Al Hadji, Contributor
WHILE I was preparing to write a column about rate making, I came across two items in the media that caught my immediate attention.
One was a call from the Minister of Industry, Commerce and Technology, on Internet Service Providers (ISPs) to be more innovative in marketing their services to the Jamaican public.
To quote, "he lamented that only two percent of the population had direct access to Internet and said that this figure must increase if the country is to take advantage of the economic opportunities the Internet provided."
The other was a report by Andrew Green in the Financial Gleaner about the cost of Internet access in Jamaica. What appeared to me at odds vis-a-vis the Minister's 'Internet plea' is a fact that access to Internet is not only expensive, but it also attracts tax and GCT.
It reminded me of my own laments that have appeared in some of the columns I have written concerning the experiences of individual computer importers; quality and price of IT and communication services that we mortals receive and pay for; and the OUR's stance regarding the use of 'Yap Jack'.
Ironically, while we aspire for commanding heights in the IT sector, there are too many impediments to the sustainability of this sector in Jamaica. We have a 'Five Year Strategic Information Technology Plan'.
This plan was updated, as recently as March of this year. A joint ministerial message in the plan, signed by three ministers, states and I quote, "Jamaica stands at the threshold of a golden opportunity.
We can either act decisively and embrace it, or wait and be left behind. A global technological revolution is taking place; Jamaica must aggressively pursue the expansion of the ICT (Information, Communications and Technology) sector, or this window of opportunity will be lost."
I could not agree more to this statement. But question is what enabling actions are in place to allow us to exploit this window of 'golden opportunity' or jump on to the technology bandwagon before it leaves us behind wandering in the wilderness of lost opportunities! We cannot just wish the technology revolution to happen.
It cannot happen if it takes someone eight weeks to clear a computer with the help of a custom broker and requires the submission of a multitude of documents while his clients wait for the 'information system' he is committed to deliver in six weeks. And it cannot happen if the Government pleads to make the Internet widely accessible, while the providers charge excessive prices for minimal service and Government continues to impose tax and GCT on top of it.
Strategic plan
The strategic plan states, "In recognition of this new environment, the Jamaican Govern-ment has made the integration of information technology into the Jamaican economy a high priority and a strategic imperative. Jamaica must become the centre for ICT activities and investment in the Caribbean.
With our proximity to the United States and other advantages such as language and relatively low labour costs, we are well placed to attract ICT firms and specialists, and to compete with other developing countries for market share of the global ICT business.
However, in order to realise this vision, we must be proactive. While resources are limited, priorities can be established which can build the foundation for a rational expansion of the ICT sector into higher value-added services."
The aim of the plan is, "to create several thousand jobs in the industry over the next few years, and increase the sector's contribution to GDP to J$10 billion (US$250 million) within five years."
With innumerable sectoral impediments and the government's traditional aim of creating job opportunities, the focus of technology development has so far been on 'low-end low value added' aspects of the industry.
These mainly consist of call centres and data entry services which are mainly targeted to the United States market. It is not the low end where the money and the potential lies. The money lies in the high-end technology services and to exploit that end of the market, we must act now.
We cannot afford to wait for the enabling environment to evolve. This is where the government must be highly proactive in facilitating the development of a market niche. It must make the revolution happen.
All investment and structural adjustment projects financed by multilateral agencies such as the World Bank (IBRD) and Inter American Development Bank (IADB) have technology development components associated with them.
Very few developing countries have capacity to develop and implement systems that are appropriate to their needs. They hire consultants with little or no knowledge of developmental needs of the host countries. The result is a system or an application that is either obsolete or inadequate.
Now that is where our high value market lies.
While this column does not allow me to discuss this potential market in detail, let me briefly outline this market niche on which Jamaica should focus and earn far more foreign exchange than mere US$250 million contribution to GDP over five years.
In the modern world, all Governments need a number of specialised applications to run their operations efficiently and effectively. These among others, include, central bank payment system, infrastructure inventory systems (not the inventory of goods and services), regulatory database, telecom system (not the company billing as we know it), utilities financial database and information systems etc.
Multi-billion-dollar market
There is a multi billion-dollar market for these specialised services throughout the developing world. The multilateral institutions are financing most of it as noted earlier. Let us take a quick look at an example how Jamaica can place herself as a provider of high end specialised systems and follow up services.
Central banks or treasuries in each country perform a multitude of functions such as: deposit banking, foreign exchange controls and management, investment accounting, currency issue and money supply, government banking regulation and supervision of the banking system, clearing house operations etc.
All these activities form a part of central bank 'Payment System'. These systems need to be automated and developed into database/information systems. Jamaica's central bank needs a comprehensive system that can be developed by a special purpose partnership of the University of the West Indies (UWI), Government and the private sector. It can be financed from the central bank or multilateral sources.
The system, once built, can be packaged and marketed through out the developing world by the special purpose software company. The local central bank provides an environment to custom design a payment system with international market potential of millions of dollars, while making its own operations efficient.
A cadre of specialists and consultants at UWI and public/private sector will emerge as providers of advisory services to other developing countries, customising and maintaining systems to meet their needs.
They will also be providers of training. The similar analogy applies to other five or six key public sector systems with markets in over 160 developing countries and a revenue potential of over US$ 1billion for Jamaica.
Have we thought about it or paid attention to this prospect? This requires a co-ordinated effort on the part of numerous agencies in the Government and a select group of experts who understand the logistics and can lead the effort.
We are too busy in building our own small empires independently, relying on the advice of vendors whose interest coincide with their need to sell to us their wares (hard or soft as may be profitable for them). Until next time Al Hadji logs off.
