Editorial | Low-tech, low-wage dilemma

Even with Anand Biradar’s far less dire prediction, Jamaica’s business process outsourcing (BPO) sector – comprising primarily call centres – could be heading into difficult times.

In two years or so, says Biradar, the president of Global Services Association of Jamaica, an industry group, BPOs could shed up to 20 per cent of their workers – that is, 11,000 employees.

Matthew Stone, a researcher in artificial intelligence (AI) and a PhD candidate at The University of the West Indies, Mona, is even more pessimistic. The accelerated use of AI in business processes, Stone believes, could slash 70 per cent of BPO jobs in five years. In other words, more than 38,000 of the 55,000 would be out of work, having to find new jobs.

Any of these outcomes would, certainly in the short to medium term, be bad for the economy. The BPO industry, the Government says, grosses an estimated US$900 million in 2022 and is the economy’s fourth-largest employer after agriculture, the public sector and tourism.

But for the potential scale of the fallout, this prognosis is not new. A year ago, this newspaper noted the dangers – and opportunities – for the BPO sector as businesses, driven by the COVID-19 lockdowns and people increasingly working from home, accelerated the use of AI technologies, including ‘chatbots’, or artificial conversation entities.

NEW PARADIGM

Earlier, in 2018, Richard Byles, now the governor of Jamaica’s central bank but then the chairman of Sagicor Jamaica, a financial conglomerate, complained that Jamaica’s BPOs, like too many of the island’s businesses, operated too far down the global economic food chain, providing mostly telephone answering-type jobs. Jamaica had to climb its way up the rung.

“... We want the BPO business where lawyers are given a part; where accountants are doing work; where paramedics are giving advice,” Mr Byles said. “We want to be in the high-level BPO business.”

The Jamaican authorities and the sector’s leaders are not oblivious to these issues. They have tried to address them. Efforts have been made at what the sector’s promoters call upskilling of employees and seeking higher-value business.

However, the advance in AI technologies, evidenced by developments including last November’s launch of ChatGPT (chat generative pre-trained transformer), a sophisticated chatbot whose engagement of topics comes close to, if not matches, the sophistication of humans. AI systems will only get better.

In Jamaica, discussion of ChatGPT has largely focused on its potential use in education, including whether students may use it to cheat, especially in writing essays. Minds, though, should also be concentrated on how AI will impact the economy and jobs, and how Jamaica is preparing itself for the new paradigm.

URGENT TRANSFORMATIVE DISCUSSION

A serious discussion must take place on whether Jamaica has the capacity to compete higher up the global food chain; what might be required for it to do so; and whether the systems and infrastructure are in place to facilitate a globally competitive economy. In this regard, the absence of a robust, Government-led debate on the report by the Orlando Patterson Commission on reforming Jamaica’s education sector, which is critical to this enterprise, is of deep concern.

With respect to BPOs, for example, Jamaica faces a number of obvious, though understandable paradoxes. In recent times, the sector has complained that its industry’s growth is being constrained by difficulty in recruiting suitable staff, in part because of low educational levels. The problem of the island’s poor educational outcomes is well known and is in need of urgent fixes – not just for the BPO sector.

At the same time, the Government’s investment promotion agency advertises that wages at Jamaica’s BPOs are between 40 per cent and 60 per cent “lower than corresponding salaries in North America”. While this reflects Jamaica’s current position in the global economic matrix, it also helps to reinforce the island as an economy that Professor Don Robotham, in a recent article in this newspaper, described as “confined to low value added, extractive raw materials and raw services activities”. It shows productivity levels that declined by an average of one per cent annually over four decades.

In the past dozen years, across administrations, Jamaica has stabilised its macroeconomy. It has radically reduced its debt as a proportion of GDP.

The next, but so far elusive step is to deliver robust growth, and, as Dr Robotham put it, extricating the economy from the “ ... low value-added ... low-tech/low-wage trap”.

This demands urgent transformative discussion about industrial policy and supporting education structures, with a strong focus on science and technology, including vocational education and training. There are, however, some low-hanging fruits that can be harvested in this endeavour. An obvious one is returning the University of Technology to its core – rather than competing with other more capable institutions to train business professionals and lawyers.