Services sector in Barbados: Charting a new strategic direction

The services sector in the Caribbean in general, and in Barbados in particular, is bleeding from many wounds. The country is in the midst of the worst recession it has faced in modern times. The business sector has contracted and many providers are reporting significant challenges to domestic growth.

Regional economic integration has not evolved as comprehensively as envisaged, leaving export opportunities untapped. Economies in the area are recording uneven growth and most countries are facing economic contraction.

The region, represented by the CARIFORUM member states, signed the Economic Partnership Agreement with the European Union in 2013, its first reciprocal trade agreement that extends to services. However, services exporters from the region are not taking advantages of the opportunities it offers. Negotiations are currently under way for a new reciprocal arrangement with Canada which will also include services. Still, with little experience in utilizing these accords, the region has much to do to make them meaningful. The Barbados Coalition of Service Industries (BCSI) seeks to assist sector exports against this backdrop.

As is the case in many developing nations, there is no coherent policy focus on linkages between services sectors; among other productive sectors; between public and private policy; and between social good and trade policy. Education mandates, for example, may not be in line with the needs of the business community in terms of graduate skill profiles required in export-oriented industries.

While trade policy focuses on market access, insufficient attention is often given to international certifications and credentials. Such policy incoherence can be the undoing of developing countries and compromise overall industry growth. Services must be regarded as a part of the core economic infrastructure on which all other sectors can be built.

A well-articulated policy framework which brings coherence and a working plan encouraging inter-agency and inter-sector collaboration and coordination is BCSI’s ambition over the next few years. Decisions on direction need to be made about how we can help harness the collective potential of our service industries and take services trade to a level that stimulates economic growth.

The organization must work aggressively to draw strong correlations between private- sector development interventions, domestic policy and export initiatives. BCSI’s starting point has been to isolate key initiatives that would lead to our expected output of export promotion while creating a vibrant domestic services sector and economy.

Essentially, the first layer of what we call the Reverse Pyramid Model focuses on building a strong and diverse domestic services industry ready to enter the regional and global marketplace on a solid footing. The emphasis at this level is on the domestic sector growth cycle. As firms reach the apex of the pyramid and show they are ready for export markets, the programme provides a second layer of development support through education and training, benchmarking, identification of best practices, capacity building and partnerships.

BCSI is presently engaged in a number of education and capacity-building activities in the health and wellness sector, renewable energy, biotechnology, mechanical engineering, medical transcription, and teaching English as a second language. This is being done with a view towards building a critical mass of internationally qualified service providers that can deliver high-quality offerings in the domestic market, move readily into export markets, and provide services to the wider economy. Through this section of the reverse pyramid, Barbados is being positioned as a destination for skilled niche services.

The second tier therefore creates an entry-level exporting platform for businesses which prepares them in competitiveness enhancement, market-share retention and expansion.

Historically, a significant amount of effort and resources has been placed on export promotion. However, the capacity of businesses to sustain that orientation and effectively utilize resources allocated to international services marketing and distribution must be underpinned by well-developed, affordable, competitive services. That will form the core of BCSI’s service offerings.

BCSI also reviewed the support it provides to membership. Strong associations are the objective of its interventions at this level and programmes have been developed to support that goal. BCSI has been providing direct

capacity-building support, export development, professional development training, and awareness building to help develop a cadre of export-ready professionals.

Over the past year more than 120 people have undergone training in export-oriented services including energy and environmental design, renewable energy, massage therapy and management consulting. That number is expected to rise in the coming year and educational schemes will therefore expand to include a range of new sectors and skills.

In the coming year we aim to develop a range of new courses to upgrade skills based on the 2013 BCSI study on professional services and sectors with high growth potential. This identification is based on global analysis of sectors through research, domestic prioritization of the findings of that analysis, and the skills needed to service those sectors.

This is the time for Barbados to move beyond the baseline that has brought it to its current development level. Now is the time to plot a policy-driven trajectory that moves progressively up the value chain to produce services which are in high demand as well as those that can build on the established framework. The nation has to determine where its priorities for the services sector lie, direct adequate resources to development and competitiveness support, and integrate those priorities within a comprehensive policy framework.

It is on this basis that BCSI is proud to have piloted the National Services Sector Development Strategy for Barbados with support from the Commonwealth Secretariat. The first national policy instrument to originate in the private sector, it will provide

• a comprehensive framework for domestic services sector development,
• the creation of a strong demand base for domestic service sector development,
• sector development intervention based on the disaggregation of sector inputs,
• upgrading of services skills,
• the creation of stronger linkages between productive sectors, and
• the utilization of that increased strength as a platform for export promotion.

BCSI is positioning the services sector to transform the economy and the way we do business. The organization is poised to chart a new direction and play a new and energized role in leading the Barbados services sector along the path to economic growth and development. This is expected to create new opportunities for current and potential service providers, generate employment, and create a world-class service sector that provides a platform for exporting, increased productivity and global competitiveness.