What do you want to be famous for?

What do you want to be famous for?

And we’re not talking just 15 minutes. India has become the destination for software development, as well as a number of major outsourced processes from accounting to call centres. As new markets emerge to offer services at cut prices, whole new industries spring up around the world, boosting economies and cutting costs, and corners, for big industry. Markets like Costa Rica, the Philippines and Ireland compete in the call centre industry as well, for example, but Africa has now started to look at what it can sell on the global BPO marketplace.

As The East African writes this week: For many developing countries, outsourcing is the ultimate get-rich-quick scheme. The author writes about “the lure of the half-trillion-dollar market”, which has seen 65% growth from 2005 to 2009, 85 per cent of which is unaddressed, being irresistible.

But none of this is inevitable. It takes strategic investment from public and private sector to build the infrastructure, the talent, the demand for a particular service. While Kenya wants to become the top BPO destination in Africa as part of its Vision 2030, there’s a lot of ground work to be done – locally and internationally.

Could African countries succeed in positioning themselves as an outsourcing destinations, as a way to boost the economy, create jobs, to develop new industries? Some of the raw ingredients are there: a young labour force that can be trained in new skills, for example. More importantly, labour is cheap while the cost of property and development and source materials is lower than in much of the world.

Take the film industry. We’ve already seen Mexico, Canada and Eastern Europe become choice destinations for films ‘located’ in the United States, as they offer cheaper locations. Already numerous advertisements that seem to take place in Rome or Paris are shot in Cape Town.

But it’s not as simple as a price tag. Whether it’s a call centre or a cinema lot, to build an entire industry involves infrastructure, technology, people, training, facilities, tax breaks and an economic landscape that encourages start-ups and new entrants, rather than kills any competition.

The GIBS’ review this week touched upon it, with a review of an article from Knowledge@Wharton about Chinese development, and a comparison with India.

“A crucial aspect of the Chinese version of the developmental state has been the creation of physical infrastructure like roads, airports, electricity, internet, etc., writes WMG Media. India, in contrast, has neglected the state provision of physical infrastructure in favour of ‘soft infrastructure’ – building human capital, especially the use of the English language, to make the country a resource of service professionals for businesses all around the world.”

So there are different routes to be taken to establish a centre of excellence and a capacity to solve and service a global need, but it definitely doesn’t come to those who wait. It takes private and public collaboration and conscious planning. As countries like Rwanda and Kenya invest in ICT and skills they may not immediately compete with the likes of India and China, but they’ll sure compete favourably with the rest of the continent.

WEF: Investment Climate and Climate Change

The World Economic Forum in Cape Town last week brought together the public, private and non-governmental sector, as well as media and commentators on Africa.

A quick summary of some of the sessions I attended...

Investment Climate: A Better Way of Doing Business

• Jeremy Ord: Executive chairman, Dimension Data: Need the right infrastructure for business – including telecommunications, otherwise foreign investors will stay away.
• Raila Odinga, Prime Minister of Kenya: Have to knock down the hurdles to doing business, such as lengthy legal and operational processes - but this has to be permanent, not temporary measures.
• Cecilia Ibru, CEO, Oceanic Bank International: Banks need to re-establish trust with consumers and business customers.
• Omari Issa, CEO, Investment Climate Facility: African media needs to be part of changing the perception of Africa as a good place for business, as investors still often look to international media for info – needs to come from the inside.
  
  
  Addressing Climate Change: An African Imperative
• Buyelwa Patience Sonjica, Minister Water & Environment, SA: We need to demystify climate change, so everyone understands the meaning, the impact.
• Ulla Tornaes, Minister of Development Cooperation, Denmark: Climate change is a global issue that needs global solutions involving all stakeholders – public, private sector and civil society.
• Marcus Aguis, Chariman, Barclays, UK: Investors are looking for future business opportunities that make sense, ways to diversify our income – that will include emissions trading. The capital will be there for investments that address climate change.
• Robert Godsell, Non-executive chairman, Eskom Holdings: Not a question of development or climate change mitigation – has to be both. Should always be development. Business people are always more optimistic than scientists and academics. The two powerful forces for future solution will be technology and market forces.
• Tom Boardman, CEO, Nedbank: We can’t underestimate the scale of this issue. We can’t treat the parts – needs a big solution. Technology is important, but takes a while to come on stream, so before we can adapt we need to mitigate. Preserving rainforests is one of the best returns on investment we can make. Already 200 mn people in African under ‘water stress’, with or without climate change. We can’t afford to lose another decade.