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Looking
Beyond Call Centers A year ago, I discussed the prospects of the booming call center industry including concerns by skeptics that the bubble may soon burst, very much akin to the "lechon manok syndrome" that claimed a lot of victims. Well, look again. Since then, call centers setting up shop in the country almost doubled, with many more foreign call center operators conducting due diligence work in the country. The existing 68 (60 in Metro Manila and eight in Cebu, Clark and Subic) have generated 30,000 jobs for our young professionals, and posted US$480 million in consolidated revenues. The Board of Investments has projected that by end-2004, the number of jobs that the call centers will generate would rise to 60,000 and bring in much as much as US$640 million in sales. The BOI has mapped out a new strategy to bring in new investments outside of the call center hubs in Metro Manila. Potential sites in the countryside include Dumaguete, Baguio, Davao and Cagayan de Oro cities. These new areas take into account the availability of local skilled workers as well as adequate telecommunications infrastructure. Projections made by the Australian contact center consulting firm Callcentres.net and Contact Federation of the Philippines indicate that the country is poised to post a 100 percent growth in call center investments this year. (India, which lords it over the Asian call center industry, is expected to grow by only 65 percent.) First quarter investment report of the BOI also showed that that call centers make up 92 percent of all IT-related investments for the period worth P2.63 billion. "Baby-sitting" works During his term as Trade and Industry secretary, senator-elect Mar Roxas II and his team from the investment promotions group went all out to lure major contact center firms to set up shop in the country. The "Roxas team" did some "baby-sitting" on potential investors, attending to their special needs, and making sure that incentives were competitive and business procedures similar or better than what India has to offer. The DTI team managed to bring in big-ticket call center operators such as Convergys (the biggest operator in the world), Vision-X and Bigfoot to name a few. Convergys and many other firms have since expanded and opened up call center operations outside Metro Manila, particularly Cebu City. Looming threats But before we get too excited and fall into a false sense of security, let us look at possible threats looming over our million-dollar industry. American companies outsourcing work to so many countries including the Philippines, has become a political issue. Employment is expected to be a major issue in the 2004 polls with Democrats repeatedly noting that the US economy has lost more than two million jobs since 2001. For one, Democratic presidential candidate John Kerry has made it known that he would rather see contact center jobs of American companies handled by Americans. Kerry clarified that he would not ban outsourcing per se if he wins the elections, but that he would provide tax credits to companies that maintain their operations in the United States. US President George W. Bush drew flak after his annual economic report highlighted the benefits of outsourcing. His chief economic adviser, Gregory Mankiew, came to his defense and said "outsourcing probably is a plus for the (US) economy in the long run." Notwithstanding this assurance, the rumblings grew louder. Perhaps it would be best for hard-working DTI secretary Cesar Purisima and his team to map out strategies to address this political hot potato before it is too late. Or, we stand to lose what was carefully nurtured before. More than call centers There is a need to continue promoting and developing the call center industry, but we must not forget to look at other potential underlying outsourcing businesses as well. Currently, the country handles payroll, accounting, engineering, animation, medical transcription and other outsourced jobs. But there's more business out there. For example, India is now looking at the possibility of making headway in the laboratory testing, another outsourcing market opportunity. Presently, thousands of Filipino medical technology and radiology graduates are being lured to seek bigger pay checks in the Middle East and Europe. If we move into getting outsourced laboratory testing located here, this will give our graduates a lucrative alternative without having to leave the country. Let us, for the moment, savor the benefits the call center industry is bringing our country, but at the same time not forgetting to protect it from emerging threats. We also must look beyond call centers for new outsourcing market opportunities. We cannot afford to have this bubble burst, not when a million new jobs was solemnly promised. SME Issues on TV "Isyung Kalakalan at iba pa" on IBC News (4:30 pm and 10:30 pm, Monday to Friday) completes today the discussion of issues on the country's small and medium enterprises (SMEs). The growth of SMEs since the passage of the 1991 Magna Carta for small enterprises has been slow. SMEs comprise more than 95 percent of Phillippine businesses and employ over 65 percent of the working population. Sadly, however, they account only for less than 30 percent of the country's production revenues. Cognizant of the huge potential that our small and medium scale companies have, the government is providing several opportunities that could nurture their growth. Join us as we discuss what is being done and what needs to be further strengthened. Watch it. "Breaking Barriers" with Mr. Bayani Fernando, MMDA Chairman "Breaking Barriers" on IBC (11 p.m. every Wednesday) will feature MMDA Chairman Bayani Fernando on Wednesday, 14th July 2004. Whenever one is faced with the challenge to solve problems, the question of who to please and who not to displease always crops up. In pursuit of its mandate, the Metro Manila Development Authority (MMDA) often finds itself in this dilemma. Elected officials of cities and municipalities within the realm of MMDA are subjected to pressures from their respective constituencies. The agenda and vested interests of these local politicians may not necessarily be aligned with what is in the best interest of the entire metropolis. Watch it. Should you
wish to share any insights, write me at Link Edge, 4th Floor, 156
Valero Street, Salcedo Village, 1227 Makati City. Or e-mail me at
reygamboa@linkedge.biz. If you wish to view the previous columns,
you may visit my website at http://bizlinks.linkedge.biz.
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