#1EXPORT PROMOTION AND INVESTMENT ATTRACTION IN THE GLOBAL SERVICES OUTSOURCING SECTOR Fabrizio Opertti Chief Trade and Investment Division IDB#2Trends in Global Services Exports IDB#3Services sector is dynamic and growing rapidly, and more resilient to shocks 20,000,000 18,000,000 16,000,000 14,000,000 12,000,000 10,000,000 8,000,000 6,000,000 4,000,000 2,000,000 0 1980 1982 1984 Services Source: UNCTADstat and IMF 1986 1988 1990 1992 1994 Goods Global Exports, by value US$ Millions 1996 1998 2000 2002 2004 2006 2008 Participation of services % 2010 2012 2014* Services contribute to 70% of world GDP but make up less than 25% of global exports. 0 5 25 20 15 10 IDB#4Billions Jamaica's Services Sector - Growing in emerging areas Services represented 66% of total Service exports (BoP, current US$) 3.1 3 2.9 2.8 2.7 2.6 2.5 2.4 2011 2012 2013 2014 2015 exports in 2015 Jamaican services exports have increased by 17% in 5 years Chiefly concentrated in travel services (78%), ICT (10.5%) and transport (6%) ☐ ICT share has grown from 7.6% in 2006 to 10.5% in 2015 Outsourcing industry earns over $240 million annually Competition is fierce but Jamaica has natural advantages, which if complemented by an enabling environment and investment, can raise its prospects significantly IDB#5Investment Lending to Support the Global Services Outsourcing Sector Experience of the IDB IDB#6The Trade and Investment Division (TIN) TIN manages the operational program of the Integration and Trade Sector and acts as the focal point for collaboration with other IDB sectors in the origination and implementation of operations Work Program Operational Strategy Priority Focus Cutting-edge analytical work Technical co-operations and trade and investment forums Loan portfolio "Boutique Lending" Financial resources accompanied by technical assistance and transference of best practices Improve the performance of the operational portfolio, in particular, monitoring/supervision and evaluation IDB#7TIN's current portfolio in supporting services exports CO-L1094 $12M TT-L1038 $18M UR-L1060 $10M AR-T1099 $250k The Trade and Investment Division has: ✓ Extensive experience in supporting sector (active and closed operations) ✓ Significant network of experts, both within the Bank and outside of it ✓ Strong reputation for creating opportunities for business and networking (Outsource2LAC, ConnectAmericas.com) ✓ Essential experience in export promotion and investment attraction, critical to growth in the sector IDB#8Key objectives of TIN services outsourcing operations A Implement actions leading to tangible results: ✓ Increase in services exports ✔Growth in FDI in services sector ✓ Creation of quality and sustainable employment Focus on niches in areas where countries have a B competitive advantage C D ✓ Capitalizing on location, language, education-level Create a collaboration scheme for increasing capacity ✓ Local universities and training academies Strengthen institutional capacity, investment attraction and export promotion ✓JAMPRO ✓ BPIAJ IDB#9Targeted approach to growing the services outsourcing sector 1 Regulatory Framework Update regulations in areas of key importance to industry Create regulatory incentives to attract new players Create a level-playing field by supporting competition 2 Human Resources Increase aptitude, attitude and retention of human resources ☐ Develop versatile (soft skills, customer service) and specialized (coding) capacities Create alliances between universities & firms to align the sector with the market (finishing schools) 3 Entrepreneurial Ecosystem ☐ Strengthen local providers (SME and supply chain programs) Attract foreign investment Promote the country as a provider of IT, BPO and KPO ☐ Consolidate institutional support IDB#10Uruguay - Program to Support Global Export Services The country offered a mix of important sectoral incentives (Free zone law, Investment regime, Software law, etc.) and high-quality infrastructure. Despite establishing the conditions to become an important player in this industry, Uruguay had to confront two principle challenges: . • Improve the international perception of the country as an excellent destination for FDI in the sector Improve the quantity and quality of human talent available to work in the sector. Objective of IDB Operation: Increase growth, employment and investment in the global services export sector. Expected Results: Growth of 55 percent in services exports, 66 percent in investment and 28.4 percent in employment. Priority Services Sectors: Pharmaceutical and Life Sciences; BPO; ITES; and Logistics Amount: US$13 million (IDB Financing $10 million) IDB#11Uruguay Smart Services - Structure of the Program Plans International Promotion Uruguay Information Team smart Services BUSINESS SERVICES PRIME LOCATION IT INDUSTRY PHARMA & HEALTH ARCHITECTURE LIVING TECHNOLOGY SCIENCE FOR LIFE & ENGINEERING ALLIED PROFFESIONALS Investor Support Improved business climate After care Development and Availability of Talent smart talent schools finishing IDB#12Uruguay Smart Services - Dedicated website Uruguay smart Services News You Tube in ▸ Español Search... smart Why Uruguay BUSINESS SERVICES IT PHARMA ARCHITECTURE INDUSTRY & HEALTH & ENGINEERING ⚫talent finishing. schools: Uruguay A SMART DECISION FOR GLOBAL OFFSHORE SERVICES Youth pushing forward at Formatec Program 1 2 3 Uruguay landed at the OutsourcezLAC 2014 More than 60 young Uruguayans of Jubilar, Providencia and Espacio Adolescente Uruguay XXI joined for the fourth year in a row the Outsource2 LAC 2014, a www.smartservices.uy IDB#13Trinidad and Tobago - Global Services Promotion Program Trinidad and Tobago has good potential to position itself as a vibrant ITeS location due to the quality of its human capital, ICT infrastructure, and the presence of global IT providers. Objective of IDB program: Advance Trinidad and Tobago's positioning as a renowned location for the global provision of ITES. Expected Results: Growth of 75 percent in services exports, 50 percent in investment and 82 percent in employment. Key Deliverables: Global Services Internationalization Hub; Finishing Schools; Sector Promotion and Branding; and Regulatory Framework update Amount: US$18 million In Nov 2016, GOTT launched its internationalization hub and offered a Google Launchpad training for the ITeS sector! IDB#14Developing a program to support services in Jamaica ✓ Internationalization of SMES ✓ Export Promotion and Investment Attraction ✓ Strengthening capacity and developing human capital ✓ Strengthened competition and trade policy ✓ Reforms to the regulatory and institutional frameworks ✓ Innovation ✓ Connectivity ✓ Training (Finishing Schools) IDB#15Finishing Schools - Providing tailored training programs Objectives of Finishing Schools: ☐ Contribute to the increase of global services exports by addressing the immediate needs of firms (to establish operations, grow, gain new clients or adapt to new market conditions) ☐ Develop specific (technical or administrative) or generic competencies. In Uruguay, the program successfully developed finishing schools by partnering with several different institutions and training providers based on demand. In Trinidad and Tobago, the program recently held a call for proposals and offered training from the best provider (e.g. Google Launchpad)based on expressed need. IDB#16Finishing Schools: Modalities New Firms/ Operations • Incentivize and facilitate the establishment of new firms as well as the expansion or development of new operations in existing firms • Incentive: up to 70% of costs Established Firms Training provider • Incentivize established firms to scale up their operations by improving the efficiency of their existing human resources in order to maintain or expand their exports • Incentive: up to 50% of costs Strengthen capacity and design curricula in line with the demands of the industry • Incentive: up to 40% of costs IDB#17Outsource2LAC & ConnectAmericas.com Innovative Forums and Social Media Platforms for SMEs BID Banco Interamericano de Desarrollo#18o2lac Outsource2LAC 02LAC is the most popular and influential Outsourcing and Offshoring forum in the region, with participation from prominent actors in the global services sector. Objectives of the event The objective of the forum is to provide an opportunity for participants to exchange the latest trends in the global services sector and identify business opportunities in Latin America and the Caribbean. We expect the participation of over 500 companies in the services sector, including representatives of major companies in Latin America and the Caribbean, Asia, Europe and North America. Optimization Changes in market dynamics: implications and opportunities for the region Globalization Externalization of processes and the power of information in the service sector Diversification Diversification and specialization outsourcing process. Some numbers of our past events 3028 TOTAL PARTICIPANTS 3419 BUSINESS MEETINGS 32 CONFERENCES 133 SPEAKERS#19o2lac Outsource2LAC Costa Rica 15-16 March, 2017 San José, Costa Rica outsource2lac CORTEMALA 2014 BID Mejorando vidas connect americas PROCOMER COSTA RICA exporta 31 ✓ 6th edition ✓ Over 600 firms expected ✓ Event is free comex esencial COSTA RICA#20connect americas IDB's Social Media Platform for SMEs ConnectAmericas.com is a free, online platform designed to help SMEs strengthen and grow their business. Registered users can: o Browse through hundreds of purchasing announcements from Governments and Corporations and submit bids through the platform o Get in touch with more than 95,000 registered businesses ○ Apply to receive support from IDB funded programs in their countries o Request financing from commercial banks in their countries o Enroll in free massive online open courses and attend webinars Since launching in 2014, ConnectAmericas has nearly 100k registered users, reporting US$152 million in transactions. EL Google DHL VISA MAERSK Alibaba.com LINE IDB#21connect americas Jamaican Entities Engaged in 2016 JC JEA Jamaica Exporters Association LET'S THINK BIGGER. TOGETHER. MANY CIT THE JAMPRO MSME TRADE & INVESTMENT JAMAICA ALLIANCE PRIVATE HE ORGANISA SECTOR JMA IDB