Imani Duncan-Price | Singapore lessons: Jamaica’s growth beyond BPOs
Do you ever wonder why Jamaica seems stuck in a low-wage, low-growth rut? It's a challenge that's constantly on my mind. As I watch and learn about global trends in artificial intelligence (AI), I am even more concerned as it's clear that the current accelerated investment focus on business process outsourcing (BPO) is a short-lived solution to Jamaica's employment problem.
On the one hand, speaking with employees of BPOs here, many of whom are university graduates, there is a high level of frustration. This is driven, in part, by them earning approximately J$4,300 per day at the entry level. This is less than a policeman or a teacher and double what a good day's helper or security guard earns.
BPO sector gone in 7 years?
On the other hand, as we watch global trends, it's clear that the low end of the BPO sector in which Jamaica plays is ripe for automation. The type of 'Frequently Asked Questions' that the majority of current BPO employees use to answer customer queries can easily be automated with enough data and a human-sounding voice to deliver a higher level of accuracy and customer satisfaction.
Indeed, according to Gartner Inc, a leading global research firm, 25 per cent of customer service and support operations will integrate virtual customer assistant (VCA) or chatbot technology by 2020, up from less than two per cent in 2017. This would mean that one in four people in Jamaica's call centres could lose their job in two years. Some predict that all such jobs will be automated within five to seven years.
Jamaica missed the opportunity to transition to the next level from the 809 manufacturing free zones in the 1980s. So the question arises, are we using the BPO investment as a stepping stone to prepare the current and next generation of young people for the next wave of jobs? Is the Government looking for the next industry that can absorb labour but also enable our qualified citizens to earn more? We often hear talk of moving Jamaica up the value chain, but is there an actual plan to do so?
Singapore's development evolution can provide some insight on the way forward.
Today, Singapore has a range of innovation hubs and industries focused on knowledge-based manufacturing and services, including the pharmaceutical, biotechnology, and medical technology sectors. This, in part, accounts for their GDP per capita of US$53,000.
It was not always so in Singapore. When the country gained independence in 1965, its economic prospects looked bleak. In the aftermath of World War II, Singapore faced high unemployment, slow economic growth, inadequate housing, decaying infrastructure, and labour and social unrest. Then in 1968, with the announcement of Britain's departure from the island's bases, Singapore also faced the loss of 20 per cent of its jobs.
The Singapore Method
These problems led Singapore's leadership to play a strong role in guiding the nation's economy. Lee Kuan Yew's approach to state capitalism began in earnest. As such, the Singaporean government aggressively promoted export-oriented, labour-intensive industrialisation through a programme of incentives designed to attract foreign direct investment (FDI) with a targeted push. The Economic Development Board (EDB) was, and continues to be, central to this effort.
In 1966, to develop export-oriented industries, the EDB opened an overseas centre in New York, the first in a succession of global offices across the world. An early success was Texas Instruments, a US electronics company. It started its production line in Singapore in July 1969, fifty days after committing approximately US$1.5 million to make semiconductors and integrated circuits for export to world markets. The EDB took six months to secure this investment. Note, this would be a US$10-million (J$1.28-billion) investment in today's value.
All this contributed to unprecedented economic growth for Singapore, where the average annual GDP growth was 13.2 per cent between 1967 to 1972, and the country attained nearly full employment. In comparison, from 1967 to 1972, Jamaica's annual GDP growth was 7.6%, but unemployment increased from 13% in 1962 to 23.2% in 1972.
Comprehensive Approach to Investment Promotion
The EDB's philosophy, 'committed to deliver, courage to dream and bold in design', is enabled by its capacity to change, to stay ahead of world trends, innovate, and make quick modifications to meet changing times. Furthermore, besides being an investment-promotion agency and in addition to working with other relevant government agencies, the EDB has invested in projects to produce the necessary manpower, skills and technologies for industries. This was key to readying the Singapore population to move up the value chain as the country's economy developed.
In fact, in 1971, the EDB established an 'Overseas Training Programme' for Singapore's workforce training in industrialised countries, with two examples being Rollei of Germany and Philips of Holland. Furthermore, to develop a more highly skilled workforce that could command higher wages, the EDB, led by Prime Minister Lee Kuan Yew, successfully courted high-technology industries that provided training in the advanced skills required.
Subsequently, in the 1980s, the EDB established technology and design training institutions in Singapore jointly with the governments of Japan, Germany, and France. Additionally, the EDB administers the Skills Development Fund to encourage the right kind of manpower, training to improve productivity. Through this and other education initiatives, Singapore cultivated its human capital by building a wide pool of highly educated and flexible workers.
Indeed, with globalisation, the EDB looks to the world for resources in finance, technology, manpower and information, while promoting foreign investments in high value-added industries. The world is not short of investment money. Billions are sitting in financial institutions earning anaemic returns. This money seeks reputable, credible viable projects and places to be deployed - places that are idea and capability rich and corruption free. Money is not the problem for Jamaica. Money is not the scarce resource. It's all the other factors that hamper us.
Can Jamaica Reorganise for Growth?
Imagine if government ministries and ministers in Jamaica could move past the silo approach and merge the Development Bank of Jamaica (DBJ), JAMPRO, The Productivity Centre, and the Urban Development Corporation (UDC) to develop a true one-stop, pro-business quasi-public agency, with resources for implementation? What if global trend analysis and forward planning were done by the PIOJ in an active way to continuously inform the growth strategy of this 'one-stop supermarket'? What if this then informed curriculum development in high schools, tertiary institutions, and the thrust of HEART?
Imagine if we taught English as a second language in the majority of our primary schools and high schools as they do in Singapore? If we could have a real conversation about some of the elements that hinder Jamaica's progress, we could enable the majority of the population to effectively speak the global language of commerce, significantly reduce the frustration of overseas investors, and also enable small businesses and medium-sized entities to advance in Jamaica and abroad.
Surely, as William Mahfood said in 2016, establishing such an integrated and focused solution would be more effective for growth than depending on a phone call to the right 'one man' of the Government. What if you don't have his number?
- Imani Duncan-Price is chief of staff for the leader of the Opposition, a World Economic Forum Young Global Leader, Eisenhower Fellow, and former senator. Email feedback to email@example.com and firstname.lastname@example.org.