progress report (draft) - CTA Economic · Barbados(Services(Sector(Development(Strategy! Project Recipient Barbados Coalition of Services Industries Project Funded by Commonwealth

!

! !!

!

!

!

! !

!Barbados!Services!Sector!!Development!Strategy!

!!

PROGRESS!REPORT!July!2013 PREPARED&BY&

Mark&Hellyer&of&&&

&&&

!

! !!

!

!

!

&

&

& &

!

! !!

!

!

!

&

Barbados(Services(Sector(Development(Strategy!

Project Recipient

Barbados Coalition of Services Industries

Project Funded by

Commonwealth Secretariat PX/BRB/0735

!

! Project Implemented by

!!

!CTA$Economic$&$Export$Analysts$Ltd$505#Pinner#Road#Harrow##HA2#6EH#United#Kingdom##Tel:#(+44)#870#199#5835##Email:#[email protected]###Web:#www.ctaeconomic.com#

!

Memberships

!

! !!

!

!

!

!

! !!

!

!

!!!!!Acknowledgements!This!report!is!based!on!research!undertaken!between!29th!April!and!30th!June!2013.!It!involved!over!75!interviews!in!Barbados,!review!of!more!than!25!research!papers,!policy!documents!and!statistical! reports,! extensive!market! research! global! services!markets! and! close! consultation!with! the! Commonwealth! Secretariat,! Project! Steering! Group! and! the! Barbados! Coalition! of!Services! Industries! (BCSI).! The! team! is! extremely! grateful! for! the! organisation! and! guidance!provided!by!BCSI!and!the!openness!and!cooperation!of!all!participants.!However,!the!findings,!opinions!and!recommendations!expressed!in!this!report!remain!those!of!the!project!team and!do! not! necessarily! reflect! those! of! the! Commonwealth! Secretariat,! BCSI,! Government! of!Barbados!or!Project!Steering!Group.!

!

! !!

!

!

!

!

! !!

!

Contents!1# Executive!Summary!..........................................................................................................................!1#2# Situation!Analysis!.............................................................................................................................!3#3# Business!Process!Outsourcing!(BPO)!...............................................................................................!5#

3.1# Global!Market!.........................................................................................................................!5#3.2# The!BPO!Industry!in!Barbados!.................................................................................................!6#3.3# BPO!Potential!in!Barbados!......................................................................................................!6#3.4# Challenges!to!be!addressed!....................................................................................................!7#

4# International!Business!Companies!(IBC)!..........................................................................................!9#4.1# Global!Market!.........................................................................................................................!9#4.2# The!IBC!Industry!in!Barbados!..................................................................................................!9#4.3# IBC!Potential!in!Barbados!......................................................................................................!10#4.4# Challenges!to!be!addressed!..................................................................................................!10#

5# ICT!Services!....................................................................................................................................!11#5.1# Global!Market!.......................................................................................................................!11#5.2# The!ICT!Industry!in!Barbados!................................................................................................!12#5.3# ICT!Potential!in!Barbados!......................................................................................................!12#5.4# Challenges!to!be!addressed!..................................................................................................!13#

6# Tertiary!Education!Services!............................................................................................................!14#6.1# Global!Market!.......................................................................................................................!14#6.2# The!Tertiary!Education!Sector!in!Barbados!...........................................................................!16#6.3# Potential!for!Tertiary!Education!business!in!Barbados!.........................................................!17#6.4# Challenges!to!be!addressed!..................................................................................................!17#

7# Construction!Related!Professional!Services!...................................................................................!19#7.1# Global!Market!.......................................................................................................................!19#7.2# The!Construction!Related!Professional!Services!Industry!in!Barbados!.................................!20#7.3# Potential!for!Professional!Services!in!Barbados!....................................................................!20#7.4# Challenges!to!be!addressed!..................................................................................................!21#

8# Creative!Industries!.........................................................................................................................!22#8.1# Global!Market!.......................................................................................................................!22#8.2# Creative!Industries!in!Barbados!............................................................................................!22#8.3# Creative!Industries!Potential!in!Barbados!.............................................................................!23#8.4# Challenges!to!be!addressed!..................................................................................................!23#

9# Health!and!Wellness!Tourism!........................................................................................................!24#9.1# Global!Market!.......................................................................................................................!24#9.2# The!Health!and!Wellness!Tourism!in!Barbados!.....................................................................!27#9.3# Potential!for!Health!and!Wellness!tourism!in!Barbados!.......................................................!27#

!

! !!

!

!

!

9.4# Challenges!to!be!addressed!..................................................................................................!28#10# Business!Support!Services!............................................................................................................!29#

The!Role!of!Services!in!Competitiveness!........................................................................................!29#The!Business!Support!Sector!in!Barbados!.......................................................................................!30#Business!Support!Potential!in!Barbados!.........................................................................................!31#Challenges!to!be!addressed!............................................................................................................!31#

11# Conclusions!..................................................................................................................................!33#11.1# Guestimate!of!sectoral!breakdown!......................................................................................!33#11.2# Selection!of!Priority!Services!Sectors!...................................................................................!34#

!Progress!Report!

www.ctaeconomic.com! Barbados!Services!Sector!Development!Strategy!

!

1 Executive)Summary!The!following!section!summarises!the!key!findings!of!the!sector!analysis!and!makes!recommendations!for!the!sectors!to!focus!on!in!the!strategy!(highlighted!

in!the!table!below).!Combined,!these!sectors!would!generate!around!US$!450!million!(B$!900!million)!of!new!business!for!the!services!sector,!equivalent!to!10!

%!of!GDP.!The!strategy!would!not!just!focus!on!these!sectors,!but!develop!a!conducive!environment!for!all!services!sectors!so!an!addition!B$20!million!may!be!

expected!from!other!individual!services!providers!across!the!sector!!! BPO! IBC! ICT! Tertiary!

Education!Construction!

related!professional!services!

Creative!Industries!

Health!and!wellness!

Business!Support!Services!

Global!value!of!sector!

US$!135!billion! na! US$!1,200!

bllion! US$!40!billion! US$!1,700!billion!

US$!800!billion!

US$!100!billion! na!

Value!proposition!(medium!term)!

US$!55!million!

US$!63!miilion!

US$!192!million!

US$!150!million! US$!5!million! US$!5!million! US$!25!

million!US$!49!million!

Employment!generation!

2,000!direct!jobs!

750!direct!jobs!

800!direct!jobs!

Few!educators!with!many!indirect!jobs!!

100s! 100s! High!100s! High!100s!

Quality!of!job!!! Medium! LowGmedium! High! Mixed! High! Medium! High! Medium!

Ownership! Mixed! FDI! Local! Local! Local! Local! Mixed! Local!

Ease!of!realisation! Easy! Hard! Medium! Easy! Medium! Medium! Mixed! Hard!

Long!term!growth!prospects! Good! Good! Good! Good! Low! Low! Good! Good!

!Progress!Report!

www.ctaeconomic.com! 3! Barbados!Services!Sector!Development!Strategy!

!

2 Situation(Analysis!This!section!presents!an!overview!of!the!available!information!on!the!services!sector!in!Barbados.!The!data!presented!throughout!this!report!is!drawn!from!a!variety!of!sources!including!national!accounts,!international!trade!in!services!statistics!and!estimates!from!national!services!associations!and!private!sector! operators.! These! estimates! are! NOT! accurate! and! are! not! meant! to! be! definitive.! In! the!absence!of!more! robust!data,! these!estimates!are!a! tool! to!assist! in! the!prioritisation!of! the!wider!sector! strategy! being! developed.! However,! more! accurate! and! detailed! analysis! of! each! sector! in!Barbados!is!needed.!!

Services! are! the! most! important! component! of! the! Barbados! economy! amounting! to! B$! 5.5! bn!(US$2.8!bn)!and!accounting!for!65%!of!GDP.!Employment!in!the!services!sector!totals!94,700,!which!is!74%!of!all!employed!persons.!Approximately!21%!of!services!jobs!are!in!wholesale/retail,!19%!in!finance!and!business!and!18%!in!personal!services!provision!(including!education!and!health).!

Table!1!presents!the!available!data!on!the!value!of!the!different!services!sectors!and!exports!from!official! statistics.! It! shows! that! 42%!of! services! income! in! Barbados! is! in! the! finance! and!business!group,!of!which,!40%!is!derived!from!export.!Around!31%!of!services!are!in!distribution!and!leisure!(including!hotels,!restaurant!and!retail),!of!which!over!80%!is!export.!

Table&1:&Principal&Services&Sectors&in&2011&

& Value&of&the&Sector&1&&

(B$m)&

%&of&the&services&sector&

Employment& Exports2&&

(B$m)&

%&Export&

Finance!&!business! 2321.8& 42.0%& 17,800& 921.4& 39.7%&

− Other!business!services&

− Insurance&

− Finance&

− Computer!&!information&

− Royalties!and!licence!fees!

! ! ! 753.6!

100.6!

37.8!

22.8!

6.6!

!

Distribution!and!leisure! 1704.9& 30.9%& 33,500& 1412.0& 82.8%&

Hotels/restaurant&

Wholesale/retail&

− Travel&

1043.5!

661.4!

!

! ! !

!

1412.0!

!

Transport!storage!and!communication! 609.9& 11.0%& 8,500& 95.4& 15.6%&

− Transport&

− Communications!

! ! ! 44.6!

50.8!

!

Construction! 374.7& 6.8%& 14,600& 5.4& 1.4%&

− Construction& ! ! ! 5.4! !

Personal!(incl.!health,!education!&!other)! 291.5& 5.3%& 17,400& 0.8& 0.3%&

− Personal!services& ! ! ! 0.8! !

Other! & & & 725& &

Total!Services! 5,524.6& 64.0%& 94,700& 3160& 57.2%&

Total!Economy! 8,626.0! ! ! ! !

1!Barbados!Economic!&!Social!Report!2011!2!Calculated!from!UNCTADStat!(2013)!

!Progress!Report!

Barbados!Services!Sector!Development!Strategy!

! !!

www.ctaeconomic.com!

!

4!

Situation(Analysis(

Within! finance!and!business!group,!other!business! services!exports! represent!one! third! (32.5%)!of!

the! sector.! Given! “other! business! services”! would! likely! also! have! domestic! sales,! it! is! almost!

certainly! the! largest! segment! of! the! group.!However,! little! is! known! as! to! the! relative! values! and!

importance!of!each!of!these!to!either!export!of!services!or!domestic!production.!

Based!on!discussions!held!during!the!scoping!mission,! the!following!sectors!have!been!assessed! in!

the!remaining!sections!of!the!report.!

Business!process!outsourcing:!! includes! call! centres,!back!office! support! and! is!part!of!business!

and! finance! services! valued! at! B$! 2.3! bn! and! export! of! other!

business!services!B$!750!million.!

International!business!companies:!includes! foreign! companies! registered! in! Barbados! where! their!

main!activities!are!conducted!elsewhere.!This! is!part!of!business!

and! finance! services! valued! at! B$! 2.3! bn! and! export! of! other!

business!services!B$!750!million.!

ICT!services:! includes! IT! installation! and! software! development! part! of!

business! and! finance! services! valued! at! B$! 2.3! bn! with! exports!

valued!at!B$!23!million.!

Education!services:! includes! higher! education,! technical! and! vocational! training,!

professional! qualifications! and! English! language! training.! These!

are!part!of!personal!services!valued!at!B$291!million!and!export!

of! personal! services! of! B$! 0.8! million.! Revenue! from! foreign!

students!will!also!be!a!small!part!of!hotels,!restaurants!and!retail!

of!B$!1.7!bn!and!retail!and!travel!exports! (spending! in!Barbados!

of!foreign!nationals)!of!B$!1.4!bn.!

Professional!services:! includes! architectural,! engineering,! surveying,! planning! and!

management! consultancies! and! is! also! part! of! business! and!

finance!services!valued!at!B$!2.3!bn!and!export!of!other!business!

services!B$!750!million.!

Creative!Industries:! includes!performing!arts,!music!recordings,!film,!art,!photography!

and! fashion! design.! These! sectors! will! cut! across! business! and!

finance,! personal! and! hotels,! restaurants! and! retail! valued! at!

B$4.3!bn!and!part!of!exports!of!royalties!of!B$6.6!million.!!

Health!and!Wellness! includes!medical!and!wellness!services.!These!are!part!of!personal!

services!valued!at!B$291!million!and!export!of!personal! services!

of! B$! 0.8!million.! Revenue! from! foreign! students! will! also! be! a!

small!part!of!hotels,!restaurants!and!retail!of!B$!1.7!bn!and!retail!

and!travel!exports!(spending! in!Barbados!of!foreign!nationals)!of!

B$!1.4!bn.!

Business!Development!Services:! includes!services!delivered!to!value!chains! in!Barbados! is!part!of!

business!and!finance!services!valued!at!B$!2.3!bn.!

!Progress!Report!


!

BPO(

3 Business'Process'Outsourcing'(BPO)!The!definition!of!Business!Process!Outsourcing!is!a!broad!term!to!include!the!hiring!(outsourcing)!of!an!outside!company!to!undertake!specific!business!functions.!The!most!common!BPO!functions!are:!custom! service! and! sales;! finance,! accounting! and! payroll;! human! resource! management! and!procurement!and!logistics.!It!also!includes!Knowledge!Process!Outsourcing!(KPO),!which!is!defined!as!activities!which!require!greater!skills,!knowledge!and!education!to!handle! (essentially!higher!value!BPO!across!the!main!sectors).!BPO!does!not!generally!include!ICT!and!software!development.!

3.1 Global!Market!

The!global!BPO!industry!(including!outsourcing!business!services!to!national!and!foreign!companies)!was!estimated!at!US$!135!billion!(B$!270!billion)!in!20113,!of!which!some!US$!25!billion!(19%)!is!outsourced!to!foreign!countries.!The!key!trend!in!BPO!is!that!the!market!is!fast!growing!with!average!annual!growth!rates!of!6.6%!over!recent!years!and!a!rise!in!offshore!outsourcing!(from!only!10%!in!2008!to!19%!in!2011).!The!main!market!segment!is!customer!services!and!sales!which!accounts!for!over!50%!of!total!BPO!services.!

Almost!75%!of!US!and!European!multinational!companies!now!use!BPO!services.!Overall!29%!of!US!and!European!companies!expect!to!increase!their!use!of!BPO!in!the!near!future.!!

India!has!by!far!the!largest!share!of!the!world’s!BPO!with!over!50!per!cent!of!world!exports!and!more!than!245,000!people!employed!in!exporting!BPO.!Ranked!second!is!China!with!an!estimated!14!per!cent!of!exports!followed!closely!by!the!Philippines,!which!has!a!further!12!per!cent!and!over!200,000!employees.!Malaysia!is!the!fourth!largest!supplier!of!BPO!whilst!developed!countries!such!as!Canada!and!Ireland!have!8.5!and!7.5!per!cent!of!global!exports!respectively.!Other,!relatively!new!countries!are!developing!offshore!BPO!industries!including!Eastern!Europe,!Morocco,!Egypt!and!South!Africa.!

The!global!market!for!end!users!of!BPO!is!dominated!by!the!USA!which!represents!59!per!cent!of!the!market.!Europe!follows!with!27!per!cent!and!is!set!to!grow!rapidly!over!the!next!few!years!as!it!catches!up!with!the!US!and!tries!to!become!globally!more!competitive!through!reducing!costs.!

!

!

3!Market!Share!Analysis:!BPO!(2012)!Gartner!

Customer)Services)54%)

Finance/Accounts)23%)

Human)Resource)18%)

Logistics)3%)

KPO)2%)Figure'1:'Global'BPO'Market'

!Progress!Report!


! !

!


!

6!

BPO(((

Table(2:(Principal(BPO(Market(in(2010( Market Market

Share%

USA 59%

Europe 27%

Asia Pacific inc Japan 9%

Other 5%

The!driving!factor!behind!the!development!of!offshore!outsourcing!has!been!the!need!to!cut!costs!

(especially!now!during!the!global!recession)!while!the!enabling!factor!has!been!the!global!electronic!

internet!network!that!allows!digital!data!to!be!accessed!and!delivered!instantly,!from!and!to!almost!

anywhere!in!the!world.!

3.2 The!BPO!Industry!in!Barbados!

Business!process!outsourcing!sector!is!part!of!business!and!finance!services!valued!at!B$!2.3!billion!

and!part!of!export!of!other!business!services!valued!at!B$!750!million.!Data!on!the!BPO!sector!in!

Barbados!is!not!readily!available.!Discussions!with!a!variety!of!associations!and!operators!suggest!

that!there!are!perhaps!around!20!companies!in!Barbados!involved!in!customer!service!call!centres,!

finance!and!accounting!back!office,!insurance!claim!processing!(KPO)!and!pharmacy!prescription!

processing!(KPO).!It!is!also!claimed!that!5,000!persons!are!employed!across!the!sector.!!

Table(3:(Average(wages(and(revenue(per(employee(in(BPO( India Scotland US

Average per agent labour costs per month

US$400 US$ 1,500 US$ 2,000

Labour costs as percentage of total costs

33% 67% 67%

Average revenue per employee US$ 16,000 US$ 24,000 US$ 34,000

Assuming!that!costs!and!revenue!per!employee!equate!to!a!level!between!that!of!Scotland!and!India!

(at!US$20,000!for!both!voice!and!nonevoice!BPO)4!then!the!sector!in!Barbados!could!be!valued!at!

US$!100!million!(B$200!million).!This!indicates!that!BPO!represents!9%!of!the!business!and!finance!

services!group!and!given!it!is!likely!that!the!majority!(if!not!all)!of!BPO!is!export!oriented,!then!BPO!

could!be!around!27%!of!“Other!Business!Services”!exports.!

3.3 BPO!Potential!in!Barbados!

There!is!no!doubt!that!BPO!is!an!important!sector!to!the!services!industry!in!Barbados.!However,!

high!staff!turnover!rates!across!the!industry!(averaging!40%!in!Indian!call!centres),!the!size!of!

Barbados’s!“graduate”!workforce!will!limit!growth.!However,!much!of!Barbados’s!BPO!sector!is!“low!

end”!and!therefore!any!growth!is!likely!to!derive!from!movement!up!the!BPO!value!chain!to!KPO!

activities.!The!global!KPO!market!by!46!per!cent,!from!US$1.2!billion!in!2003!to!US$17!billion!in!2010!

and!there!has!been!a!move!in!some!outsourcing!companies!towards!jobs!for!jobs!for!doctors,!

engineers,!chartered!accountant!and!architects.5!A!move!towards!KPO!has!several!benefits!for!

4!India’s!ITeS!and!BPO!Industry!(2013)!Dunn!and!Bradstreet!5!Knowledge!Process!Outsourcing!(KPO)!Services!(2013)!KPOExperts!

!Progress!Report!


!

BPO(

Barbados!with!lower!staff!turnover!rates,!as!low!as!4%!per!annum,!and!much!higher!revenue!per!employee!at!an!average!US$!55,000.!!

So!for!example,!attracting!an!additional!2,000!KPO!jobs!to!Barbados,!could!generate!around!US$!110!million!(B$220!million)!in!revenue,!contributing!an!additional!2.5%!to!GDP.!

3.4 Challenges!to!be!addressed!

If!selected!as!a!priority!sector,!the!challenges!for!sector!development!will!be!analysed!in!more!detail!within!the!specific!context!of!Barbados.!

The!main!decision!criteria!for!selection!of!offshore!BPO!providers!by!international!clients!are:!!

! Availability!of!qualified!workforce!

! Costs!!

! Information!Communications!Technology!infrastructure!

! Time!Zones!!

! Language!

! Quality!Assurance!!

! Track!record!(Brand!reputation)!

! Confidentiality!

The!types!of!constraint!to!be!addressed!are!discussed!below:!

1. Availability(of(qualified(workforce.!Sufficient!high!level!graduate!and!post!graduates!will!be!required!if!Barbados!is!to!over!up!the!value!chain!to!KPO!services.!The!availability!(numbers!and!qualifications)!of!potential!workers!will!have!to!be!examined!and!any!necessary!policies!put!in!place!to!address!this.!The!universities!and!community!colleges!offer!well!reputed!IT!and!business!programs.!The!current!problem!however,!is!that!“they’re!graduating!a!lot!of!workers,!but!those!workers!don’t!have!the!requisite!experience,”!according!to!KM2!Solutions!(in!Barbados).!“In!our!own!business!we!haven’t!been!that!successful!at!finding!qualified!tech!workers,!and!the!lack!is!not!in!terms!of!education!but!in!terms!of!concrete!IT!work!experience.”!6!

2. Costs:!Costs!are!a!key!criteria!for!any!outsourcing!(it’s!the!main!motivation).!There!needs!to!be!a!significant!cost!difference!between!the!original!and!outsourced!countries!in!wages,!rentals,!communications!and!energy.!Costs!in!Barbados!are!generally!high,!but!this!becomes!less!problematic!as!business!is!sought!higher!up!the!BPO!value!chain.!Nevertheless,!costs!are!still!important!and!need!to!be!investigated!further.!!

3. ICT(infrastructure:!The!quality!of!ICT!infrastructure!available!(reliability!and!bandwidth)!can!severely!affect!competitiveness!in!KPO!provision.!In!addition,!the!availability!of!ICT!equipment!will!also!affect!competitiveness,!as!will!the!servicing!and!maintenance!of!ICT!systems.!Where!equipment!has!to!be!imported!and/or!serviced!by!foreign!providers,!ease!of!entry!to!Barbados!of!service!providers!and!products!(eg!import!duties!treatment)!could!be!a!factor.!

4. Time(Zones:!Neareshoring!(use!of!neighbouring!countries!for!outsourcing)!is!particularly!important!for!KPO!services.!Therefore,!Barbados!has!is!well!suited!for!North!American!markets.!

5. Language:!Again,!language!proficiency!is!important!and!becomes!increasingly!important!as!KPO!services!are!developed.!For!voice!BPO,!accent!is!also!a!key!determinant!(for!example,!US!Indian!accents!have!been!seen!to!be!unacceptable!whereas!Philippines!accent!are!not.!!

6!Caribbean!IT!Talent!Supply:!Can!Dominican!Republic,!Jamaica!and!Barbados!Go!Higher!Value?!(2011)!NearshoreAmericas!

!Progress!Report!


! !!


!

8!

BPO(((

6. Quality(Assurance.!Services!delivery!is!not!“physical”!in!the!sense!of!being!able!to!provide!clients!with!samples,!as!with!a!product.!Therefore,!“quality!assurance”!of!services!becomes!vital!to!provide!clients!with!the!confidence!that!the!services!provided!will!be!consistent!and!of!a!high!standards.!Development!of!industry!standards,!codes!of!practice!and!quality!assurance!schemes!are!areas!to!develop!(this!may!also!include!ethics!and!labour!standards).!

7. Track(record:!Allied!to!quality!is!experience!working!with!other!organisations!to!a!satisfactorily!level.!The!use!of!sector!organisation,!case!studies,!promotion!and!branding!may!be!considered.!!

8. Confidentiality:!One!of!the!most!important!issues!is!to!keep!the!customer’s!data!secure!at!the!providers’!site.!!This!relates!to!both!security!(protecting!information!from!unauthorised!access)!and!disclosure!of!information.!These!issues!can!be!addressed!through!development!of!standards!and!an!enforced!legal!framework.!

!

!

!

!

!Progress!Report!


!

IBC(

4 International*Business*Companies*(IBC)!International! Business! Companies! (IBCs)! are! limited! liability! companies! registered! by! international!corporations! in! tax! efficient! jurisdictions! outside! their! normal! country! of! operation.! The!ownership!and!business!activities,!in!general,!lie!outside!the!country!of!registration!(outside!Barbados).!

4.1 Global!Market!

IBCs!have!grown!in!recent!years!due!in!part,!to!the!growth!of!global!value!chains!that!mean!that!a!

company!based!in!one!country!can!produce!in!one!or!more!other!countries!and!supply!goods!to!a!

third!country!without!ever!involving!its!own!country!of!origin.!Therefore,!for!efficient!legal!tax!

planning,!offshore!companies!provide!an!important!vehicle!to!support!and!manage!these!

international!global!value!chains.!Statistics!on!the!number!of!IBCs!worldwide!and!the!value!of!the!

industry!to!host!countries!globally!are!not!available!as!there!has!been!a!degree!of!secrecy!and!

confidentiality!surrounding!the!sector!in!general.!However,!in!recent!years,!with!the!growth!of!antie

terrorism!financing!and!antiemoney!laundering!initiatives,!greater!regulation!and!transparency!is!

being!introduced!to!the!sector,!especially!through!standards,!guidelines!and!best!practise!issued!by!

the!Organisation!for!Economic!Coeoperation!and!Development!(OECD)!and!the!Financial!Action!Task!

Force!on!Money!Laundering!(FATF).!FATF!issues!a!list!of!"NoneCooperative!Countries!or!Territories"!

(NCCTs),!commonly!called!the!FATF!Blacklist.!The!effect!of!the!FATF!Blacklist!has!been!significant,!

and!arguably!has!proven!more!important!in!international!efforts!against!money!laundering!than!has!

the!FATF!Recommendations.!While,!under!international!law,!the!FATF!Blacklist!has!no!formal!

enforcement!or!sanction,!in!reality,!a!jurisdiction!placed!on!the!FATF!Blacklist!has!often!found!it!

difficult!to!attract!any!legitimate!IBCs!which!has!led!many!OECD!countries!to!place!financial!pressure!

on!these!states.!

The!driving!factors!for!the!sector!are:!

! exemption!from!local!corporate!taxation!and!stamp!duty,!provided!that!the!company!

engages!in!no!local!business!(annual!agent's!fees!and!company!registration!taxes!are!

still!payable,!which!are!normally!a!few!hundred!U.S.!dollars!per!year)!

! preservation!of!confidentiality!of!the!beneficial!owner!of!the!company!

! wide!corporate!powers!to!engage!in!different!businesses!and!activities!

! abrogation!or!restriction!of!the!requirement!to!demonstrate!corporate!benefit!

! the!ability!to!issue!shares!in!either!registered!or!bearer!form!

! an!abrogation!of!any!requirements!to!appoint!local!directors!or!officers!

! provision!for!a!local!registered!agent!

4.2 The!IBC!Industry!in!Barbados!

The!IBC!sector!is!part!of!business!and!finance!services!valued!at!B$!2.3!bn!and!export!of!other!

business!services!B$!750!million.!Data!on!the!IBC!sector!in!Barbados!is!not!readily!available.!

Discussions!with!a!variety!of!associations!and!operators!suggest!that!there!are!approximately!4,000!

IBCs!registered!in!Barbados,!employing!around!3,000!full!time!employees.!The!value!of!this!sector!to!

Barbados!is!determined!by!registration!fees!(US$450!pa),!local!taxes!(sliding!profit!tax!from!2.5e

0.5%),!salaries!to!local!staff!and!agents!as!well!as!other!business!services!provided!to!these!

companies!such!as!banking,!legal!and!audit!and!accounting!services.!If!it!is!assumed!average!1!full!

!Progress!Report!


! !!


!

10!

IBC(((

time!staff!member!of!US$!12,000,!fees!of!US$450!and!other!agent,!legal,!financial!services!of!US$!50,000!per!business!per!annum,!then!the!value!of!the!sector!would!equate!to!US$250!million!(B$500!million)!+!profit!tax!

4.3 IBC!Potential!in!Barbados!

The!size!of!Barbados’s!IBC!sector!is!relatively!small!compared!with!others!in!the!region!such!as!Cayman!and!BVI!(BVI!for!example!has!600,000!IBCs!registered).7!!Therefore,!there!is!scope!to!increase!the!number!of!registrations.!By!targeting!large!“legitimate”!corporations,!a!25%!rise!in!registrations!and!associated!salary!and!business!servicing!revenues!could!for!example,!create!an!additional!750!direct!jobs!Barbados,!could!generate!around!US$!62.5!million!(B$!125!million)!in!revenue!to!GDP.!



The!main!decision!criteria!for!selection!of!IBC!by!international!corporations!are:!!

! Competitiveness!(Tax!rates!and!BDS!costs)!

! International!reputation!!


1. Competitiveness((Tax(rates(and(BDS(costs).!The!“legitimate”!reason!for!establishing!an!IBC!is!founded!in!efficient!tax!planning!to!save!the!business!money!for!its!shareholders.!Therefore,!the!tax!regime!compared!to!global!competitors!(BVI,!Seychelles,!Channel!Islands!etc).!In!addition,!the!quality!and!cost!of!management!agents!and!other!business!development!services!providers!also!affects!competitiveness!of!destinations.!

2. International(reputation:!The!majority!of!business!in!the!IBC!comes!through!referrals!from!source!country!tax!and!business!advisors.!Reputation!as!a!safe,!secure!and!credible!destination!with!internationally!recognised!rigorous!regulation!and!supervision!of!the!sector.!Therefore,!the!legal,!regulatory!and!enforcement!of!international!standards!(especially!those!set!by!FATF,!OECD!and!Global!Forum!on!Transparency!and!Exchange!of!Information!for!Tax!Purposes.!!

!

7!BVI!Offshore!Advantages!(2013)!Fidelity!Corporate!Services!

!Progress!Report!


!

ICT(

5 ICT$Services!The! global! ICT! industry! comprises! computer! hardware,! software,! computer! services! and!communications.!Therefore,! ICT!services! is!a!specific!subset!of! ICT! industry!as!a!whole!and! includes!computer! software! and! computer! services.! Computer! software! includes! the! value! of! purchased! or!leased! packaged! software! such! as! operating! systems,! database! systems,! programming! tools! and!applications.! It! excludes! expenditures! for! internal! software! development! and! outsourced! custom!software!development.! Computer! services:! includes! the! value!of! outsourced! services! –!domestic! or!offshore! –! such! as! IT! consulting,! computer! systems! integration,! outsourced! custom! software!development,! outsourced! web! design,! network! systems,! network! systems! integration,! office!automation,!facilities!management,!web!hosting,!and!data!processing!services.!It!would!not!include!IT!helpdesks!which!would!be!part!of!the!BPO!sector.(

5.1 Global!Market!

The!global!market!for!computer!software!and!services!(excluding!software!embedded!in!devices)!amounted!to!an!estimated!US$1.2!trillion!in!2011,!comprising!844!billion!in!computer!software!and!US$!357!billion!in!computer!services.8!Developed!countries!account!for!the!largest!share!of!the!global!market.!North!America!and!Europe!account!for!80%!of!the!total!market!in!2011!(figure!2).!The!remaining!share!is!mainly!accounted!for!by!Asia,!while!markets!in!the!developing!regions!of!Africa,!Latin!America!and!the!Middle!East!corresponded!to!only!4!per!cent,!well!below!their!share!of!world!GDP!(10!per!cent).!This!suggests!significant!scope!for!market!development!of!the!computer!software!and!IT!services!in!developing!countries.!Growth!is!much!higher!in!these!economies,!growing!by!40%!between!2008!and!2012!compared!to!only!15%!in!North!America.9!!!

Exports!of!computer!and!information!services!amounted!to!US$215!billion!in!2010,!and!have!doubled!since!2005!reflecting!strong!growth!in!outsourcing.!!

In!value!terms,!Ireland!is!the!leading!exporter!with!exports!rising!from!US$7!billion!to!US$37!billion!between!2000!and!2010.!In!Costa!Rica,!India!and!the!Philippines,!computer!and!information!services!account!for!1–2!per!cent!of!GDP.!The!main!developing!country!exporters!!of!computer!and!information!services!among!exporters!are!all!Asian!and!include!India!(15.7%),!China!(4.3%),!the!Philippines!(0.9%)!and!Singapore!(0.8%).! 8!Information!Economy!Report!(2012)!9!European!Information!Technology!Observatory!(EITO)!Survey!(2011)!

Africa)1%)

Middle)East)1%)

Latin)America)2%)AsiaF

PaciGic)16%)

Europe)34%)

North)America)46%)

Figure'2:'ICT'Services'Region'

!Progress!Report!


! !!


!

12!

ICT(((

!

Table(4:(Principal(ICT(Suppliers(Market(in(2011((US$(bn)( Market Value of ICT

Services Export

Market Share%

Ireland 37.2 17.3%

India 33.8 15.7%

Germany 16.0 7.5%

US 13.8 6.4%

UK 10.9 5.0%

China 9.3 4.3%

Total 215.2

The!European!Union,!US!and!Japan!are!the!top!three!importers!while!the!BRIC!countries!are!among!

the!top!ten.!

Current!demand!drivers!of!software!industry!development!include!mobile!communications!and!

social!networking!growth!as!well!as!cloud!computing!and!demand!for!national!content.!The!growth!

of!freelancing!and!crowdsourcing!services!is!also!a!key!future!trend.!

5.2 The!ICT!Industry!in!Barbados!

The!ICT!sector!is!part!of!business!and!finance!services!which!are!valued!at!B$!2.3!billion.!ICT!services!

exports!from!Barbados10!total!B$!22.8!million!and!industry!observers!and!participants!estimate!that!

exports!represent!only!25%!of!the!value!of!the!sector.!Therefore,!it!is!estimated!that!total!sales!of!

ICT!services!in!Barbados!are!B$!91.2!million.11!There!are!approximately!100!firms!in!the!sector,!the!

majority!of!whom!(65%)!are!small,!employing!an!average!of!5!people,!30%!medium!sized!employing!

an!average!of!20!and!5%!large!firms,!employing!an!average!of!40!people.!Therefore!it!is!estimated!

that!around!1,125!persons!are!employed!in!the!sector.!!

The!main!constraints!reported!by!the!sector!are:!

! Lack!of!professional!standards!! Lack!of!legislation!for!data!protection!(improper!and!careless!use!of!data)!! Lack! of! understanding! of! the! sector! amongst! financial! institutions! and! venture!

capitalists!resulting!in!low!levels!of!investment!!

5.3 ICT!Potential!in!Barbados!

Global!markets!for!ICT!services!are!growing!rapidly!and!given!the!relative!success!of!exports!to!date!

and!the!numbers!of!local!ICT!graduates!producing!upwards!of!400+!graduates!per!year!(BCC!100!and!

UWI!300)12!there!is!scope!to!develop!upstream!ICT!services!for!the!global!market.!ICT!jobs!are!higher!

paid!than,!for!example,!BPO!jobs,!reflecting!the!high!revenue!per!employee!potential.!!!

! 10!calculated!from!balance!of!payments!data!by!UNCTAD!(2013)!11!Note!the!Barbados!Association!of!ICT!Professionals!estimated!the!total!value!of!the!sector!in!Barbados!for!B$10!million,!but!this!is!less!than!half!of!official!ICT!Services!exports.!!12! Strategic! Marketing! Plan! for! Professional! Services! Exports! –! Barbados! (2007)! Caribbean! Export/Commonwealth!Secretariat!

!Progress!Report!


!

ICT(

Table(5:(Salaries(and(Income(in(ICT((US$)( Market Average

Salaries Revenue per employee

Ireland 54,000 650,000

India 9,000 55,000

Germany 47,500 209,000

UK 50,386 214,000

Barbados - 40,500

So!for!example,!if!Barbados!could!increase!the!number!of!large!firms!in!the!ICT!sector!by!an!additional!20!firms,!creating!an!additional!800!jobs!and!increase!earnings!per!employee!to!US$!60,000!then!Barbados!could!generate!around!US$!48!million!(B$!96!million)!in!revenue.!



The!main!criteria!for!development!of!a!competitive!ICT!sector!are:!!

! Capacity!of!ICT!Firms!!

! Securing!access!to!relevant!skills!

! Fostering!software!demand!!

! A!modern!legal!framework!!


1. Capacity(of(ICT(Firms:(Encouraging!quality!of!firms!through!certification,!standards!and!certification!schemes.(((

2. Securing(access(to(relevant(skills:(Skills!development!through!the!education!system!and!specialised!institutions!(linking!industry!to!education!provision!to!ensure!supply!meets!demands!of!business)!and!inehouse!training(to!develop!graduates!into!productive!employees.(

3. Fostering(software(demand:(Public!procurement!as!a!tool!to!boost!domestic!demand!and!promoting!greater!ICT!use!in!the!private!sector!will!help!develop!and!broaden!skills!in!the!domestic!market!that!can!then!be!transferred!to!international!markets!(based!on!experience!and!skills)((

4. A(modern(legal(framework:(Intellectual!property!regulation!and!enforcement!and!electronic!transactions!are!some!of!the!legal!frameworks!that!need!to!be!develop!to!support!the!software!sector.!

!

!

!Progress!Report!


! !!


!

14!

Tertiary(Education(((

6 Tertiary(Education(Services!The!World! Bank13! defines! tertiary! education! as! including:! ! universities! as! well! as! institutions! that!teach!specific!capacities!of!higher!learning!such!as!colleges,!technical!training!institutes,!community!colleges,!nursing!schools,!research!laboratories,!centres!of!excellence,!and!distance!learning!centres.!!Within! the! context! of! Barbados,! a! further! subPsector! breakdown! to! include! higher! education!(undergraduate,14! post! graduate! and! research),! technical! vocational! education! and! training!!(including! Beauty,15! ICT,! business! and!management! and! hospitality,! tourism! and! catering),! English!Language!Training!(ELT)!and!Professional!Qualifications!(such!as!Accounting,16!Nursing!training17!and!Medical).!

6.1 Global!Market!

TERTIARY!EDUCATION!SECTOR!

The!global!market18!for!education!exports!is!estimated!at!over!US$40!bn.!An!estimated!3!million!students!study!full!time!higher!education!outside!their!home!countries!(this!excludes!exchange!students)!with!an!estimated!value!of!US$30!bn.!In!addition,!over!1.3!million!students!travel!to!study!English!as!a!foreign!language!with!an!estimated!market!value!of!US$!10!billion.19!There!is!also!a!growing!market!for!travel!for!technical!and!vocational!education!and!professional!education!(such!as!nursing!and!accounting)!although!no!figures!are!readily!available!for!these!segments.!

HIGHER!EDUCATION!

Of!the!US$!30!billion!market!for!higher!education!services!export,!the!top!destination!remains!the!EU!(with!UK,!Germany!and!France!alone!32%)!accounting!for!about!one!third!and!US,!accounting!for!just!less!than!one!quarter!(22%)!of!the!market!!

Table(6:(Global(Higher(Education(Destinations((Top Host Destinations Global Market Share

United States 22%

United Kingdom 12%

Germany 10%

France 10%

Australia 7%

China 6%

Japan 5%

13!http://web.worldbank.org/WBSITE/EXTERNAL/TOPICS/EXTEDUCATION/0,,contentMDK:20298183~menuPK:617592~pagePK:148956~piPK:216618~theSitePK:282386,00.html#what_why!14!Excludes!medical!and!nursing!qualifications!that!would!be!recognized!for!practice!nationally!or!internationally!15! Excludes,! in! the! context! of! Barbados! training! in! massage! and! alternative! therapies! such! as! Reiki.! Although! strictly!speaking!these!would!fall!into!this!or!“other!education!services”!categories,!it!is!more!relevant!from!a!policy!perspective!to!include!it!in!any!survey!of!the!wellness!sector!as!any!policy!decision!to!promote!wellness!would!include!wellness!skills!and!training.!16!This!would!not!include!degrees!but!would!comprise!professional!qualifications!such!as!Association!of!Chartered!Certified!Accountants!(ACCA)!17!This!would!include!degrees!and!associate!degrees!required!for!international!or!national!registrations!18!OECD,!Education!at!a!Glance,!2007!19!Language!Travel!Magazine!(2011)!

!Progress!Report!


!

Education(Services(

Canada 3%

Other 25%

Total 100%

Source:(OECD,(Education(at(a(glance,(2007(

The!number!of!students!studying!abroad!is!rising!at!over!15%!per!annum!and!the!places!available!in!

the!traditional!global!education!destinations!(US,!UK,!Germany,!France!and!Australia)!are!declining!

and!visas!are!ever!more!difficult!to!obtain,!even!for!genuine!students.!Therefore,!there!is!an!

increasing!opportunity!for!new!destinations!to!emerge!and!attract!these!students.!

ENGLISH!LANGUAGE!TRAINING!

The!global!market!for!ELT!is!estimated!at!US$!10!billion!per!year.!More!than!twoethirds!of!ELT!

students!travelling!for!study!originate!from!Asia!(China,!Korea,!Japan!and!Taiwan).!Following!Asia,!

Europe!(Russia!and!Italy)!and!Latin!America!(Brazil)!represent!significant!markets!for!ELT.!!

The!UK!is!the!largest!exporter!of!ELT!representing!over!50%!of!the!global!market!followed!by!US,!

Canada,!Australia!and!Ireland.!

Table(7:(Global(ELT(Destinations(Top Host Destinations Global Market Share

United Kingdom 54%

United States 16%

Canada 13%

Australia 8%

Ireland 6%

New Zealand 2%

Malta 1%

South Africa <1%

Total 100%

Source:(Language(Travel(Magazine((2010)(

The!British!Council!has!undertaken!research!into!global!markets!for!ELT,!including!those!taking!ELT!in!

their!home!country!as!well!as!travelling!for!ELT.!Over!the!next!10!years,!it!estimates!the!increase!in!

market!demand!for!ELT!at!over!45!million!students!per!year!comprising!China!22!million,!India!16!

million,!Russia!4!million,!Brazil!3!million!and!Poland!2!million.!If!only!5%!of!these!elect!to!travel!for!

ELT,!then!an!additional!2.25!million!ELT!students!will!be!looking!for!destinations!around!the!world!

with!the!ELT!export!market!tripling!over!this!period.!!

TVET!

A!growing!number!of!firms!and!students!are!electing!to!undertake!vocational!and!technical!training!

overseas!to!obtain!better!skills!and!qualifications,!especially!where!these!are!not!available!locally.!

This!is!an!extremely!new!segment!and!market!research!has!not!been!undertaken!specifically!on!this!

segment.!However,!anecdotally!evidence!shows!that!there!is!potential!(often!combined!with!ELT).!

The!government!of!Germany,!for!example,!has!been!actively!promoting!its!technical!training!service!

providers!through!events!in!its!embassies!throughout!the!world!including!in!US,!India,!UK!and!China.!!

!Progress!Report!


! !!


!

16!


PROFESSIONAL!QUALIFICATIONS!TRAINING!

The!global!demand!for!professional!qualifications!is!being!fuelled!by!the!acceptance!and!recognition!of!certain!qualifications!through!mutual!recognition!agreements!and.!Professional!qualifications!training!cuts!across!both!higher!education!and!TVET.!For!example,!global!standards!and!norms!in!professions!such!as!accounting!means!that!if!an!accountant!is!qualified!in!ACCA,!it!does!not!matter!where!the!student!studies,!the!qualification!is!recognised!and!accepted!throughout!the!world.!!

Shortage!of!places!and!demand!for!subsequent!entry!by!the!student!to!third!countries!to!work!also!drives!demand!for!professional!qualifications.!For!example,!studying!medical!and!nursing!training!abroad!is!now!an!established!segment!as,!for!example,!for!every!one!place!available!at!medical!schools!in!the!US,!there!are!4!American!students!with!the!required!qualifications!competition!for!each!place.!Added!to!this!shortage!of!training!places,!there!are!global!shortages!of!medical!staff!throughout!the!world!which!is!predicted!to!continue.!A!final!driver!is!third!country!students!studying!for!professional!qualifications!to!of!a!particular!country!(eg!US)!as!a!means!to!access!and!work!in!this!country.!For!example,!In!Antigua,!there!is!a!medical!school!providing!training!in!USMLE1!(entry!level!qualification!to!residency!in!US!hospitals)!with!2,000!students!of!only!Indian!origin.!

6.2 The!Tertiary!Education!Sector!in!Barbados!

The!tertiary!education!sector!in!Barbados!(direct!income!from!fees!and!subventions)!is!part!of!personal!services!category!valued!at!B$!292!million,!of!which!B$!800,000!is!export!of!personal!services!(other!personal!services!include!private!health,!amongst!other!services).!In!addition,!for!foreign!students,!the!revenues!attributed!to!provision!of!tertiary!education!will!also!be!part!of!the!travel!(expenditure!by!foreign!parties!in!Barbados)!valued!at!B$!1.4!billion.!Data!on!the!tertiary!education!sector!in!Barbados!is!not!readily!available!and!there!is!limited!sector!organisation.!Therefore,!there!are!no!estimates!readily!available!(especially!given!the!level!of!training!in!small!private!facilities!for!TVET).!However,!discussions!with!a!variety!of!institutions,!regulators!and!Ministries!suggest!that!there!are!a!large!number!of!operators!(in!excess!of!100)!and!a!degree!of!exports!already.!In!addition,!there!appears!to!be!large!capacity!available!with!for!example!a!relatively!new!ELT!building!at!BCC!with!capacity!for!1,000!students!and!currently!only!100!students!enrolled.!There!are!also!some!private!ELT!schools!operating!in!Barbados.!

!Based!on!estimates!from!the!larger!education!institutions!(BIMAP,!BCC,!UWI!and!poly)!Barbados!already!attracts!around!4,000!foreign!students!per!year!(mostly!from!other!Caribbean!islands).!Based!on!an!assumption!of!fee!of!US$!2,000!(across!long!and!short!term!courses),!then!fees!from!foreign!students!to!education!institutions!would!amount!to!US$!8!million!or!B$!16!million!(this!is!20!times!the!official!B$!0.8!million!in!the!statistics!for!export!of!all!personal!services!indicating!either!the!estimates!of!foreign!students!is!wrong!or,!more!likely,!the!BoP!statistics!are!wrong!and!some!of!these!fees!are!in!“other!business!services!exports”).!In!addition,!assuming!spend!per!annum!in!the!wider!economy!is!US$!15,000,!and!an!average!stage!of!students!of!6!months,!the!revenues!from!foreign!students!could!amount!to!US$!30!million!(B$60!million)!making!the!total!value!of!the!sector!B$!76!million.!

!Progress!Report!


!

Education(Services(

6.3 Potential!for!Tertiary!Education!business!in!Barbados!

Barbados’s!economy!will!generate!revenue!not!only!from!tuition!fees!but!also!(and!probably!more!importantly)!from!living!expenses.!Whereas!a!mainstream!tourist!stays!two!weeks,!an!education!tourist!stays!for!one!month!to!one!year!(or!more)!spending!every!day.!!

For!higher!education!and!professional!qualifications!training,!the!annual!average!level!of!spending!and!contribution!to!the!economy!differs!by!exporting!country,!origin!of!the!foreign!student!and!length!of!course.!!In!South!Africa,!the!average!spending!per!graduate!student!is!US$7,500!pa!whereas!in!Antigua,!US!medical!students!average!spending!(including!fees)!amounts!to!US$!25,000.!!Therefore,!in!Higher!Education!and!Professional!Qualifications!Training,!attracting!mainly!noneCaribbean!students!of!an!additional!2,000!per!annum,!would!generate!US$!50!million!(B$!100!million)!revenues!based!on!annual!spend!on!fees!and!living!expenses!of!US$!25,000!per!student!per!annum.!!

English!Language!Training!(ELT)!and!Technical!and!Vocational!Education!and!Training!(TVE)!generally!comprise!shorter!stays!ranging!from!6e12!weeks.!Again!weekly!spend!and!fees!differ!by!country:!

Table(8:(Average(spend(and(Stay(for(Foreign(ELT(Students(Top Host Destinations Spend per week (excl.

fees) US$

Average Fee per Week US$

Length of Stay Weeks

United Kingdom 594 405 6

Ireland 546 373 6

United States 330 309 13

Canada 518 237 15

Australia 368 234 17

South Africa 390 149 9

Source:(Language(Travel(Magazine((2009)(

If!Barbados!simply!matched!South!Africa,!then!average!ELT!students!may!generate!up!to!US$!5,000!to!the!economy!(fees!and!spend).!In!is!estimated!that!similar!revenues!(if!not!higher)!could!be!gained!from!TVET.!Therefore!attracting!20,000!TVET!and!ELT!students!per!annum!(averaging!9!weeks!stay!each,!that!is!5,000!full!time!equivalent)!could!generate!an!additional!US$!100!million!(B$!200!million)!to!the!economy.!

Combined,!tertiary!education!services!in!Barbados!could!generate!an!additional!US$!150!million!(B$!300!million)!in!revenue,!adding!4%!to!GDP.!


If!selected!as!a!priority!sector,!the!challenges!for!sector!development!will!be!analysed!in!more!detail!within!the!specific!context!of!Barbados.!!

The!main!decision!criteria!for!selection!of!foreign!students!travelling!for!education!are:!!

! Quality!of!education!!

! Costs!

! Ease!of!entry!

!Progress!Report!


! !!


!

18!


! Life!experience!!

! Safety/security!


1. Quality(of(education:!!For!all!tertiary!education!services,!the!key!criteria!that!students!assess!a!destination!on!is!the!quality!of!education.!Quality!is!measured!by!students!in!terms!of!portability!of!!the!qualification!(the!qualification!is!internationally!recognized!in!either!the!home!country!of!a!third!country!where!the!student!wants!to!work)!and!pass!rates.!!

2. Costs:!the!cost!of!courses!in!terms!of!fees!and!living!costs!are!important!decision!criteria.!This!determines!the!value!for!money!for!the!same!qualifications!available!elsewhere.!

3. Ease(of(entry:!!how!easy!it!is!for!the!student!to!apply,!the!availability!of!the!course!the!want!and!facilitation!support!in!obtaining!work!permits,!accommodation!and!general!information!and!confidence!on!living!in!an!unfamiliar!country.!!

4. !Life(experience:!increasing!in!a!competitive!workplace,!students!are!looking!to!differentiate!themselves!from!the!competition.!Therefore,!studying!abroad!can!provide!a!new!dimension!and!saleability!in!the!job!market!post!qualification.!There!is!scope!to!link!education!with!these!other!experiences,!adding!value!through!alternative!experiences!(work!experience,!leisure!experience!and!volunteering).!For!ELT,!often!the!lure!of!learning!combined!with!vacation!or!vocational/academic!learning!can!be!key!drivers.!

5. Safety/security:!especially!in!higher!education,!the!safety!and!security!of!both!the!campus!and!country!are!a!final!consideration!–!this!is!both!actual!and!perceived!reputation!of!the!country!in!the!country!of!origin.!Where!the!actual!country!is!not!well!known,!it!could!be!adversely!associated!with!others!(eg!Barbados!with!Jamaica!would!be!a!reputation!to!dispel)!

!

!

!Progress!Report!


!

Professional(Services(

7 Construction*Related*Professional+Services!Professional!services!within!the!context!of!this!report!refer!to!construction!related!services!that!are!provided! by! firms,! practises! and! consultancies! that! require! a! professional! membership! and/or!qualifications.!These!include!architecture,!engineering,!project!management,!planning!and!surveying!services.! Other! professional! services! such! as! accounting,! other! engineering,! management!consultancy! and! legal! services! will! form! part! of! “Business! Support! Services”! in! section! 10! of! this!report.!

7.1 Global!Market!

The!global!market!for!construction!related!professional!services!is!estimated!at!US$!1.7!trillion!(construction!related!professional!services!are!approximately!20%!of!global!construction!market,!currently!estimated!to!be!US$!8.5!trillion)20.!Professional!services!in!the!EU!account!for!21%!of!construction!costs!so!to!approximate!any!national!market!for!construction!related!services,!it!could!be!reasonable!to!calculate!20%!of!construction!sales.!

Civil!engineering!services!represent!90%!of!the!global!market,!valued!at!US$!1,530!billion,!with!surveying!US$!102!billion,!architecture!US$!51!billion!and!planning!and!management!US$!17!billion.!However,!it!reported!that!in!engineering!services,!only!US$!31!bn!(or!2!per!cent)!is!sourced!offshore.!

Asia!is!the!largest!market!for!construction!related!professional!services,!accounting!for!40%,!followed!by!Europe!accounting!for!a!further!20%.!This!represents!a!significant!change!in!construction!spending!away!from!traditional!development!markets!to!developing!and!emerging!countries).!

Table(9:(Share(of(Global(Construction(Services(Industries((construction(and(professional(services)( Share of Market (2004) Share of Market (2014P)

Europe 32% 20%

Asia 30% 40%

North America 11% 9%

Middle East 10% 16%

Latin America 9% 7%

Africa 8% 8%

Source: UNCTAD (2010) and Business Monitor International (2013)

20!Global!Infrastructure!&!Construction!Themes!for!2013!and!Beyond!(2013)!Business!Monitor!International!

Architectural)Services)3%)

Engineering)Services)90%)

Surveying)Services)6%)

Planning)Services)1%)

Figure'3:'Global'market'for'Professional'Services'

!Progress!Report!


! !!


!

20!

Professional(services(((

This!trend!reflects!the!changes!in!growth!rates!in!recent!years!where!growth!in!construction!services!in!developing!countries!has!averaged!8%!per!annum!compared!with!only!2%!in!Europe.!This!trend!is!likely!to!continue.!

Public!procurement!is!the!biggest!driver!for!construction!markets,!especially!in!developing!and!emerging!markets!and!on!average,!global!spending!by!governments!on!infrastructure!development!is!estimated!to!average!between!5e7%!of!GDP.21!However,!in!Africa,!for!example,!infrastructure!spending!averages!15%!of!GDP.!

7.2 The!Construction!Related!Professional!Services!Industry!in!Barbados!

Construction!related!professional!services!form!part!of!business!and!finance!services!valued!at!B$!2.3!billion!and!part!of!export!of!other!business!services!valued!at!B$!750!million.!Data!on!the!professional!services!sector!in!Barbados!is!not!readily!available.!Based!on!global!norm!that!construction!related!professional!services!are!valued!at!approximately!20%!of!construction!sector,!this!would!mean!that!in!Barbados,!the!sector!was!valued!at!B$!37million.!However,!this!is!far!higher!than!industry!estimates22!of!B$!21!million!comprising!B$!6!million!in!civil!engineering,!B$!10!million!architecture!and!B$5!million.!This!may!be!a!combination!of!factors!(under!estimation!by!in!particular!engineers!and!use!of!“imported”!professionals).!Exports!of!services!are!reported!at!10%!or!B$!3.7!million!across!the!industry.!

There!are!approximately!30!firms!in!the!engineering!sector,!90%!locally!owned!with!6!large!firms,!10!medium!firms!employing!an!average!of!5!persons!and!the!rest!small!firms!employing!1e2!specialists.!There!are!93!registered!architects!in!Barbados!with!a!few!large!firm!employing!25!persons!(architects!and!draftsman)!but!the!majority!of!firms!are!small!employing,!on!average,!4!people.!Information!on!other!professionals!was!not!available!at!the!time!of!this!research.!

7.3 Potential!for!Professional!Services!in!Barbados!

The!vast!majority!of!construction!related!work!and!services!is!awarded!through!public!tenders.!In!Europe!and!US,!these!are!not!open!to!third!countries!unless!that!country!has!signed!the!WTO!General!Procurement!Agreement!(Barbados!is!not!a!member).!However,!under!the!EPA,!Cariforum!professionals!can!in!theory,!access!the!EU!market.!However,!in!practise,!given!the!size!of!firms,!it!is!likely!that!access!would!only!be!available!through!cooperation!with!EU!firms.!

All!international!aid!contracts!are!subject!to!international!open!tendering!procedures!which!would!allow!direct!bidding!for!these!services.!Moreover,!pressure!from!the!international!community!on!governments!throughout!the!world!has!seen!the!gradual!opening!of!all!public!procurement!to!international!competition!and!the!reduction!of!local!price!preferences!(a!usual!barrier!to!participation!for!foreign!firms).!Therefore,!opportunities!in!growth!markets!such!as!Latin!America!and!Africa!could!see!opportunities!for!Barbados!professionals.!

Exporting!of!such!services!depends!upon!networking,!partnerships!and!participating!in!public!procurement!for!both!donor!and!national!government!contracts!in!foreign!markets.!!Given!that!the!majority!of!firms!are!small,!the!average!contract!(or!subecontract)!for!exports!is!likely!to!be!relatively!

21!UNCTAD!(2007)!22!Discussions!with!a!engineering,!surveyors!and!architecture!associations!

!Progress!Report!


!

Professional(Services(

small!at!around!US$!250,000!per!annum.!Say!20!contracts!per!year!across!the!different!construction!related!professionals!could!generate!around!US$!5!million!(B$!10!million)!in!revenue.!



The!main!decision!criteria!for!selection!of!construction!related!professional!by! international!clients!(governments,!development!banks!and!private!clients)!are:!!

! Qualifications!

! Liability!and!professional!indemnity!insurance!

! Capacity!and!experience!


1. Qualifications:!Recognised!qualifications!and!memberships!of!internationally!recognised!professional!bodies!are!a!prerequisite!to!participation!in!international!tenders.!Therefore,!affiliation!and!membership!by!national!bodies!of!internationally!recognised!organisations,!plus!mutual!recognition!agreements!are!key!areas!to!explore.!

2. Liability(and(professional(indemnity(insurance:!Professional!insurance!is!often!a!requirement!of!contracts!and!even!if!not,!the!willingness!of!an!insurance!company!to!insure!a!professional!provides!confidence!in!clients!as!to!the!abilities!of!the!firm.!

3. Capacity(and(experience:!firm!size!is!a!major!constraint!to!international!tenders!which!often!require!asset!base!and!turnover!requirements.!In!addition,!on!taking!on!larger!assignments,!a!larger!and!diversified!(including!all!professions)!practice!may!find!it!easier!to!compete!internationally.!Therefore!partnerships!established!across!firms!for!export!only!business!may!be!an!option!to!pool!skills!and!resources!for!export!markets.!!

!

!

!

!Progress!Report!


! !!


!

22!

Creative(Industries(((

8 Creative(Industries!The! scope! of! creative! industries! covers! sound! recording! and! distribution! (calypso,! reggae,! soca,!modern! pop! etc),! film! locations,! film! production! (including! animation),! live! performance! (theatre,!dance,!music,!pan!and!carnival),!fashion!(design!of!clothing,!jewellery!and!accessories)!and!artists.!!!!

8.1 Global!Market!

The!market!for!the!creative!industries!services!(music,!film!and!live!performance)!is!estimated!at!over!US$!800!billion.!The!vast!majority!of!this!is!comprised!US$!650!billion!for!events,!meetings!and!festivals23!(with!the!UK!alone!estimated!at!US$!36!bn!and!even!emerging!markets!such!as!India!valued!at!US$!450!million!and!rising!by!24%!per!annum).!The!film!industry!is!valued!at!US$!84.2!billion24!and!comprising!distribution!sales,!production!and!editing.!Music!industry!is!valued!at!US$!62.8!billion25!comprising!US$!24.0!billion!(digital!and!retail!sales),!publishing!royalties!US$!7.7!billion,!synchronisation!licensing!fees!(music!for!films!and!compilations)!US$!1.1!billion!and!live!music!performances!US$!20.0!billion.!

Increasingly,!live!events!and!festivals!are!being!organised!through!event!management!companies.!Event!management!is!“the!application!of!project!management!to!the!creation!and!development!of!festivals,!events!and!conferences.”!!

Event!Management!is!a!multiebillion!dollar!industry,!growing!rapidly,!with!mega!shows!and!events!hosted!regularly.!Surprisingly,!there!is!no!little!research!conducted!to!assess!the!size!and!growth!of!this!industry.!Increasingly,!event!management!companies!are!joining!international!networks!to!work!together!(similar!to!advertising!agencies).!In!the!UK,!one!online!web!directory!lists!over!700!event!management!companies.!!!

8.2 Creative!Industries!in!Barbados!

The!creative!industries!sector!cuts!across!the!services!sector!comprising!personal!services,!business!and!finance,!royalties,!leisure!and!retail.!Data!on!the!creative!industry!sector!in!Barbados!is!not!readily!available!but!there!examples!of!artists!selling!music!over!the!internet!and!performing!worldwide.!However,!the!majority!of!this!is!aimed!at!diaspora!events!(both!Barbadian!and!wider!

23!Meetings!and!Events!Market!(2012)!Travel!Management!Institute!24!Global!Media!and!Entertainment!Outlook!2011e2015!(2010)!PWC!25!World!Music!and!the!Global!Music! Industry:!Flows,!Corporations!and!Networks! (2012)!Dave!Laing! Institute!of!Popular!Music,!University!of!Liverpool!

Events)and)

Festivals)81%)

Music)8%)

Film)11%)

Figure'4:'Global'Market'for'Creative'Industries'

Inception!Report!


!

Creative(Industries(

Caribbean!diaspora).!In!addition,!there!are!also!over!200!galleries!in!Barbados!selling!art,!primarily!to!tourists.!!

8.3 Creative!Industries!Potential!in!Barbados!

Film!and!music!sales!are!unlikely!to!generate!huge!sales!worldwide!and!profits!and!would!cost!much!in!promotion.!However,!there!would!be!potential!in!exploiting!digital!distribution!more!effectively!and!then!promoting!links!to!downloads.!!Film!and!music!production,!processing!and!editing!is!unlikely!to!become!an!industry!in!itself,!although!individual!studios!may!be!able!to!develop!niche!markets!but!this!will!be!based!on!individuals,!rather!than!a!serious!sector.!

However,!there!is!greater!potential!for!creative!performers!to!export!their!services!to!festivals,!and!events!worldwide!beyond!the!diaspora.!The!UNESCO!project!in!Barbados!has!shown!that!there!is,!for!example,!interest!in!North!America!for!Bajan!performers!who!are!performing!on!the!college!circuit.!However,!this!is!not!commercially!viable!without!UNESCO!grant!finance!so!a!more!professional!approach!to!higher!value!market!segments!is!required.!The!Caribbean!Creative!Cluster!(which!has!50%!Bajan!performers)!has!been!a!success!in!regional!and!diaspora!events!with!3!full!time!marketing!and!promotional!staff!and!over!100!artists!on!their!books!–!they!act!as!a!export!agent.!Similar!models!could!be!developed!aimed!at!supplying!event!management!companies!worldwide.!If!100!performers!from!Barbados!were!able!to!get!contracts!worth!US$!50,000!per!year,!then!exports!would!rise!by!US$!5!m!(B$!10!million).!



The!main!decision!criteria!for!selection!of!event!management!and!agents!are:!!

! Quality!of!performer!

! Access!to!performers!


1. Quality(of(performers.!This!does!not!only!include!the!professionalism!of!performance,!but!also!professionalism!in!business!aspects!(dealing!with!clients,!touting!for!business,!contract!negotiations,!and!reliability/timing).!

2. Access(to(performers:!A!major!issue!for!potential!clients!such!as!agents!and!event!managers!is!knowing!about!the!performers!in!the!first!place.!Therefore,!exposure!to!networks!of!event!management!organisations!is!key!so!when!a!certain!type!of!performer!is!required,!they!can!directly!access!them.!

!

!Progress!Report!


! !!


!

24!

Health(and(Wellness(((

9 Health'and'Wellness!Tourism!The Health and Wellness sector covers mainstream medical tourism (people travelling overseas for medical treatments, including elective surgery, cosmetic surgery, dentistry etc), Spa and wellness (including pamper spa and wellness retreats), Rehabilitation (including Orthopaedic, additive conditions and brain rehabilitation), Palliative care (for on-going conditions) and assisted living (mainly geriatric).

9.1 Global!Market!

The!global!health!and!wellness!tourism!sector!is!valued!over!US$!100!billion!comprising!medical!tourism!valued!at!US$!40!billion,!wellness!and!spa!at!US$!44.8!billion,!medical!rehabilitation!ay!US$!4!billion,!palliative!care!less!than!US$!1!billion!and!assisted!living!US$!1!billion.!

MEDICAL!SECTOR!

According!to!estimates!of!Tourism!Research!and!Marketing!(TRAM),!the!global!value!of!medical!tourism!in!2010!was!over!US$!40!billion.!!

The!most!dominant!market!segments!are:!complex!specialized!surgeries!such!as!joint!replacement!(knee/hip);!cardiac!surgery;!dental!surgery!and;!cosmetic!surgeries.!!

Many!developing!countries!are!already!benefiting!from!this!new!type!of!tourism,!especially!in!Asia!where!Singapore!and!Thailand!are!estimated!to!receive!around!US$!900!million!per!annum!from!medical!tourism!with!India!and!Malaysia!growing!quickly!with!earnings!of!US$!333!million!and!US$!400!million!respectively.!!

Table(10:(Main(Sources(of(Medical(Tourists(Country Number of Medical Tourists Principle Destinations

Germany 500,000 (2007) Thailand, India, Turkey, Poland.

US 400,000 (2006) Costa Rica, Mexico, Thailand, Philippines and India

Middle East 350,000 (2007) India, Singapore, Thailand, United Kingdom, Turkey

Canada 230,000 (2007) Cuba, Costa Rica, Hungary, India, Israel, Jordan, Lithuania, Malaysia, Thailand, Belgium, Poland and Singapore

UK 100,000 (2007) India, Hungary, Turkey, Germany, Malaysia, Poland and Spain

With!current!costs!of!healthcare!in!home!countries!of!most!medical!tourists!growing,!it!is!expected!that!the!number!of!medical!tourists!from!Europe,!North!America!and!the!Middle!East!will!grow!

Medical)Tourism)39%)

Spa)39%)

Wellness)6%)

Rehabilitation)10%)

Assited)living)5%)

palliative)care)1%)

Figure'5:Health'and'Wellness'Tourism'

Progress!Report!


!

Health(and(Wellness(

significantly!over!coming!years.!Similarly,!the!number!of!“overseas”!purpose!built!facilities!is!also!expected!to!grow!with!this!demand.!!

In!the!US,!emerging!policies!and!trends!are!fuelling!the!demand!for!medical!tourism:!

! US!Healthcare!reform!act!has!added!millions!of!Americans!to!the!Medicaid!program,!which!does!not!cover!the!true!cost!of!care!

! Increased!demand!for!outpatient!surgery!(75%!of!all!medical!tourism!treatments)!

! Increased!access!to!low!cost!travel!

! Shortage!of!physicians!and!primary!care!workers!in!the!US!

! Millions!of!baby!boomers!will!be!turning!65!in!the!near!future,!qualifying!for!Medicare!!

! Increase!in!numbers!of!Americans!with!chronic!diseases!

! Governments!of!host!countries!setting!up!initiatives!such!as!fast!track!visa!and!tax!breaks!

! Medical!inflation!at!3.6%!outstrips!retail!inflation!of!2.1%!in!the!USA!!

The!key!to!attracting!foreign,!and!especially!US,!medical!tourists!is!JCI!accreditation.!There!are!currently!more!than!255!Joint!Commissioneaccredited!hospitals!outside!the!USA,!this!is!the!same!accreditation!that!more!than!4,800!hospitals!in!the!US!receive!and!the!same!accreditation!that!Medicare!recognises.!According!to!JCI!surveys,!patient!experience!and!satisfaction!at!JCI!hospitals!abroad!is!generally!more!favourable!than!the!USA;!surgical!complication!rates!!compare!favourably!and;!cost!savings!on!most!surgical!procedures!can!exceed!50e80%!of!the!US!cost.!

With!these!factors!in!mind,!US!corporations!and!medical!insurers!are!increasingly!funding!medical!tourism.!Some!medical!insurance!companies!have!explicitly!added!international!travel!options!as!“extras”!for!any!nonecovered!services!and!preeexisting!conditions.!!

SPAS!AND!WELLNESS!

In!2007,!the!global!market!for!spas!was!valued!at!US!$46.8!billion26!from!an!estimated!71,762!spas!operating!around!the!world.!The!global!wellness!tourism!market,!comprises!1,485!destination!resorts!and!is!estimated!to!be!valued!at!US$!6.2!billion!and!employs!around!112,000!persons.!These!destination!spas!account!for!13!per!cent!of!revenues!from!2!per!cent!of!facilities!indicating!this!is,!with!medical!spas,!a!high!value!segment.!

Latin!AmericaeCaribbean!is!the!fourth!largest!spa!region!in!the!world,!but!its!industry!is!significantly!smaller!than!those!of!the!top!three!regions!(Europe,!North!America,!and!AsiaePacific).!It!had!an!estimated!5,435!spas,!with!revenues!of!$2.5!billion!and!employment!of!82,694!persons!in!2007.!

Health!and!wellness!tourism!is!now!an!international!trend!set!by!the!health!conscious!consumers!seeking!to!enhance!their!well!being!through!their!travel!experiences!(Still!Pampering?!Opportunities!and!Challenges!Facing!the!Global!Spa!and!Beauty!Industry!Euromonitor!International!Ltd!Date:!Apr,!2010).!Wellness!tourism!means!travelling!across!borders!for!spa!and!wellness!treatments.!The!focus!of!wellness!tourism!is!on!prevention!and!helping!people!facilitate!lifestyle!changes.!The! 26!Global!Spa!Summit!2010!(SRI!International)!

!Progress!Report!


! !

!


!

26!


opportunities!for!development!are!enormous!as!wellness!tourists!seek!out!“mindful”!and!not!

“mindless”!travel!opportunities,!with!a!higher!benefit!to!themselves,!their!bodies!and!their!

environment.!

This!type!of!consumer!seeks!to!look!and!feel!better,!to!lose!weight,!to!slow!the!effects!of!aging,!to!

relieve!pain!or!discomfort,!to!manage!stress,!or!to!partake!in!the!use!of!natural!supplements!like!

vitamins!and!minerals!to!improve!their!health.!A!distinction!is!made!between!the!health!and!the!

wellness!aspects.!Health!tourism!refers!to!those!clients!with!medical!conditions!who!would!travel!to!

experience!healing!therapies.!A!person!who!seeks!a!wellness!travel!experience,!is!generally!healthy!

to!start!with,!and!seeks!therapies!to!maintain!his!or!her!well!being.!!

The!top!trends!in!wellness!tourism!are:!

o Prevention,!rather!than!pampering!!

o Spa!Goes!are!seeking!“!Tradition!and!Authenticity”,!for!example!the!Turkish!Haman!

o Integrated!human!body!vision!with!holistic!treatments!–!“Pure!Spa”!concept!in!

decline!

o “!SilvereSpaeing”!78!million!baby!boomers!set!to!hit!60!

o Sanctuary!–!from!our!ever!increasing!stressful!technological!world!

o International!Spa!Tours!will!replace!Spa!treatments!e!Guests!wish!to!enjoy!a!

“package”!of!treatments!rather!than!“!a!massage”!

REHABILITATION!!

Rehabilitation!centres!are!driven!by!costs!and!specialisms.!For!some!centres,!people!travel!for!

cheaper!rehabilitation!after,!for!example!spinal!injury!(learning!to!walk)!or!strokes,!whilst!others!

attract!foreign!medical!tourists!due!to!some!unique!specialism!or!rehabilitation!processes!that!are!

not!readily!available!in!their!countries,!these!could!include!sports!medicine!or!drug!rehabilitation!

(Eric!Clapton’s!Crossroads!Centre!in!Antigua).!

With!the!growing!acceptance!of!medical!tourism,!people!who!need!specialist!rehabilitation!

treatment!after!an!illness!or!surgery!are!considering!treatment!abroad!as!a!low!cost!option.!

Rehabilitation!is!the!term!used!to!describe!the!process!of!physically!restoring!to!health!sick,!injured!

or!disabled!people.!Various!types!of!treatment!are!available,!including:!Orthopaedic!rehabilitation,!

Drug!and!Alcohol!rehabilitation!and!Brain!Injury!rehabilitation.!

ASSISTED!LIVING/GERIATRIC!CARE!

There!is!globally!a!market!for!providing!assisted!living/nursing!and!geriatric!care!for!the!elderly!

which!is!international.!The!motivation!for!obtaining!such!services!outside!your!country!of!origin!is!

climate,!cost!and!returning!to!roots!(Diaspora).!The!services!provided!can!range!from!retirement!

villages!to!full!nursing!care!facilities.!!

Investors!throughout!the!world!are!increasingly!taking!stock!of!this!rising!demand!and!are!making!

serious!investments!in!the!retirement!care!industry.!The!United!States!market!is!the!largest!globally!

and!is!constantly!expanding.!The!US!Census!Bureau!estimates!that!the!national!nursing!and!

Progress!Report!


!

Health(and(Wellness(

residential!care!industry!is!worth!over!US$!26!billion!a!year.!As!an!indication!of!the!industry's!growth!potential,!in!2004!the!National!Investment!centre!also!estimated!that!a!total!of!33,000!professionally!managed!properties!existed!in!the!United!States,!with!a!capacity!to!hold!over!3.6!million!seniors,!a!figure!which!represents!less!than!5%!of!the!potential!US!target!market.!A!large!proportion!of!the!major!retirement!care!communities!are!geographically!concentrated!around!the!Southern!United!States!and!the!Caribbean.!This!is!largely!due!to!the!affluence!of!the!US!population!of!retirees!as!well!as!the!yeareround!favourable!climate!that!already!draws!people!to!the!region.!

A!growing!number!of!Americans!aged!50+!are!now!actively!considering!relocating!outside!the!USA!to!retire.!Due!to!its!close!proximity!to!the!United!States!Mexico!remains!the!number!one!destination!for!Americans!retiring!abroad.!It!is!estimated!that!over!one!million!Americans!are!living!in!Mexico!but!there!are!no!exact!statistics!for!retirees.!The!recent!growth!of!gated!retirement!communities!in!Mexico,!in!the!costal!area’s!targeting!US!and!Canadian!second!home!buyers!and!retirees!indicated!that!this!is!a!growth!market.!It!is!estimated!that!between!200e300,000!Americans!reside!in!these!coastal!areas.!With!an!increase!of!retiree’s!there!becomes!an!increase!in!the!need!for!reliable,!costeeffective!healthcare.!Already!the!majority!of!Americans!residing!in!Mexico!obtain!some!healthcare!insurance!in!Mexico!as!they!are!not!covered!by!US!health!insurance!when!living!abroad.!!

PALLIATIVE!CARE!

A!growing!area!of!medical!tourism!is!palliative!care!which!includes!management!of!adverse!health!conditions!such!as!dialysis,!cancer!management!and!care.!There!are!few!statistics!available!for!the!global!export!services!trade!in!this!area!but!the!prime!motivation!is!usually!cost!savings!–!providing!similar!or!better!service!for!lower!costs.!

PALLIATIVE!CARE!

A!growing!area!of!medical!tourism!is!palliative!care!which!includes!management!of!adverse!health!conditions!such!as!dialysis,!cancer!management!and!care.!There!are!few!statistics!available!for!the!global!export!services!trade!in!this!area!but!the!prime!motivation!is!usually!cost!savings!–!providing!similar!or!better!service!for!lower!costs.!

9.2 The!Health!and!Wellness!Tourism!in!Barbados!

Health!and!wellness!tourism!in!Barbados!cuts!across!both!personal!services!and!mainstream!tourism.!However,!specific!breakdowns!are!not!available.!Little!is!known!about!this!sector!in!Barbados!but!anecdotal!evidence!shows!that!there!is!some!activity!across!the!wellness,!spa,!medical!and!assisted!living!subesectors.!The!majority!of!medical!healthcare!in!Barbados!is!public!so!that!any!growth!in!this!sector!is!likely!to!come!from!foreign!investments.!With!regards!wellness,!there!are!a!range!of!wellness!providers!in!Barbados!including!reiki,!reflexology,!yoga,!aryeveda,!herbal!and!other!practitioners.!!

9.3 Potential!for!Health!and!Wellness!tourism!in!Barbados!

Medical!tourism!development!is!likely!to!come!from!foreign!investments!rather!than!local!facilities!(as!the!majority!of!the!domestic!sector!is!public!and!the!private!facilities!are!limited).!!According!to!Joint!Commission!International!(the!US!medical!facility!accreditation!body)!there!is!one!institution!

!Progress!Report!


! !!


!

28!


accredited!in!Barbados!(a!foreign!owned!fertility!clinic).!There!is!also!a!plan!for!a!foreign!investment!to!build!a!US$!100!million!hospital!for!medical!tourism!by!2014.!!

Such!facilities!could!attract!a!1,000!foreign!patients!who,!with!a!companion!stay!on!average!for!3!weeks!and!spend!US$400!per!day.!!Combined!with!an!average!treatment!cost!of!US$5,000,!this!subesector!could!contribute!US$!20!million!(B$!40!million)!to!the!economy.!

There!is!potential!to!develop!wellness!and!retreat!tourism!in!Barbados,!especially!given!the!higher!spend!rates.!For!example,!if!5,000!wellness!tourists!were!brought!in!for!14!days!at!US$1,000!total!spend!per!day,!then!the!sector!would!be!worth!US$!5!million!(B$!10!million).!



The!main!decision!criteria! for!selection!of!health!and!wellness!destinations!by! international!clients!are:!!

! Accreditation!and!recognition!

! Insurance!

! Reputation!!


1. Accreditation(and(recognition.!In!terms!of!medical!tourism,!international!accreditation!is!a!must.!For!US,!this!is!JCI!accreditation!and!for!Europe,!Middle!East!and!Asia,!either!JCI!or!Trent!International.!For!alternative!therapists!in!the!wellness!sector,!national!standards!and/or!industry!self!regulation/codes!of!practise!are!important!to!provide!quality!guarantees!to!clients.!

2. Insurance:!Liability!insurance!for!both!medical!and!wellness!subesectors!are!important,!especially!when!dealing!with!higher!end!clients.!

3. Reputation:!This!is!again,!is!key!to!both!subesectors.!For!medical,!experience!of!doctors!and!success!rates!play!an!important!role!in!decision!making.!For!wellness,!a!well!put!together!“story”!of!the!wellness!philosophy!and!difference!in!Barbados!is!key!–!this!concept!is!essentially!what!is!being!sold.!!

!

Progress!Report!


!

Business(Support(

10 Business'Support!Services!Definition of Business support services (sometimes also referred to as business development services) are services that support and improve competitiveness within the value chains in Barbados – can be services to producers for domestic and international markets, for product manufactures, agricultural producers as well as industry.

The!Role!of!Services!in!Competitiveness!

The!key!constraints!and!challenges!facing!the!competitive!production!in!Barbados!(agriculture,!

manufacturing!and!industry)!are!scale!and!vulnerability.!As!a!result!the!approach!to!supporting!the!

business!sector!in!Barbados!must!necessarily!focus!on!higher!value!niche!products!and!services!for!

both!the!domestic!(through!supply!to!major!value!chain,!tourism)!and!export!market.!To!promote!

the!development!of!a!more!competitive!and!higher!value!production!base,!a!strategy!of!improving!

provision!of!business!development!and!support!services!can!help.!

Higher!value!production!requires!higher!quality!of!manufacturing!and!service!delivery.!It!has!been!

shown!consistently!throughout!the!world!that!higher!quality!comes!from!quality!and!sustained!

provision!of!business!development!and!support!services.!For!manufacturing,!the!US!Government27!

has!recently!linked!its!sector’s!resilience!and!competitiveness!through!the!current!global!economic!

crisis!to!US!manufacturers!spending!on!business!services.!US!firms!spend!30%!of!value!added!

production!on!business!services.!This!compares!to!only!23%!in!the!UK!and!Italy,!18%!in!Spain!and!

Mexico!and!13%!in!Indonesia.!Therefore,!there!is!a!strong!case!in!increasing!the!availability!of!

business!services!to!manufacturers,!agricultural!producers!and!industry!in!Barbados!to!improve!their!

competitiveness!and!help!them!grow.!!In!parallel,!this!will!create!amore!vibrant!domestic!market!

that!will!strengthen!local!suppliers,!making!them!more!capable!to!export!these!services,!both!

regionally!and!internationally.!

The!scope!of!business!support!services!required!depends!upon!the!individual!value!chains!involved,!

but!generically!business!support!services!can!include:!

! Market(information(services:!Access!to!market!data,!including!for!international!trade;!targeted!

market!research;!customer!segmentation;!customer!feedback!surveys.!

! Product( development( and( access( to( technology( services:! Product! design! and! adaptation;!technology! information;! technology! transfer! and! commercialisation;! equipment! upgrade;!

relevant!technical!skill!development.!

! Procurement( and( sourcing:! Information! on! input! supply! features,! pricing! and! sources;!

facilitation! of! input! supplier! –! entrepreneur! linkages;! facilitation! of! bulk! buying! (joint!

procurement)!groups.!

! Training,( technical( assistance( and( advisory( (strategic( and( operational( aspects( of( business):!Business! incubation! for! starteups;! feasibility! studies! and! business! plans;! business! counselling;!

twinning! and! mentoring! of! existing! MSMEs;! small! business! management! training! (including!

business! and! production! process! management);! technical! training! related! to! production! or!

service! delivery;! legal! and! taxation! advice;! accountancy,! bookekeeping! and! inventory!

management.!

27!U.S.!Manufacturing!in!International!Perspective!(2013)!Congressional!Research!Service!

!Progress!Report!


! !!


!

30!

Business!Support!!

! Distribution,( transport( and( communicationbrelated( services:! Storage! and! warehousing;!transport!and!delivery;!ICT!services.!

! Marketing( services:! Trade! fairs,! product! exhibitions! and! buyereseller! meetings! (businessetoebusiness! matchmaking);! advertising;! packaging! and! labelling! design;! facilitation! of!subcontracting!and!outsourcing.!

! Facilitation( of( access( to( finance:! Linking! businesses! to! banks,! microefinance! institutions! and!other!nonebanking! financial! institutions! serving!SMEs! (leasing!and! factoring! companies,!export!credit!agencies,!etc.);!providing!information!on!credit!schemes!and!conditions;!assist!in!business!planning!for!loan!applications.!

! Policy( advocacy( and( industry( representation:! Industry! platform,! representation! of! industry!interests!in!publiceprivate!dialogue.!!

The!potential!impact!on!productivity!of!business!support!services!can!be!extremely!significant!for!firms.!Even!mandatory!services!such!as!auditing,!if!undertaken!effectively!and!efficiently!can!save!business!in!terms!of!tax!optimisation!and!investment!planning.!Again,!the!specific!impacts!and!effects!of!business!services!on!productivity!and!cost!savings!depend!upon!the!industry!but!a!few!illustrations!are!provided!below:!

! Energy( auditors! and! consultants! could! save! energy! costs! of! 30e35%! 28! In! sectors!where! energy! costs! are! high! (some! sectors! energy! costs! are! 20e40%!of! total! costs)!!this!could!have!a!big!impact!on!competitiveness.!

! Total( quality( management( (TQM)( and( quality( assurance! 5e30%29! of! total! costs!through!adoption!of,!for!example!ISO!9000.!!

! Technical( training( to( farmers! could! increase! productivity! by! 187%30! if! continuous!over!2!years.!

! Sales(and(marketing(Training!can!increase!sales!by!80%31!! Technology(engineering(and(consulting(could!increase!productivity!by!over!100%32!! ICT( services( to( manufacturers( have! a! positive! return! on! investment! in! terms! of!

revenue!increases!of!5e20%33!! Procurement(and(sourcing(consultancies!typically!save!15e25%!of!procurement!costs!

which!can!be!30e60%!of!a!firms!total!costs.34!

The!Business!Support!Sector!in!Barbados!

The!nonefinancial!business!support!services!are!part!of!the!business!and!finance!services!group!valued!at!B$!2.3!billion.!Data!on!the!sector!in!Barbados!is!not!readily!available.!To!understand!the!market!potential!in!Barbados,!an!audit!of!agriculture,!manufacturing!and!industrial!firms!is!required!to!list!the!services!they!currently!procuring!(including!imported!services!from!foreign!providers)!and!services!they!would!like!to!procure!(but!cannot!due!to!lack!of!availability!or!high!costs).!Then!through!benchmarking!industries!examine!the!services!that!could!improve!business!competitiveness!throughout!the!value!chain!(although!firms!may!not!know!they!need!these!services.!Finally,!an!audit! 28!Global!Energy!Efficiency!Benchmarking!!(2010)!UNIDO!29!Impact!of!Quality!Management!in!the!US!(2008)!Deloitte's!30 Davies,!K.!et.!al.!(2011).!Impact!of!Farmer!Field!Schools!on!Agricultural!Productivity!and!Poverty!in!East!Africa.!World!Development!Volume!40,!Issue!2,!September!2011.!31 Bruhn,Miriam,!Dean!S.!Karlan,!and!Antoinette!Schoar.!(2012)!The!Impact!ofConsulting!Services!on!Small!and!Medium!Enterprises:!Evidence!from!a!Randomized!Trial!in!Mexico.!32 The!World!Bank.!KickStart!Irrigation!Pumps:!Adapting!Technology!to!Development!Challenges.!33!ICT!solutions!and!labor!productivity:!evidence!from!firmlevel!data!(2007)!JuhaeMiikka!Nurmilaakso!34!A!fresh!look!at!procurement!(2011)!By!Clinton!Anderson,!David!Fleisch,!Greg!Gerstenhaber!and!Sam!Thakarar!

Progress!Report!


!

Business(Support(

of!all!business!support!providers!in!Barbados,!their!services,!qualifications!and!capacity!must!be!undertaken!to!better!understand!and!match!supply!with!demand!for!business!support!services.!

Business!Support!Potential!in!Barbados!

An!increase!in!the!level!of!business!support!services!of!an!additional!5%!of!value!added!would!increase!the!national!market!for!business!support!services!by!B$!307!

Table(11:(Increase(in(Business(Support(Services(as(a(percentage(value(added(( Value(added35(

(B$(m)(

Increase(in(Business(Support(Services(

Agriculture! 184.0( 9.2(

Manufacturing! 357.4( 17.9(

Industry! 1,425.6( 71.3(

TOTAL( ( 98.4(

Challenges!to!be!addressed!


The!main!constraints!to!the!development!of!business!support!services!are:!!

! Understanding!the!Value!of!services!and!willingness!to!pay!

! Quality!of!services!needed!

! Availability/range!of!services!available!(market!size)!


1. Understanding(the(value(of(services(and(willingness(to(pay:(One!of!the!biggest!constraints!to!the!development!of!the!business!support!services!sector!is!the!appreciation!by!the!private!sector!of!the!value,!importance!and!benefit!of!business!support!services.!Often!business,!especially!small!business,!with!limited!resources,!will!elect!not!to!pay!for!business!services,!either!doing!without!or!trying!undertake!the!service!delivery!inehouse.!Even!when!they!do!procure!external!services,!they!simply!look!for!lowest!cost,!not!best!quality!(often!a!business!will!only!procure!services!it!has!too!by!law,!eg!legal!and!audit!services).!This!leads!to!ineffective!delivery!of!these!services!which!does!not!benefit!the!business.!Greater!understanding!of!the!benefits!of!the!business!services!amongst!the!private!sector!is!needed,!as!well!as!incentives!to!encourage!procurement!of!services.!Another!important!factor!in!willingness!to!pay!is!the!provision!by!public!providers!of!certain!business!support!services!(such!as!export!promotion!or!agricultural!extension!services).!In!general,!public!providers!are!less!efficient!than!the!private!sector!but!this!can!create!a!culture!of!“nonepayment”!for!business!services!by!businesses!who!simply!expect!not!to!pay.(

2. Quality(of(services(needed:(The!willingness!to!pay!is!also!linked!to!the!quality!of!the!business!support!services!available!and!price!of!those!services!(value!for!money!so!services!have!a!

35!Barbados!Metadata!(2013)!World!Bank!

!Progress!Report!


! !!


!

32!

Business!Support!!

“return”!on!investment).!The!skills,!experience!and!qualification!of!business!services!providers!will!affect!the!benefits!to!be!derived!from!these!services.!Therefore,!in!order!to!make!the!expected!gains!from!provision!of!business!services!there!needs!to!be!“quality”!providers!available!in!the!market.(

3. Availability/range(of(services(available((market(size):(Given!the!relative!small!market!and!number!of!businesses!in!Barbados,!there!may!not!be!sufficient!demand!to!sustain!a!full!range!of!competitive!business!support!services!subesectors.!Therefore,!the!range!of!business!support!services!available!may!be!limited.!Even!where!the!market!demand!!is!sufficient!to!sustain!a!market,!the!market!may!be!so!small!that!monopoly!positions!may!lead!to!higher!prices!and!lower!quality!of!services.(

!

Progress!Report!


!

Conclusions(

11 Conclusions!This section presents an updated and partly disaggregated picture of services and services exports in Barbados. It also examines the prospects, within the global marketplace and national capacity constraints for development of each of the major sectors and recommends the sectors that strategically, Barbados should concentrate, develop and promote.

11.1 !Guestimate!of!sectoral!breakdown!

Research!during!the!scoping!mission!has!increased!the!understanding!of!the!B$5,524.6!services!sector!in!Barbados!and!the!B$3,160!services!exports!in!some!groups.!However,!even!where!figures!appear!to!closely!inform!the!composition!of!the!category,!these!figures!are!not!very!rigorous!and!need!to!be!regarded!cautiously.!This!is!not!a!substitute!for!a!more!rigorous!analysis!of!the!composition!of!each!service!sector!in!the!Barbados!economy.!!!!

FINANCE!AND!BUSINESS!SERVICES!

For!finance!and!business!industry!we!are!fairly!confident!that!we!have!a!good!understanding!of!the!sector.!Finance!and!Business!is!report!in!national!accounts!as!totalling!B$2.3!billion.!From!estimations!from!the!various!sectors!in!Barbados,!we!can!account!for!around!B$!1!billion.!If!we!assume!services!to!agriculture,!manufacturing!and!industry!is!currently!15%!of!value!added!(equivalent!to!that!of!Indonesia!and!Mexico),!then!this!would!account!for!a!further!B$300!million.!This!leaves!B$!1!billion!so!assuming!this!is!mainly!domestic!banking,!finance!and!insurance,!then!the!whole!category!is!accounted!for.!UNCTADstat!data!states!export!of!“other!business!services”!(a!subegroup!of!finance!and!business)!amount!to!B$754!million.!However,!UNCTAD,!using!balance!of!payments!calculations!cannot!further!disaggregate!this!further!despite!this!being!approximately!one!quarter!of!all!services!exports!and!43%!of!nonetourism!exports.!Following!research!and!analysis,!we!can!account!for!over!B$700!million!with!approximately!66%!attributed!to!revenue!from!international!business!companies,!27%!to!business!process!outsourcing!exports!and!1%!from!export!of!construction!related!professional!services.!

( Value(of(the(

Sector((

(B$m)(

Exports((

(B$m)(

Finance!&!business! 2321.8( 921.4(

− Other!business!services(

=BPO!

=!IBCs!

=Professional!services!

=Business!support!services!(nonefinancial)!

!

200!

500!

38!

300!

753.6!

200!

500!

4!

e!

− Insurance( 100.6+! 100.6!

− Finance( 37.8+! 37.8!

− Computer!&!information(

=!ICT!

!

91!

22.8!

91!

!

− Royalties!and!licence!fees( 6.6! 6.6!

!Progress!Report!


! !!


!

34!

Conclusions!!!

DISTRIBUTION!AND!LEISURE!SERVICES!

Distribution!and!leisure!services!amount!to!B$!1.7!billion,!of!which!B$1.4!billion!is!export!comprising!tourists,!business!travels!and!foreign!students.!This!means!the!remaining!B$!300!million!is!attributed!to!domestic!consumption!of!around!B$!1,400!per!capita!per!annum!on!retail!which!again,!seems!reasonable.!Distribution(and(leisure( 1704.9! 1412.0!

Hotels/restaurant(

Wholesale/retail(

− Travel(

=!foreign!students!

1043.5!

661.4!

!

!

!

1412.0!

60!

PERSONAL!SERVICES!

Personal!services!category!is!the!only!area!where!we!do!not!have!very!much!further!information.!The!total!value!of!personal!services!are!almost!B$300!million!where!we!estimate!that!around!B$16!million!(5%)!is!revenue!for!fees!from!foreign!students.!Therefore,!95%!of!this!category!remain!unaccounted!for!and!could!include!private!education!fees!from!nationals,!private!healthcare,!cultural,!recreational!and!sporting!services.!Personal( (incl.( health,( education( &(other)(

291.5! 0.8!

− Personal!services(

=!education(

! 0.8!

16!

OTHER!

The!only!other!sectors!specified!are!transport!and!communications!and!construction!which!are!disaggregated!enough!for!our!purposes!and!valued!at!B$!610!million!and!B$!375!million!respectively.!

11.2 Selection!of!Priority!Services!Sectors!

CRITERIA!FOR!PRIORITISATION!

Whilst!it!is!generally!recommended!that!better!quality!information!is!collected!and!analysed!prior!to!policy!decisions,!for!the!purposes!of!an!overall!strategic!approach!and!policy,!this!is!a!useful!indication.!Prior!to!the!development!of!specific!activities!under!the!sectoral!components!of!the!strategy,!it!is!strongly!recommended!that!a!detailed!survey!and!better!understanding!of!the!priority!sectors!is!undertaken.!

The!criteria!used!in!this!report!to!recommend!priority!services!sectors!for!!

Value(proposition((medium(term):!! This!is!the!estimate!of!the!overall!benefit!to!the!Barbados!economy!of!developing!the!specific!sector,!based!on!a!number!of!assumptions!detailed!in!the!relevant!sector!chapter.!This!is,!in!each!case!quantitative!and!available!for!direct!comparison.!

Employment(generation:!! Where!direct!employment!from!increased!activities!in!each!sector!has!been!estimated,!these!figures!are!provided.!Where!

Progress!Report!


!

Conclusions(

figures!are!not!available!comment!on!the!employment!levels!expected!will!be!given.!!

Quality(of(job:! The!number!of!jobs!created!is!only!one!part!of!the!equation,!especially!in!a!relatively!small!country!with!a!relatively!small!labour!force.!Of!equal!significance!is!the!quality!of!job!created!–!in!terms!of!both!income!and!working!conditions.!

Ownership:!! Whether!the!direct!beneficiary!of!the!sector!is!locally!owned!business!or!foreign!investors.!!

Ease(of(realisation:( Comments!on!the!relative!difficulties!of!developing!the!sector!and!an!assessment!of!how!easy!it!will!be!to!realise!the!assumed!value!proposition!

Long(term(prospects:( Assessment!of!the!longer!term!continued!development!potential!of!the!sector.!

(

BUSINESS!PROCESSING!OUTSOURCING! !

Value(proposition((medium(term)(

B$!110!million!

Employment(generation(

2,000!direct!jobs!

Quality(of(job(((

Medium!(the!BPO!sector!is!highly!competitive!and!although!relatively!well!paid,!it’s!a!high!pressure!working!environment.!Assuming!more!value!added!KPO!sectors!will!be!targeted,!the!jobs!will!be!better!paid!than!existing!BPO!segments).!

Ownership( Mixture!of!local!and!FDI!

Ease(of(realisation(

Relatively!easing!to!build!on!the!existing!industry!and!track!record.!

Long(term(growth(prospects(

The!global!market!for!KPO!services!is!fairly!large!and!growing!and!Barbados!will!only!need!a!relatively!small!share!of!the!global!market.!There!is!therefore!scope!to!continue!developing!this!sector.!

INTERNATIONAL!BUSINESS!COMPANIES! !


B$!125!miilion!


750!direct!jobs!

Quality(of(job(((

Lowemedium!(the!servicing!of!international!business!companies!is!principally!based!on!low!cost!management)!

Ownership( FDI!


A!high!degree!of!promotion!may!be!required!to!significantly!increase!the!number!of!tax!advisors!globally!promoting!Barbados!as!a!IBC!destination.!


The!global!market!for!IBC’s!is!fairly!large!and!Barbados!has!relatively!few!registered!IBCs!(for!example!compared!with!BVI)!so!long!term!sustained!growth!prospects!would!be!good.!

!Progress!Report!


! !!


!

36!

Conclusions!!!

INFORMATION!COMMUNICATIONS!TECHNOLOGY!! !


B$!96!million!


800!directly!employed!

Quality(of(job(((

High!(software!development!and!related!skills!are!high!paid!and!regarded!as!high!level)!

Ownership( Principally!locally!owned.!


The!principal!constraints!to!development!of!the!sector!relate!to!availability!of!skills,!experience!and!qualification.!


The!global!market!is!extremely!large!and!Barbados!only!has!a!small!share!of!it;!therefore,!the!sector!has!potential!for!further!development,!especially!since!the!employment!requirement!is!relatively!small!(that!is!a!large!revenue!per!employee!ratio).!

TERTIARY!EDUCATION! !


US$!150!million!


A!few!hundred!educators,!but!many!more!indirect!jobs!in!restaurant!and!retail.!

Quality(of(job(((

Medium!(high!level!jobs!in!education!with!a!range!of!jobs!in!retail,!catering!and!leisure)!

Ownership( Local!


Once!facilities!are!in!place,!attracting!foreign!students!is!a!relatively!easy!task,!especially!for!ELT!and!TVET!


Growing!market!with!constraints!in!traditional!markets!which!mean!there!is!good!long!term!potential.!

CONSTRUCTION!RELATED!PROFESSIONAL!SERVICES! !


B$!10!million!


A!few!hundred.!

Quality(of(job(((

High!(professionals!with!high!skills!set!and!internationally!accredited!qualifications!and!professional!membership)!!

Ownership( Local!


Realisation!of!these!are!based!on!relationship!building!and!netwroking!with!international!partners!–!this!has!a!relatively!high!cost!and!can!be!long!term.!


Long!term!growth!is!constrained!by!the!avaiability!and!number!of!qualified!professionals!in!Barbados,!which!cannot!easily!be!grown.!

!

! !

Progress!Report!


!

Conclusions(

CREATIVE!INDUSTRIES! !


B$!10!million!


Low!hundreds!of!jobs!from!performers!

Quality(of(job((Although!the!overall!quality!of!working!conditions!could!be!regarded!as!high!(artistes!

pursuing!their!art)!but!usually!earnings!in!this!sector!

Ownership( Local!


Access!to!event!management!networks!may!not!be!too!difficult!but!procurement!is!

dependent!on!the!needs/demands!of!the!clients!which!is!outside!the!control!of!the!

performers!themselves!–!they!can!only!offer!a!quality!product!and!wait!for!opportunities!

to!arise.!


Growth!is!limited!as!the!market!for!specialised!Caribbean!artistes!is!limited.!

HEALTH!AND!WELLNESS! !


B$!50!million!(B$40!medical!and!B$10!million!wellness)!


High!100s!

Quality(of(job(((

High!is!medical!tourism.!

Low!emedium!skill!levels,!but!working!conditions,!by!definition!in!the!wellness!sector,!

working!consditions!will!be!high.!

Ownership( Medical!–!Foreign!

Wellness!e!Local!


FDI!promotion!is!required!for!medical!tourism!and!this!is!highly!competitive,!so!difficult!

to!develop.!

Wellness!based!on!developing!and!promoting!the!“life!changing:!themes!that!wellness!

tourists!are!looking!for.!


Good!potential!in!both!areas!as!growing!demand!is!all!segments!of!health!and!wellness.!

BUSINESS!SUPPORT!SERVICES


B$!98.4!million!


High!100s!across!a!wide!variety!of!services!sectors!(including!new!areas)!

Quality(of(job(((

The!type!of!jobs!will!be!varied!and!so!mixed!skill!(income)!levels!will!be!attained!across!

the!entire!sector!

Ownership( Local!ownership!


Hard!to!sell!“services”!to!business!in!Barbados!and!so!much!effort!will!be!required!to!

promote!the!use!of!services!by!other!value!chains.!


Good!growth!prospects!as!once!experience!and!competencees!are!developed!in!

Barbados,!these!could!be!sold!within!the!region!too.!

!Progress!Report!


! !!


!

38!

Conclusions!!!

RECOMMENDATION!

The!above!assessments!of!the!main!services!sectors!(excluding!financial!and!mainstream!tourism)!all!have!potential!to!develop.!None!of!these!should!be!explicitly!excluded!from!the!strategy,!or!indeed,!from!any!other!government!policy!initiative!(for!example,!even!though!the!recommendation!for!priority,!or!rather,!focus!services!sectors!does!not!include!wellness,!wellness!has!potential!and!should!be!addressed!within!the!context!of!a!broader!tourism!diversification!programme).!In!terms!of!the!development!of!a!national!services!strategy,!the!focus!sectors!recommended!are!those!with!good!potential!in!both!the!medium!and!long!term,!are!sustainable,!provide!good!quality!jobs!and!link!to!a!common!theme!that!can!be!used!to!develop!the!brand!image!of!Barbados’s!services!sector.!It!is!recommended!that!Barbados!pursue!and!develop!its!services!image!based!on!provision!of!quality!knowledge!based!services!in:!

1. Knowledge!Process!Outsourcing!(higher!value!segment!of!BPO)!

2. ICT!(focusing!on!higher!end!software!engineering!and!development)!

3. Tertiary!Education!(higher!education,!TVET!and!ELT)!

4. Business!Support!services!(high!quality!services!that!are!proven!to!increase!value!added!and!productivity!across!professions)!

As!indicated!above,!the!other!nonefocal!sectors!should!not!be!ignored!and!support,!through!associations,!clusters,!BSCI!and/or!other!BSO!(business!support!organisations)!should!be!encouraged.!

! Medical!tourism!–!given!the!low!level!of!private!healthcare!in!Barbados,!the!growth!of! this! sector! may! lie! primarily! in! foreign! direct! investment.! Therefore,! Invest!Barbados! should! focus! on! attracting! others! to! this! sector.! As! a! critical! mass! of!facilities! is! established,! it! may! become! a! future! focal! sector.! Guidelines! for!investment!promotion!to!this!sector!could!be!provided,!together!with!lists!of!foreign!medical!tourism!investors.!!

! Wellness! –! this! sector! could! be! developed! on! a! small! scale! through! cooperation!amongst! stakeholders! and! building! “Bajan! wellness! products.”! It! would! also! form!part!of!the!Ministry!of!Tourism!Diversification!Strategy.!Guidelines!on!developing!the!“product”!have!already!been!provided.!Further!guidelines!on!marketing!channels!for!wellness!can!be!provided.!!

! Construction! related! professional! services! sector! is! limited! by! the! number! of!professionals! with! international! qualifications! and! affiliation.! There! is! scope! for!developing!this!sector!through!aid!funded!procurement!and!networking.!A!guide!for!marketing!professional!services!can!be!provided.!!

! Creative! sector! is! relatively! small,! with! limited! growth! and! difficult! marketing! and!promotion.!However,!there!is!scope!to!help!to!the!coordination!and!promotion!of!the!sector!with!models!such!as!the!Caribbean!Creative!Cluster!which!acts!as!an!outward!agent!for!artistes.!

! International!business!companies!sector!–!this!has!potential!but!the!sector!requires!more!subtle!promotion!–!international!corporations!usually!require!discretion!in!IBC.!However,!more!could!be!down!through!investment!promotion!and!promotion!to!tax!advisers!in!target!markets.!!

!

Documents

progress report (draft) - CTA Economic · Barbados(Services(Sector(Development(Strategy! Project Recipient Barbados Coalition of Services Industries Project Funded by Commonwealth