Local BPO players unfazed by Trump’s protectionist threat
Local business process outsourcing (BPO) stakeholders have declared that they are confident that the protectionist policy position of United States President-elect Donald Trump, which focuses on keeping jobs in his country, will not have major implications for the sector.
Throughout his presidential campaign, Trump stated that there would be an imposition of tariffs on imports, especially from Mexico and China, as part of an effort to bring jobs back to the US.
He argued that globalisation has brought more harm than good to the US and claimed that the outsourcing of jobs to cheaper markets was hurting the economy.
Cognizant of the impact that Trump's stance could have on Jamaica's BPO sector, the Business Process Industry Association of Jamaica (BPIAJ) met last Friday but opted not to make a statement.
Gloria Henry, assistant vice-president of operations at the Port Authority of Jamaica (PAJ), which is responsible for the Montego Bay Freezone, where 80 per cent of the BPO firms operating in Jamaica are located, is of the view that Trump's primary target is manufacturing and goods-producing jobs, not the services sector.
She admitted, however, that if Trump's proposals are implemented, there would be some impact on the BPO industry.
"I do believe that American businesses will want to defend their decisions to outsource, given the impact on their bottom line," said Henry.
"Companies outsource to take advantage of lower costs, better technology, and even greater focus on quality in non-core areas. These collectively help them to drive more innovation, create more products and services, and offer greater value to their customers at competitive prices."
NEED TO DIVERSIFY
Henry said she believed that like Brexit, Trump's position provides an opportunity for local players to be more adventurous in terms of diversifying their portfolios to other markets.
"We have to respond to this threat with a carefully designed strategy. I am of the view that players should look to the European market to diversify their portfolios," said Henry. "European shared services are a sizeable market, with high-value jobs that should be economically attractive to our educated professionals, and given our exchange rate, viable for the outsourcers."
Davon Crump, CEO of Global Outsourcing Solutions Limited, is convinced that the local economy will withstand pressure from any impending US policy.
"Regardless of the policies that will be implemented by the new US administration, I do not believe that such a decision will affect us," Crump told The Gleaner.
"With the president-elect operating several business offerings over the years, he would know that when businesses outsource to other countries, the intent is always to improve their bottom line."
The BPO sector is valued at approximately US$105 billion globally and has been identified as an important vehicle to grow the local economy. In fact, Prime Minister Andrew Holness is banking on the sector to provide thousands more jobs before long.
Currently employing approximately 22,000 agents, Jamaica is ranked 43rd as a BPO destination. The country is pushing to increase this number to 30,000 by 2020.
US international BPO firm Xerox is the largest employer in the sector, with almost 7,000 agents at different locations across the country.