By Tessa Jacques, President of CAIPA and Director General for the Center of Investments in Haiti
Known predominately for its warm weather, pristine beaches and relaxed atmosphere, the countries of the Caribbean region are renowned worldwide as top destinations for leisure and relaxation. However, although tourism has been and remains the main economic driver in many countries, as Small Island Developing States, they are subject to a broad range of vulnerabilities, including adverse weather conditions, such as hurricanes and tropical storms which occur annually.
More importantly, since the Global Financial Crisis of 2008, and the economic recession that followed, Caribbean countries have had to grapple with sluggish economic growth and double-digit unemployment rates, especially among the youth population. There has thus been a concerted and continuing focus on diversifying their economies, by leveraging technology.
The Caribbean region tends to be perceived as one cohesive and uniform unit, but it comprises a diverse mix of over 30 countries, covering over 2.75 million square kilometres between North and South America. Countries range in size from over 214,000 square kilometres, in the case of Guyana, to Anguilla which is around 91 square kilometres, with populations of over 11 million in Cuba, to as few as 5,000, in Montserrat. It, therefore, means that although some countries can easily accommodate labour-intensive segments, such as the contact centre space, there is also considerable scope for lower volume, but specialist BPO segments, along with shared services.
In being located between North and South America, the Caribbean region is greatly influenced by the North American culture, particularly that of the United States. Further, with many countries having large Diaspora populations in that region, there is a strong cultural affinity and awareness, which has been a distinct advantage to its services based industries, such as tourism and nearshore outsourcing. However, due to their shared history, close bonds with Europe also exist, especially in the areas of trade and tourism.
Thanks to their colonial background – having been colonies of England, France, Holland and Spain in the then ‘New World’ – language, cultural and societal structures still differ across region, resulting in each country having their distinct character, although a broad range of commonalities exist. Historically, the economies of the Caribbean region were agriculture-based, with the main crops being sugar, and to a lesser degree, bananas. Key exceptions were Jamaica, Guyana, Suriname and Trinidad and Tobago, where the mining (bauxite and gold) and energy (oil and gas) sectors were the largest contributors.
Caribbean countries had enjoyed preferential treatment for their produce in Europe, but they lost that preferred status in the 1990s, which resulted in the countries that had been dependent on agriculture shifting their focus to service-based industries, such as tourism and IT-enabled services.
Offshore Outsourcing in the Caribbean Region
Offshore outsourcing operations have been present in the Caribbean region since at least the 1990s, but it is since the early to-mid 2000 that countries have been actively promoting that industry and strengthening the enabling environment that supports it. Although most countries’ foray into the outsourcing space would have been via data entry, they quickly progressed to the high-touch, voice-based services,
such as the sales, customer care and technical support segments.
Across the Caribbean, there are over 100,000 people directly employed in the industry and is estimated to generate over USD 1.5 billion in sales. The region is also home to some of the largest and best contact centre firms in the world, many of which have grown exponentially once a presence was established.
With a considerable portion of the region’s outsourcing industry focussed on voice-based services, but in an effort to make their industries more resilient, countries across the region are beginning to broaden their horizons to specialist BPO and shared services segments, particularly in areas such as Financial and Accounting (F&A), Human Resources and Legal Process Outsourcing. Countries, such as Jamaica and Trinidad and Tobago, have small but growing F&A and shared services practices. However, other countries, such as Anguilla, the British Virgin Islands, the Turks and Caicos Islands, which are globally recognised for international financial services, are also looking to leverage that competence and develop their own F&A and shared services industry.
Read this and other insights on the conditions and opportunities of co-operating with Caribbean based technology and business process partners and see who to contact locally with questions and support at the Outsourcing Destination Guide Caribbean: https://www.outsourcing-destinations.org/outsourcing-destination-guide-caribbean/ (available as free download).