Nearly three years have passed since Mauritius decided to reincarnate itself as a cyber island with the promise to unleash a knowledge-centric economy. With time, national focus has moved from producing software to business process outsourcing (BPO).

The three pronged approach to the national cyber island vision, technology services, e-governance and e-education is yet to deliver. Meanwhile opportunities have grown multifold. At disposal is a thirty billion dollar immediate opportunity with the potential to create thousands of highly paid jobs and writing a new economic story. All that is required is a dose of adrenalin.

Several articles in the Indian and International press recently spoke of how the BPO rush is creating spill over economic opportunities for peaceful and business friendly nations such as Mauritius, despite a bulk of business moving to established locations like India and Philippines.

?India remains the best location in terms of quality, cost and availability of manpower for BPO services and as far as location attractiveness goes, is unbea-table by any other location. But there are reasons that would justify Indian service providers setting up delivery capabilities in countries such as Mexico, Philippines etc,? said K. Ganesh, President of ICICI OneSource, a leading BPO provider to global corporations.

For large clients, especially for those wherein the entire volume of work is handled by an outsourced (offshore) service provider, business continuity is a critical requirement. As a part of the risk mitigation strategy, clients seek to have a small percentage of work (around 10-20%) done outside India. In a scenario where war is a reality, clients feel more secure with disaster recovery preparedness and a robust business continuity plan in place.

Another reason is that with the scale up in operations and to prevent competition from making inroads, BPO service providers would like to broaden their service spread. Providers would like to offer services in languages other than English, such as Spanish, French or German and thereby expand the scope of the offering. For this, it would be more appropriate to have centers outside India where the potential to handle non-English language support is better. In India, although some companies are handling non-English language support, this is restricted currently to non-voice services.

Since India does not have a large pool of non-English speaking personnel, this (non-English support) will not be a sustainable opportunity in India. It is time service providers start looking at other destinations for non-English support. Clients are also looking at a round-the-clock business proposition and 24/7 continuity of business. Setting up facilities in other countries across different time zones can ensure this.

?Mauritius fits the bill? for Infosys

?Infosys was looking for a place with good infrastructure, lower costs and availability of advance work permits to set up a disaster recovery center, and Mauritius fit the bill,? the company noted in a statement. ?Mauritius is an ideal location for Infosys also because of its close ties with India (and) good flight connectivity with many Indian cities.?

For a large number of indivi-duals who wonder what attracted the Indian technology giant Infosys to this balmy island in the middle of nowhere would realize that physical isolation with a virtual connect can be a competitive advantage in the technology age, especially on one count; disaster recovery and business continuity planning for large multinational corporation who are increasingly relying on outsourcing as one of their corporate strategies.

A quick country analysis indicates three clear avenues of opportunity for exploitation: (a) Business continuity and disaster recovery planning; (b) Multilingual scope; (c) Friendly relationship with India.

Challenges start with national image and shortage of technical skills. Akshay Bhargava, CEO of Progeon, Infosys? BPO arm, who has not been won over by Mauritius thinks differently: ?A disaster recovery center can?t just be a set of similar computers and Internet access. For me, disaster recovery is not so easy, and then there?s the Mauritius? small population to consider.? The next location for the company will be somewhere in Eastern Europe. That?s partly due to Bhargava?s desire to give clients a sense of comfort, which can come from having outsourced back-office operations closer to home.

Meanwhile ICICI One Source?s, MD Ananda Mukerji said in a recent interview with a leading financial daily (eFE) ?We are exploring possibilities of setting up our centers overseas in near-shore locations such as Mauritius, Philippines etc. This is a move purely based on customers? perspective, to enable us to serve clients from multiple locations.? Beginning with 2,000 people this year, ICICI One Source shall expand to 4,000 people, spread over five locations before the close of 2004.

As Indian companies expand their reach to cover markets outside of North America in regions such as Germany and France. ?Companies will have to look at, say, Mauritius for French work. Also, from a client perspective, it makes more sense to spread out in different places rather than concentrate everything at one place,? opined Ananda Mukherji in an earlier interview with Business World, 29 September 2003.

Back in Mauritius however, local intelligentsia and laymen alike, continue to disbelieve: ?Mauritius provides no comparative advantage for information technology related work,? they argue, unaware that opportunity in ICT business extends beyond writing sophisticated computer software. Where Indian companies see several reasons to extend operations to Mauritius, we are shrouded in self-doubt letting opportunities pass by.

Mauritius does not need to compete with India or Philippines, two recognized destinations for offshore ICT and BPO work. Its best stra-tegy could be Co-opetition (a management principle that provides a powerful systematic framework to see new market opportunities in a business environment of constant technological revolutions, from different perspectives advocated by Adam Brandenburger, a Harvard Business School professor).

Skepticism amongst local population

Recent remarks by two distinguished industry experts who visited Mauritius should also help induce confidence. Kiran Karnik, President of NASSCOM (National Association of Software and Services Companies of India), spokesman for India?s signature IT industry and Prof Ravi Aron, a faculty at the Wharton Business School reiterated that country?s bilingual capability and peaceful location make it a strong candidate for disaster recovery and business continuity planning operations that potentially spill into an extended business environment providing an opportunity to spawn French language BPO work.

Providing physical access to potential markets by way of a strong network of flights into and out of Mauritius was perhaps one notable observation that Kiran Karnik made. Ravi Aron?s prescription revolved around the concept of extended business environment within the regional context.

Fortunately, large scale government effort of three years has resulted in two critical achievements:

1. Business case for Mauritius has been established.

2. Infosys, Accenture, Ceridian Centrefile and Cendris have provided critical proof-of-concept.

While opportunity continues to grow by the day and challenges remain, current incentives available for ICT businesses in Mauritius are extremely competitive. Every country aspiring to become an ICT nation is competing with same set of incentives. Tax breaks and investment facilitation are commonplace and do not qualify as incentives any more. Customized, functional and co-opetitive incentives should focus on attracting existing BPO operators from India to extend the French language work of their business apart from using Mauritius as a Disaster Recovery site.

Amongst the hurdles, manpower issues continue to remain complicated despite recent efforts ramping up numbers at various levels of competence. Unfortunately this is an area that requires tweaking tertiary education policies and there exists no immediate solutions except provi-ding grants for job specific training to existing and potential employers.

Infrastructure rates, provision for venture capital and seed financing, strong and customized marketing support, significant and real incentives for start-up activity are areas of improvement.

The cyber tower, perhaps the most intelligent building in this part of the world, a symbol of the national cyber island ambition is almost ready. Unfortunately, skepticism amongst the local population has also risen with the height of the building. Doubt is taking over optimism and hope seems dwindling. As one parent remarked: ?I am advising my children to leave the country as there is no future here?, adding that opportunities in Canada, UK and Australia are more lucrative and provide a better living standard. Large scale inducement for immigration by foreign agencies ope-rating in Mauritius are helping fuel the sentiment sometime out of pure greed to make a quick buck negatively exploiting a difficult economic situation.

Creating meaningful jobs for the youth and providing a wholesome living experience may, however, require slightly more than attracting BPO work. It would be pertinent to recollect what the then Indian IT Minister, Pramod Mahajan speaking at a function at the University of Mauritius exactly one year back, argued: ?ICT should not just be the fifth pillar of the Mauritian economy, it should be its foundation.? A foundation on which all existing pillars plus the fifth IT services pillar and any other pillar that Mauritius may decide to build in the future can safely rest. A strong local ICT ecosystem is the basic frame on which other sectors of the economy must now reside in order to prosper.

Connecting every business and every home to the information superhighway, leveraging ICT tools for horizontal innovation across each and every industry segment is as important today as becoming a regional information corridor to continental Africa, providing software services to French clients, and servicing business process outsourcing contracts to American and European customers. E-Governance and e-education should be realized, not remain the premise of bureaucratic task forces or the subject of political speeches.

A difficult and turbulent economic situation is affecting nations worldwide. However, some countries have seen opportunity in these uncertain times.

Paul Romer, Professor of Economics at Stanford University has stated that every economy is made up of three components: people, physical things and rules. Rules are like recipes, different ways to combine people and things.

He says: ?We used to use iron oxide to make cave paintings and now we put it on computer disks. The point is that the raw material we have to work with has been the same for all human history. So when you think of economic value, the only place it can come from is by re-arranging the amount of fixed stuff we have around us.?

Bhargava?s comments on Mauritius at the beginning of the article, specially with regard to its small population (an apparent weakness) must be seen in the context of Economics Nobel Prize winner, James Meade?s famous prognosis in the early 1960?s that Mauritius? development prospects were poor ? that Mauritius was a strong candidate for failure, with its heavy economic dependence on one crop (sugar), vulnerability to terms of trade shocks, rapid population growth, and potential for ethnic tensions. Three decades of sustained economic performance proved Meade wrong.

It is time once again to prove skeptics wrong. This time the skeptic is not a Nobel economist like Meade, it is the man-next-door, who is packing his son?s luggage to leave the country. Unfortunately, there are no three decades to prove. The plane leaves tomorrow.

Baljinder SHARMA

?James Meade?s famous prognosis in the early 1960?s that Mauritius? development prospects were poor with its heavy economic dependence on sugar and rapid population growth. Three decades of sustained economic performance proved Meade wrong.?