The case studies also indicate that there are emerging differences in the roles that different institutions play in driving workforce development across the value chain. This is influenced by the existing educational and training frameworks in the countries in which the chain is embedded, the stage of the value chain in which firms in the country are located, the portability of the skills developed, and the commitment of the government to promoting growth in the industry.
Language training: As economies become increasingly globalized, English language skills have
grown in importance to facilitate international trade in goods and services across all economic sectors. This skill is highly portable and relevant for most jobs in the labor market for emerging economies. In the offshore services industry in particular, language skills are key in all stages of the value chain and in many countries, firms must still pay a premium for English-language speakers. It is thus not surprising that there are numerous public and multistakeholder initiatives to drive the development of language competencies in non-English speaking countries promoting the offshore services industry. In Chile, the government provided 3,000 scholarships for IT professionals of all levels of expertise to study English. El Salvador created a National English Center and, together with USAID, embarked on a project to provide language training for 8,000 people. Additionally, El Salvador, along with Guatemala, incorporated English into the primary and secondary school curriculum.
BPO: Given that the short-term training programs focus principally on internal company
protocols and software (limited portability of skills)—while leveraging general communication, problem solving and decision-making skills are developed in high school and college—additional workforce development in the BPO segment is generally carried out internally by the private sector (e.g., Chile, Dominican Republic, and India). However, in the Philippines, due to the importance of the sector to the national economy and limited alternative employment opportunities, the public sector has also committed to driving workforce development for this sector. Existing government vocational training institutions were used to provide a “finishing school” for potential call center agents. State-funded scholarships play a key role in developing the labor pool for the industry, as well as financially supporting the private sector’s National Competency test initiative.
ITO: The institutional approach to workforce development for the ITO segment is more complex,
as the industry requires a depth of technical knowledge that must be accumulated through numerous training programs and ongoing education. Given the disparities in the quality and availability of technical and engineering education in the different countries studied, a variety of approaches can be identified. In India, as both the public and private educational institutions struggled to maintain high quality in the face of growing enrollment, the private sector was forced to take a highly proactive role in developing their
workforces. Some companies almost bypass the tertiary education system completely by hiring second- year students and training them internally. Having created this internal capacity, Indian firms can now leverage this, allowing them to establish operations in countries that have more limited IT capacities. In Chile, the government had launched a country-wide digital program in the 1990s and showed clear commitment to continuing to develop this segment of the value chain, offering training subsidies to firms and fostering collaboration between technical educational institutions such as DuocUC and the industry through the Public-Private Strategic Council.
KPO and high value industry specific segments: Where the offshore services industry depends
on high-level technical and analytical skills that are developed over time and rely on rigorous university education, multistakeholder initiatives appear to be the most prominent approach. Many of the skills required for this sector are portable across different economic sectors. Training for these skills can also strengthen general managerial competencies that are seen as important bottlenecks in emerging
economies. As in the other segments of the offshore service value chain, however, there remain certain gaps between the education sector, and the industry that must be filled. In Chile, the government invited representation from the engineering sector to join the Public-Private Strategic Council to facilitate interaction with educational institutions. In the Philippines, government scholarships were provided to ramp up medical staff in private academies to become medical transcriptionists, thus providing the catalyst for upgrading into services for the health care industry. In India, the government-launched INSPIRE to raise awareness of long-term opportunities in research work to support the development of R&D initiatives in the country working with both educational institutions and the private sector to secure internships for participants of the program during their training.
Workforce development requires an active and innovative commitment to investments in education and training. While a detailed discussion of these changes is beyond the scope of this paper, two key trends emerge from the case studies that warrant analysis. First, there appears to be a strong shift away from a sole focus on education and training for this industry to firm-level provision, as firms compete for talent and offer increasingly attractive opportunities for further education to retain and attract qualified personnel. Second, government or public sector financing increasingly is provided through tax incentives and subsidies for private sector investments in workforce development. The meteoric rise of India’s offshore service sector and the subsequent opportunities for developing countries to enter the global knowledge economy with higher wages, better jobs, and transfer of technology have proven to be highly attractive to developing countries. These promising spillover effects have encouraged governments to directly finance education and training for the sector.
Due to the fierce competition that has emerged between developing countries to serve as hosts for the large third-party providers and captive firms, numerous governments have launched initiatives to
reduce both fixed and variable costs of doing business for offshore services firms, including minimizing labor training costs. These trends highlight the movement away from supply-driven workforce
development to demand-driven workforce development. In both cases, the private sector determines the training to be provided.