TECHNOLOGY-JAMAICA: Software Industry Poised for Take-Off

By IPS Correspondents Reprint | | Print |

Dionne Jackson-Miller

MONTEGO BAY, Feb 23 1999 (IPS) - Twenty-nine-year-old computer programmer Howard Jackson is one of many highly trained professionals who left Jamaica for a high paying job in the United States nearly three years ago.

He hopes to come home one day, and local computer experts say the expansion of the country’s fledging software development industry may enable Jamaica to attract home Jackson and others like him.

Besides facilitating the repatriation of young professionals, the government believes that development of the Information Technology (IT) industry could help replace traditional areas of export earnings like banana and sugar which are being battered by the forces of globalisation.

Most of the activities in Jamaica’s informatics sector have so far been in the relatively low skill data entry area, which earned the country 17 million dollars in 1993, up from 1.5 million dollars in 1986. But experts say the country needs to move toward the high value end of the scale and increase its work in software development.

This sentiment is echoed by Commerce and Technology Minister Phillip Paulwell. “We have to move up the value added chain,” he says. “Jamaica has done well at the data entry level, that’s how we started 17 years ago, but we have to move now to where the money is, which is the (software) development area.”

There are no official government statistics on Jamaica’s software development industry, as a spokesman says the sector is difficult to track, a problem which also affects regional statisticians. Although estimates are that the Caribbean earns more than 200 million dollars from the informatics sector, only 48 million dollars could be tracked.

There are more than 5,000 persons employed in the informatics sector, 36 percent of whom are located in Jamaica, with 41 percent in Barbados.

Only 10 percent of the total number are employed in software development, with 41 percent in transaction processing, and 35 percent in document conversion and 10 percent in software development and maintenance.

One of the few Jamaican firms now developing and exporting software is Advanced Digital Systems (ADS) which specialises in applications for the life and general insurance sector. ADS has been in operation for more than 10 years, and now employs 20 programmers, a tiny operation by international standards.

Nevertheless, over the past two years, the company reported export earnings of one million dollars, a figure it hopes to double this year.

Vice-President of Marketing and Product development Courtland Soares says Jamaica’s software development industry is still in its fledging stages. “I am aware of efforts on the part of individuals with varying degrees of success in providing applications and services in other countries,” he says. “There have been pockets of success in larger entities, but these have tended to be few.”

He says that poor management and short-sightedness in marketing to local firms only, led to the demise of some of those previously established.

“Jamaica as the sole marketplace cannot sustain the viability of any software development company,” he says, adding that ADS’ first customer was based overseas.

Soares says the major limitation facing Jamaican software development companies is the availability of capital. “Undoubtedly, I would rank that number one and the second limiting factor is access to human resources, adequate numbers of persons to man a development operation.”

With Jamaica’s banking sector still struggling to recover from a financial meltdown in the country over the past three years, traditional financiers are unlikely to look favourably on financing relatively risky intangibles like software development any time soon, which is why industry observers believe that local companies have to find creative ways around the financing crunch.

Industry analyst Jens Winton suggests a partnership with established software houses overseas, as well as looking to international financing.

“If we can get success stories established, then we can look at the traditional finance houses, but unless we get a string of these, I don’t think it will change that much. Bankers are traditionally educated to control risk and they will want to keep to their core business.”

The other major challenge facing Jamaica in developing the high end of its technology sector has been the shortage of trained programmers.

The University of the West Indies’ Mona campus in Kingston is now graduating about 50 students in computer programming, with another 50 coming out of the University of Technology.

But even the UWI’s plans to double its graduating class in the next two to three years is not seen as adequate to serve the needs of the industry. This is a big concern of ADS.

“We have actually worked models where it’s very necessary for us to double our staff complement to remain viable, so it’s a major area of concern to us now, in order to find enough people to do that,” says Soares.

This is where the government hopes that the Caribbean Institute of Technology (CIT) will come in.

Newly opened in Montego Bay with 60 students, CIT is a joint venture among an overseas firm, INDUSA, Furman University in the United States, the Jamaican government though its national training agency HEART, the Mona Institute of Business at the University of the West Indies, and the University of Hertfordshire in the United Kingdom.

By the year 2010, it is anticipated that about 3,000 Jamaican computer programmers will have graduated from CIT and will be earning more than 22,000 dollars per year.

A big advantage of the new venture is INDUSA Offshore Services’ pending establishment of an information technology centre in the Montego Bay Freezone which will employ graduates of the institute.

“I’m excited about the CIT, it will solve one of our main obstacles, We will be able to direct a number of investors into the freezone,” says Head of the Department of Mathematics and Computer Science at the UWI , professor Han Reichgelt.

Winton says the CIT is a good formula. “If we can encourage big companies in North America to set up base in Jamaica, let the government cut out red tape or contribute in some way, we probably would be able to turn out something good, but it has to be managed carefully.

“We perhaps have a good case now to say to programmers, see if you can’t do the same work you do in North America here in Jamaica, but electronically.”

Jackson says he has always intended to come home, but thinks with Jamaica’s current economic problems, it will be even more difficult to get major projects off the ground. “I think we can achieve reasonable success in software development at the regional level, but when you consider countries like India producing thousands of low wage engineering graduates each year, it’s hard to compete with them in the international market.”

Soares says however that Jamaica is already competing internationally. “Can we compete on a wider scale? I don’t see any reason why not, We certainly have the brain power, ” he muses.

And Reichgelt believes that the competition from places like India should not deter Jamaican entrepreneurs. “Right now there’s so much demand, it’s a sellers market. It doesn’t mean there is no place for us.”

Paulwell is one of those pushing the information technology sector. “It is through technology that we’re going to be able to move forward. CIT is going to position Jamaica now in the mind of the world (as being) serious about offering IT services to the world. There’s a lot of work to be done and a lot of money,” says Paulwell.

He says CIT is only the first step in the process. “CIT is aimed to train 5,000 Jamaicans over a 10-year period, but the national objective is for us to train 50,000 programmers over a 10-year period, so we’re looking now to other partners,” he adds.

A second CIT branch is set to open later this year in Kingston with 100 students, and Paulwell says the next step will be to franchise the concept to other Caribbean islands.