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Sunil Sinha Technical Director Emerging Market Economics December 2006

This strategic plan aims to promote professional services exports, specifically in the legal and finance sectors, in Barbados. The plan includes marketing activities, direct marketing, and creating an enabling environment for growth.

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Sunil Sinha Technical Director Emerging Market Economics December 2006

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  1. Strategic Plan for the Promotion of Professional Services Exports in Barbados – Business Development Services Sunil Sinha Technical Director Emerging Market Economics December 2006

  2. Overview Strong international demand in market segments: • Legal Services: global outsourcing market to top US$163 billion this year; low-end (billing) and high-end (patent applications, legal research) services outsourced • Finance and Accounting (FA): outsourcing of these functions to hit US$47.6 billion by 2008; low-end (accounts payable/receivable) and high-end (budget forecasting, risk management) tasks outsourced

  3. Market Sectors Legal Services • Two models based on cost savings: • Multinationals using in-house operations in low-cost locations to serve global operations • Firms focused on providing outsourced services; clients are mainly corporates, some law firms Finance and Accounting • Three models: • “Regular” model: outsourcing to one location • “Strategic” model: basic functions to low-cost area, complex functions sent nearshore • Large companies using captive centres

  4. International Trends Legal Services • Some concern in profession in US/UK about professional responsibility implications of outsourcing; clients want secrecy • Still, strong growth in US; 35,000 US legal jobs to be outsourced by 2010, 70% to India Finance and Accounting • Outsourcing cost savings can range from 25-50%, high end for offshoring; India main player, Canada has had some success as nearshore destination • 5 main areas: • Transaction management (billing, accounts P&R) • Finance (performance analysis, budgeting • General accounting (reconciliation, statements prep) • Treasury and risk management (cash planning, audit) • Tax management (tax planning, filing, processing)

  5. Local Capability Legal Services • Good base of well-educated, English-speaking professionals familiar with US/UK legal system Finance and Accounting • ~600 members of Institute of Chartered Accountants, can provide full range of services

  6. Target Markets Legal Services • Primary market remains US, America expected to outsource US$5 billion in litigation support this year • UK less mature market, reservations over outsourcing stronger there Finance and Accounting • US is largest outsourcer of FA functions • But the Europe, Middle East and Africa region is expected to see fastest spending growth in short-term

  7. Market Positioning • Good base of skilled, internationally-trained professionals, but minimal cost advantage over target markets (particularly in law) • Structure of legal and accounting industry (few large players, many 1-2 person firms) does not lend itself to outsourcing, need to consolidate • Gaining position as nearshore outsourcer will depend on partnerships, perhaps investment to set up larger operations • Highly developed financial sector means specific related skills on offer • Proximity to US, Canada – nearer than India

  8. Marketing Activities – Brand Awareness Objective: Increase awareness among potential customers, brand and promote Barbados as centre for BDS • Integrated Website: Promote Barbados as a data safe location for quality legal and accounting services • Foreign Advertising: Limited, directed at key decision makers in companies, firms (both those that outsource and those that provide services)

  9. Marketing Activities – Direct Marketing Objective: Form strategic partnerships to generate export opportunities • Research:Identify suitable international partners for nearshore, identify industry trends to guide development of niche services • Database:Use to track contact with public/private sector contacts, relationship-building tool • Monthly e-zine:Circulate to database contacts to inform them of developments/opportunities in the sector, “excuse” for follow-up calls

  10. Enabling Environment Objective: Addresslocal factors constraining growth • Local Partnerships: Continue to build partnerships between different service providers, to increase scale and product offering • Collaboration and JVs: Low profile (need to sell Barbados as well as product) and lack of scale constrain outsourcing, partnering with major foreign providers addresses these problems • Incentives: Incentives for export are sound, provide ways to improve margins; need to tailor incentive regime around investment to encourage service providers to enter the country, increasing scale • Use of Technology: Do laws need to provide for data protection/security to facilitate for e.g. use of systems that recognise printed characters. Allows for large-scale tasks without large-scale labour

  11. Thank you

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