MINISTER OF Industry, Commerce and Technology Phillip Paulwell has officially dropped the target of creating 40,000 jobs in the information technology (IT) sector and adopted a slow-growth model.
His Ministry's attempt to create these jobs in three years by priming the industry with $1 billion in public sector funds has been dogged with failure and controversy. The organic growth of companies such as Sitel Caribbean, has now been adopted as a more appropriate basis on which the IT sector can develop, Minister Paulwell said yesterday.
"It is quite obvious that we are not going to achieve, in the three years, the 40,000 jobs," Minister Paulwell said at a Private Sector Organisation of Jamaica (PSOJ) awards ceremony. "We were wrong in the original projections for job creation in IT."
The target of creating 40,000 jobs in the sector by March of next year had been announced by the Minister in his April 2000 Budget presentation. As development banks have a conservative approach to lending, the Minister told Parliament, a $1 billion Venture Capital Loan Equity (Intec) Fund was to be established to ease loan access for projects under development.
But amid mounting pressure for an investigation of the Government's dealings with NetServ, one of the new IT projects, Minister Paulwell announced last December that he would ask the Auditor-General for an immediate audit of the Intec Fund.
This followed the disclosure that the National Investment Bank of Jamaica (NIBJ) had placed NetServ, a recipient of $180 million under the Intec Fund, in receivership saying an investigation had determined that the operations were no longer viable.
Apart from the issues surrounding the Intec loan to NetServ and other firms, a major problem with the IT programme has been its failure to create the promised jobs.
"In fact when we are looking at the job count, we are finding more jobs being created in telecommunications than in the core IT areas that we had anticipated," Minister Paulwell said yesterday. He spoke at a PSOJ function at the Hilton Kingston Hotel, which recognised companies for job creation.
The goal had been to create 8,000 jobs by March of last year and a total of 20,000 by March of this year. But the last count provided was that about 6,000 jobs had been created and some of the key companies in the sector have been cutting staff recently.
"We have learned some lessons," the Minister said. "As we move forward, because we have to, there are tremendous possibilities, but you need to learn from some of the lessons."
What has been learned is that "you need to start slowly," Minister Paulwell said. The companies have been taking longer than expected to establish themselves and "it takes time for you to understand the real business." Jamaica provides English-speaking trained people, "but we found that a lot more work has to be done to get us to a level of international acceptability," the Minister said. The slow approval process, shortage of office space and world economic slowdown have also impacted on the development of the IT sector.
"There is also one admission that investors have not really been able to galvanise the support of other investors to make sure that their inputs in the various businesses were commensurate with the government's," Minister Paulwell said.
Jamaica could eventually develop a successful IT sector if the country continued developing a trained group of people with the skills to support it, he said. To achieve their present success took a decade in Ireland and 15 years in India.
"We are using SITEL as one of the models as we move forward," Minister Paulwell said. "They started slowly. They recruited and trained carefully. And today they have authorised me to say that they are now growing by 200 employees."
Part of one of the biggest call centre companies in the world, SITEL started operating in Jamaica about two years ago with just 30 employees and expect to have 600 on the payroll by June. Unlike many of the other recently established companies, they are not involved in telemarketing, but provide customer services via telephone, e-mail or web charts on behalf of several international companies
Minister Paulwell mentioned Westcom Call Centre in Westmorelend, operated by local entrepreneur Norman Anderson, as another IT company which had developed on a stable growth path.
"You need to start in the correct way; on the right footing; not by being too large; but to ensure you have the right cadre of staff; you have all the contracts in place and that you grow," he said.
