Exporting Support Services to World Markets


All our development interventions have areas of greater or minor strength. Hence, to accelerate our economic growth, it is necessary to identify the most viable economic sector(s). According to some economists, the “service sector” is a viable economic sector for Namibia. And their conclusions are based on our encouraging politico-economic stability, adequate infrastructure and pragmatic fiscal/monetary policies. Anyhow, the future of Namibia depends on our ability to trade alongside the United States, European Union, Japan, India and other promising nations. As Business Process Outsourcing (BPO) expand, we will have more openings to supply a wide range of back office services to international companies, multilateral organizations, government agencies, and NGOs. Business Process Outsourcing What have a telemarketer in South Africa, an E-commerce agent in India, a software developer in Ireland in common? It is Business Process Outsourcing. And, it is an extension of contracting-out or outsourcing a support service to a supplier or customer. They all use information technology (IT) to design and export their services. They deliver the non-core services for clients on the other side of the world. Routine (Need basic skills) Hotel reservations. Call centers. Data Processing. (2) Discretionary (Need analytical skills) Airline reservations. Secretarial services. After sales support. Specialized (High-tech skills) Technical online support. Medical records administration. Fund management. A Success Story India is a developing nation, which has risen as a global center for information technology and established a vibrant world-class service sector. It is forecasted that the revenue for IT enabled services such as business processing outsourcing can expand at an annual rate of 34% until 2008. Also, it will generate around US$77 billion, which is 30% of India’s foreign exchange earnings. During the 1990s, the manufacturing industry actually decreased as a proportion to India’s economy. As of today, the service sector accounts for more than 50% of the gross domestic product (GDP). Let us look at Tamil Nadu, once a poverty-stricken south Indian state which is currently offering the BPO services to the World Bank, and transnationals such as Ford Business Solutions and City Bank. The World Bank chose Chennai (Tamil Nadu’s capital) to set up its only back office outside Washington. Tamil Nadu is linked to Singapore and the world through a cable network with the world’s highest bandwidth – 8 400 giga bytes per second (GBPS). Annually, this state earns nearly US$1.5 billion from the IT products and BPO industries through 1,000 companies. Moreover, these companies provide employment for 65,000 IT professionals. Recipe for success How did Tamil Nadu secure its global competitiveness? India challenges western knowledge-based products and the BPO industry by investing in people and promoting innovations, not just cheap labour. In addition, the same thing is happening in China, too. Both nations are not simply grabbing over western IT jobs, they are transforming the process of IT and service development. In those endeavours, the university education systems’ research and development (R&D) played a critical role. For instance, the Anna University produces nearly 79,000 engineering graduates and 45,000 technologists every year. The government of Tamil Nadu encourages investors by providing lands in industrial parks, high quality infrastructure, and the Single Window Facility (SWF) for all government level approvals and assistance. This state offers world class health care facilities. Moreover, the determining factor for attracting national and foreign direct investments (FDI) to prosper the IT and service industries is the availability of uninterrupted power supply. The power capacity of Tamil Nadu is 8 249 MW. Promoting BPO Global leaders of the Business Process Outsourcing industry had established strong public and private-sector support before they embarked on that industry. For example, Ireland has achieved its competitive edge by promoting inter-agency coordination. Its International Financial Service Center (IFSC) supports the Call-centers and Information Processing Bureaus, Mainly with American financial companies. Besides that, IFCS coordinates the marketing efforts between the government and industry. Those government-led initiatives have helped to reduce the unemployment rate in Ireland from 17% in 1985 to the current 8%. Ireland is a small country with a 4.2 million population. It is the fourth richest country in the world (GDP US$222 billion) and a global leader in the knowledge industry. National Support We have few well-established IT companies in Windhoek and they have the capacity to lay a foundation for a successful BPO industry. Our state-of-the- art telecommunication infrastructure, efficient banking sector and the socio-political harmony are core assets to sustain this industry. Namibia is not suitably informed about the BPO industry or its socio-economic benefits. Hence, it is useful to launch an energetic national awareness campaign to build support through presentations to the business groups, offering BPO development plans, and incentives. Highly developed and developing countries have Five-Year Development Plans that identify priority areas for budgetary allocations. For instance, China’s five-year plan (2006-2010) is designed to lift the country as a “nation of innovative creators with high-tech competitiveness” and it attracts more government resources. To my mind, our third National Development Plan (NDP-3) and the Vision 2030 project will be heavily benefited by the BPO industry. Currently, Namibia is the fourth-richest country in the SADC region, and this country has enormous possibilities to emerge as the Business Process Outsourcing center for Africa. This is not a dream. As Katsuaki Watanabe, the President of the Toyota Automobile Corporation, recently said: “As long as one continues to strive towards realizing one’s dream, even the seemingly unattainable can eventually be attained.” His wise words are more relevant to Namibia’s development dreams. Prof. Monish Gunawardana International University of Management