Barbados Services Sector Development Strategy Key Findings and Strategy Workshop MARK HELLYER JULY 2013

Project Recipient

Barbados Coalition of Services Industries

Project Funded by

Commonwealth Secretariat PX/BRB/0735

IMPLEMENTED BY

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!www.ctaeconomic.com+

KEY FINDINGS

Services in Barbados

Finance & business

42%

Hotels/restaurant

19%

Wholsesale/retail 12%

Transport 11%

Construction 7%

Personal 5%

Utilities 4%

• 65% GDP •  (BS$ 5.5 bn)

• Employs 75% workforce •  (95,000)

• 58% services exported

• 76% of total exports •  (B$ 3.2 bn)

Services Exports (B$ 3.16 bn)

Tourism 44%

non-tourism travel 22%

Finance 4%

ICT 3%

Foreign Students 2%

Transport/communications

3% BPO 6%

IBC 16%

Professions 0%

Other 22%

Relative Growth of Exports

2008 2009 2010 2011 2012

World (5.2%)

Developing (9.2%)

Developed (3.5%)

Barbados (-1.4%)

Antigua

Barbados

Dominica

Grenada

Haiti

Jamaica

Dom. Rep.

St Kitts

St Lucia

St Vincent

Trinidad

-2.0%

-1.0%

0.0%

1.0%

2.0%

3.0%

4.0%

Barbados – Time to Support services

0

500

1000

1500

2000

2500

3000

3500

4000

4500

2008 2009 2010 2011 2012

US$

Actual Cf Mauritius Growth

• Exports of B$ 8bn •  (cf B$ 3.2 bn)

• + B$5.8 bn • +50%GDP

Key Observations

• Limited understanding, knowledge and appreciation of the services

• Small scale of both sectors and firms • Limited understanding of services as a business

• Lack of cooperation • Implementation deficit

Medium Term 5 year Targets Global  value  of  

sector  Value  proposi2on  (medium  term)  

Employment  genera2on  

BPO   US$  135  billion   US$  55  million   2,000  direct  jobs  

IBC   na   US$  63  million   750  direct  jobs  

ICT   US$  1,200  bllion   US$  48  million   800  direct  jobs  

TerCary  EducaCon   US$  40  billion   US$  150  million   Few  educators  with  many  indirect  jobs    

ConstrucCon  related  professional  services   US$  1,700  billion   US$  5  million   100s  

CreaCve  Industries   US$  800  billion   US$  5  million   100s  

Health  and  wellness   US$  100  billion   US$  25  million   High  100s  

Business  Support  Services   na   US$  49  million   High  100s  

US$ 450 m (B$ 900 m) >5,000

OUTLINE STRATEGY

SUGGESTED STRUCTURE OF THE STRATEGY

1.  Objectives (determines overall approach) 2.  Services Sector Development 3.  Value Chain Service Provision 4.  Sector Brand Development 5.  Implementation Framework 6.  Workplan

1. What are the key objectives?

1.  To make Barbados a high quality services

2.  To improve the number and quality of jobs in the services sector

3.  To encourage “consumption” and “appreciation” of services nationally

4.  To create the environment to encourage innovation and exploration of export opportunities throughout the economy

5.  To ensure the development of higher value services provision

•  Others •  Rank Importance

2. How to develop services?

• Change in national mind-set and recognition of services?

• Conducive Services Enabling Environment?

• Need to improve quality of service provision throughout the economy as a “norm”

• Encourage Service Opportunities

•  Research •  Analysis •  Understanding

•  SURVEYS

Services on the National Agenda? • Cooperation – key to services development (strong associations) – promote and strengthen

• Awareness raising of the importance • Case studies (promotion – press strategy – training)

• Reflect in budgets of public sector support organisations

• Mainstreaming throughout services government polices

• Other?

Laws, Regulation and Practices

Regulatory reform

• Modern – efficient - effective

• Systems – consultation, reform - How? •  Public sector dialogue (2-

way)

Any Existing?

•  Unequal treatment in export of goods and services in law and regulation

•  Unequal treatment of services exports by national authorities

•  Competition policies can also affect services exporters, in particular access to international telecommunications where availability, reliability and cost

•  Other include foreign direct investment policies and incentive regimes, equity participation and repatriation of funds)

Quality Services Provision • Government as a services provider •  ICT infrastructure investment maintained • Education

•  Customer service in education •  Continuous education/training (tax breaks, grants)

• Standards – setting and acceptability by population (value of standards domestically – expectations internationally - convergence) •  Standards •  Codes of practise •  TQM

• Other?

Encourage Service Opportunities • Export Promotion (effective, capacity skills)

•  Eg procurement alerts and tender know how •  BSOs (public adequate or other or more resources) •  Facilitators/mentors

• Framework for export clustering “business” • Incubators for services entrepreneurs • Entrepreneurship, e-business in national curricula •  how to sell online

• Services business financing •  Encouraging lending to services (without collateral) eg awareness, risk

management training, Gov. Guarantees (%)

3. Value Chain Services Provision

• Increase services % VA in manufacturing, agriculture and services value chains

• Private Sector BSO consumption promoted by Government

• Outsourcing and contracting services domestically

Services Upgrading

Services (% VA) in business

US

UK Italy

Spain

Mexico

0

5

10

15

20

25

30

35

% VA

Potential Services

•  Energy consultants could save 30-35% energy costs

•  TQM saves 5-30% •  TA to farmers could increase

productivity by 18. •  Sales and marketing training can

increase sales by 80% •  •Technology engineering could

increase productivity by over 100%

•  ICT services to manufacturers return on investment of 5-20%

•  Procurement and sourcing consultancies typically save 15-25%

Outsourcing and contracting out • Encourage efficiency gains to larger firms of outsourcing

services (large in-house departments) •  Sector specific (hotel cleaning)

• Government outsourcing/contracting of core services •  Cost savings •  Improved service delivery (quality) against contracted measurables

•  Trade unions •  Ability of officials for preparing and managing such contracts

Stimulate the PS BSO/outsourcing market

Challenges

• Understanding the value of services and willingness to pay (free service culture)

• Quality of services needed

• Availability/range of services available (market size)

How

•  Initiatives (cert, approved for up to 5 areas, marketing, TQM, e-commerce, energy…) 50%

•  Training/quality of providers

4. Sector Brand Development

1.  Knowledge Process Outsourcing (higher value segment of BPO) – B$ 110 million

2.  ICT (focusing on higher end software engineering and development) – B$ 48 million

3.  Tertiary Education (higher education, TVET and ELT) – B$ 150 million

BPO - KPO • Cooperation and Coordination

•  No BPO association – need one urgently

• Capacity and Quality Development (Transaction value business ie management) •  Education and Training Management •  Education and Training in transactions itself eg medical transcription

(continuous) •  Expectations management (time to build) •  Legal framework (confidentiality, data protection)

• Building the Brand •  Marketing company identifying and selling Barbados as a KPO

destination (developing leads for firms) •  International awareness and promotion

ICT • Cooperation and Coordination

•  Who is there? ICT Directory •  Improved networking amongst stakeholders •  Task Force - Research-Education-Private Sector-Gov.

• Capacity and Quality Development •  Business, design, marketing, project management (Merging skills) – training for

existing and awareness; best practise guidelines (how to sell software… demonstration models)

•  Science Park Model (physical and/or virtual) •  Incubators •  Education (matching programmes to needs: schools-Uni) •  Legal framework (data protection and IPR)

• Building the Brand •  National promotion of using ICT from local firms (incl. Government) •  Encouraging International partnerships •  Other???

Tertiary Education • Cooperation and Coordination

•  Association of education business (Cosmetology-UWI and all in between) to drive

• Capacity and Quality Development •  Immigration •  Standards for accommodation, facilities (classrooms etc) •  Accreditation and international certification of programmes •  Commercialisation support (marketing and strategy training, mentoring

for education inst.)

• Building the Brand •  Targeted Marketing of the whole offering (joint marketing opportunities)

through regional recruitment fairs, international fairs, recruitment agents

•  Facilitation (inward student travel agent) •  International promotion (Embassies, Press)

NEXT STEPS

Next Steps •  Further research on:

•  legislative and regulatory environment for services sectors •  institutional capacity for implementation

•  Support with Pilot Sector Survey •  Drafting Strategy

•  Case studies other countries experiences •  Dissemination and discussions (Sept -Oct)

•  IMPLEMENTATION ARRANGEMENTS DESIGNED •  Implementation – systematic, consistent and determined actions – who

(people whose job it is, but who) •  Revision of strategy and Workplan development (Nov-Dec)

•  PROJECT COMPLETION DECEMBER 2013 •  Work begins….!!!!