Nearshore opportunity for Europe:
• Time zones similar to Europe offer immense near-shoring opportunity for the region. Mauritius has the greatest time difference in the region with London, and that is of four hours.
• The cornerstone of value proposition of any location is availability of talent, its employability and scalability. Improving higher education & multilingual language skills are key accelerators. Major countries of the region come in the top 100 of the global higher education index.
• Buyers are looking at a wider range of language skills. The language capability (English, German, French, Arabic, Spanish) available here is not easily available in other locations.
• There are several areas of improvement needed, yet there is improvement in the top outsourcing cities of the region. The improved infrastructure provides better broadband connectivity and electricity supply – this is essential for operational continuity and reducing downtime
• Various government agencies have been formed to smoothen the procedures to start the business, protect the investor and reduce the corruption. Political Risk scores must be further improved in the region
Global Clientele
With 63% of all developed countries in Western Europe, it is the largest cluster of buyers across the world. This fact has not escaped the attention of large business firms from across the world that have set up centers in the region to cater to the domestic markets in these developed economies.
Thus Africa and Middle East cater to the global clientele indirectly - this has successfully built a strong brand for “Nearshore to Middle East & Africa”. What Latin America is to the US, experts say Africa and Middle East will emerge for Europe.
Centers of Excellence in Middle East & Africa-
• Cairo: best-in-class promotion strategy followed by the government of Egypt
• Johannesburg: does not have geographical proximity but does have the advantage of time and cultural proximity to UK and other clients in Western Europe
• Casablanca: Expected to emerge as a strong player in coming years with its
• excellent French capabilities
Offerings of the two main regional hubs of Africa
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Sub-Saharan Africa (Southern, West, East, Central)
• English, French, Portuguese,
• Banking, Financial Services, Insurance (BFSI)
• Telecommunications
• Voice
• Back Office
• KPO
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North Africa
•Arabic, German, Spanish
•IT Services
•Software development
• Backoffice
•Computer programming
•Back Office
•R&D
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South Africa has identified and adopted the following five strategic pillars for strengthening and enabling its IT and BPO structure:
• Talent Development
• Strategic Marketing
• Quality Standards
• Incentives
• Telecoms
Africa: an Alternative to India and Philippines
• Africa lies in between the US and India and thus provides an evening shift for US offshorers versus India’s night shift. This further enhances the low attrition value proposition for Africa
• Setting up an African operation can costs 10 % -20% than India
• Despite the Economic Recession, African markets have grown at a rate of 5% -6%
• The Services Sector contributes to over 60% of the GDP of some African countries
• African Nations are formulating policies that encourage the development of the IT and BPO Services
• Free trade zones, tax exemptions, providing incentives for technology business operations, relocation and development are some of the support measures offered
• Governments have steadily reduced the regulatory overhead and timeline required to start a business.
• Africa is a risk-diversification option for India and the Phillipines
| Q/A
Q What are the political risks in South Africa?
Experts feel that the entire region is still reeling from certain events of the past, which has prevented the outsourcing industry from going to the region as fast as it should have. But now varied requirements are coming from different source geographies.
Q: What is the effect of China's influence in Africa as China continues to use its economic power to buy natural resources in the region?
China has been focused on natural resources and commodities. There have been a lot of influences as far as services economy is concerned.
But one issue where China’s influence is having a spillover effect is the infrastructure. China has been helping build infrastructure in several African cities in return for commodities.
Q What is the role of World Bank in promoting IT/ITeS or BPO activities in the region?
World Bank is taking a keen interest and supports various projects across the continent. Individual countries approach the World Bank with their needs. Kenya has projects funded by the World Bank. In Rwanda, it is funding an initiative called eRwanda, which is about developing ITC in the country.
In such projects, the World Bank funds developing human skills, infrastructure particularly in the BPO sector. They help develop SMEs in the sector. It promotes uptake and usage of IT by the government, so that at the end of the day, the government can itself kickstart the outsourcing sector by outsourcing its own activities.
The World Bank also helps countries attract FDI to the BPO/ITeS sector. Helping ranges from assisting the formation of implementing agencies to help building capacity in a particular sector.
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