and, to
a lesser extent, Western Europe, compared to its Asian and Pacific competitors.
However, SVG does not have an international airport, which will be a barrier
for any airfreight oriented information service. Recent developments
indicate that they will be constructing an international airport in the
near future. AmeriJet, a cargo jet, makes 2 weekly stops in SVG.
This aspect needs to be considered in any decision to operate an offshore
operation in SVG. It may be to rely more heavily on transmitting
data via telecommunications.
Some recommendations for SVG
Developing Human Resources
There is definitely some degree of shortage of labor in relation to
the requirements of the industry, especially for higher value-added services.
The level of computer training and literacy needs to be improved.
The University of the West Indies (campuses in Barbados, Trinidad and Jamaica
and satellite courses in SVG) has started a degree program in software
engineering. The Caribbean Examinations Council offers proficiency
tests in typing and in technical proficiency with computer software for
word processing spreadsheets, and data base management. In addition to
skill building, there is also a need to increase knowledge among Caribbean
private sector individuals who want to participate in this industry.
Periodic workshops and other training activities could help increase exposure
to this business opportunity. The Chmaber of Industry and Commerce
is looking into the possibilty of possible hosting a computer-training
franchise operation.
Making telecommunications competitive
While the infrastructure necessary for informatics is more than adequate
by comparison to many other potential locations, the rates in SVG for international
telecommunications and high-speed/dedicated access clearly remain too high
to be attractive to a data communications intensive business. This issue
should be resolved in the very near future and will have a great impact
on the international competitiveness of SVG, as well as other OECS countries,
in the offshore industry.
Increasing efficiency and Transparency in the Business environment
Although this discussion is outside the scope of this report, it is
necessary for SVG to examine its regulatory environment for setting up
a business to make the process more efficient, less bureaucratic and more
transparent.
Benefits for SVG
The multiplier effects from gaining access to this outsourcing market
could translate into enormous growth opportunities for SVG and thus contribute
to the economic and social development of the country. A few of these
effects would be:
-
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an indigenous knowledge-based labor pool;
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the transfer of know-how and technology to other local industries
and sectors (such as manufacturing, banking, insurance);
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foreign exchange earnings; and
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opportunities for people to upgrade their skills and increase productivity.
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