The governmental and agency support a nearshore location receives is the seventh and final category analyzed in the T&T IFC whitepaper “7 Critical Factors to Consider Before Selecting a Location in the Booming Nearshore Market.” In the weeks to come, we will publish more sections in an ongoing series that will further break down the aspects that go into the nearshore decision-making process. You can also read the introduction and other sections here:
- Introduction: 7 Critical Factors
- Part 2: Business and Political Climate
- Part 3: Talent Pool
- Part 4: Service Specialization
- Part 5: English Proficiency
- Part 6: Natural Disaster Risk
- Part 7: Connectivity and Infrastructure
Governmental Agencies and Support
With so many destinations now trying to attract nearshore business, it is clear that promotion matters. These days, say the analysts, any country that wants to be a serious player needs to be investing in this side of the game. “There’s a marketing arms race,” says Johan Gott, an analyst at Chicago-based global consultancy AT Kearney. “Who can get their message out?”
Costa Rica has been at the vanguard for the better part of a decade. Its CINDE agency has piggybacked on the positive ecotourism and safety reputation of the country to bring in foreign executives and get them to quickly sign on the dotted line with business-friendly incentives.
Colombia is showing progress in this area as well. Though its mission goes far beyond the services sector, the government changed the name of its promotion agency from ProExport to ProColombia a few years ago, and its efforts have helped to start to change the perception of the country from scary to business friendly.
“Costa Rica, Colombia, and Mexico have government support for the services industry, and it’s quite important, both for attracting new BPO providers to the country — because they have an easier way into the country — and to grow the industry,” says Sebastian Menutti, an industry analyst at the San Antonio-based consulting and research firm Frost & Sullivan.
Lately, Jamaica has also been making a services push, investing large sums of money into its JAMPRO agency to attract services work. The government’s continued support for these efforts even amid an economic downturn shows commitment to a program that it believes will pay dividends in time. “The government in Jamaica is engaging with the local BPO companies to provide better conditions for the industry to develop in the country,” says Menutti.
In 2008, Trinidad and Tobago proved to be forward thinking by forming a specialized agency — the Trinidad and Tobago International Financial Centre (T&T IFC) — to
attract more financial sector companies. The agency has helped Guardian Group, a leading insurance company in the Caribbean, advance on its digital transformation by connecting the company with Sutherland Global.
T&T IFC was also instrumental in convincing Scotiabank that Trinidad and Tobago is the place to be. The Canadian bank’s entrance to the shared services market represented a big success story for the country, and Scotiabank has continued to ramp up its presence here in recent years, crediting the agency for smoothing along the process and helping it add 200 more jobs this year.
“The T&T IFC played a pivotal role, along with the Ministry of Finance, in ensuring the success of this venture,” Anya Schnoor, Scotiabank’s Managing Director, told Finance TnT last year. “The T&T IFC co-ordinated with various ministries and agencies to secure all the required approvals which were needed and supported our efforts.”
Salil Dani, a vice president in the global sourcing service line for the Dallas-based consulting and research company Everest Group, notes that companies are hearing this message and appreciate both the pitches that governments make and the initiatives they establish to train workers. “Companies are realizing the potential that nearshore locations offer beyond just traditional functions,” says Dani. “Accordingly, the governments and promotion agencies are taking some steps. A lot still has to be done. But they are taking some steps to make the talent ready for these next-generation skills.”
Ultimately, however, there is a limit to what a promotion agency can do. They are a very important asset — essentially a necessity for any country looking to attract serious companies — but the corporate decision makers are going to pick a location based upon its ability to meet their needs rather than marketing materials and a pleasant visit.
To understand how a country really delivers on its potential, companies look to other companies. “The most important promoter of a country is not the government — it is the foreign companies that are already operating there,” says Gott. “They are the best ambassadors that you can have, so you should definitely not only try to attract them — but once you have attracted them to your country also try to make sure that they are happy and able to expand. Because at that point, it kind of sells itself.”