Fiji’s now home to call center operations for companies such as ANZ’s Quest operation and ACS. The latest to arrive on our shores are South African outfit, the Mindpearl Group.  Alan Graham, Chief Commercial Officer for the company had this to say in industry publications:

Mindpearl has already undertaken extensive research and visits to Fiji, analysed real estate availability, the labour market and met with local government departments and telecommunication providers… Local government is keen to attract investment and job creation particularly in the Information and Communication Technology (ICT) sector.

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For these reasons and others such as the population’s proficiency with English, the company selected Fiji over established BPO players like India and the Philippines. The creation of 10,000 jobs is a drop in the ocean for these players, but for Fiji it means building a viable and vibrant new sector to the economy–one capable of driving future economic growth.

Call centers are the first step in development of more complex BPO and ICT ventures, which include software and service development, assembly and sale of hardware and software, etc.

While researching the topic, I came across a report titled “Financing Technology Entrepreneurs & SMEs in Developing Countries: Challenges and Opportunities”, published by InfoDev, a clearinghouse for ICT and development related topics.

A key hurdle in getting from the early stages of ICT development to the more advanced stage where local technology entrepreneurs can create new firms, is the inability to acquire financing.  The report is filled with policy recommendations and examples from other nations on how to overcome this deficiency.

According to the report, call centers may be the lowest rung on the services ladder but they are still amongst the more costly businesses to establish.  Keeping the cost of business lower than our competitors is key to building the sector:

In the Philippines, the investment per seat ranges from US$4,000–6,000. The costs appear to be higher in Morocco and India. For an initial configuration of at least 50 seats, the average investment required to start a call center can be in the range of US$200,000–400,000 (Source: InfoDev).

Since outsourcing contracts provide a constant cash-flow reducing the need for additional financing for working capital, finding investment capital for such ventures is relatively straightforward. As more businesses are established in Fiji, the lending institutions and commercial banks will feel more comfortable in providing loans for such ventures.

Considerable hurdles remain in getting to the next stage.  I urge policymakers to read the InfoDev report as it offers some clear examples of how to make the most of opportunities in ICT.  Even in the early rounds, we have to start thinking about what the future of the industry will look like.

Examples of ICT ventures and their financing needs

ICT ventures from around the globe and their financing needs (click image to view in Hi-Res) Source: InfoDev