IT-ENABLING SERVICES (ITES) INDUSTRY SUPPORT SUB-COMPONENT
General Introduction:
The Industry Support Sub-Component of the eGhana Project is mandated to spearhead activities aimed at supporting ITES industries in the country. Salient activities targeted include:
· Supporting ICT SMEs to gain international quality standards that will help them gain access to markets
· Harnessing future potential of ITES in creating new enterprises by supporting the incubation of businesses in the ITES cluster and
· Nurturing existing small and large ITES incumbents to enable them to continue to do business and attract more investments.
· Supporting ICT SMEs in gaining access to markets.
· Collaborating with the Medium, and Small, Micro Enterprise Projects under the Ministry of Trade and Industry in the development of the ICT Park.
· Establishing and nurturing a competent industry association that will partner with the government and also act as a pressure group for the ICT/IT sector.
Expected Outcomes:
The Government of Ghana anticipates that these interventions will lead to the:
1) Development of a dynamic, competitive, sustainable market linked ICT/ITES sector in Ghana
2) Increase in participation of ICT SMEs in the global value chain
3) Increase in transfer of skills and technologies to local ICT SMEs
4) Increase in contribution of SMEs to economic growth and job creation in Ghana.
5) Increase in sales and growth in the ITES/BPO market segment
6) Provision of access to enhance software development methodology tools for quality assurance, certification and standardization
7) Development of an ICT Industry Cluster Strategy that is consistent with sector objectives of government
8) Provision of effective strategy in the use of communication tools and channels for promotion of ICT/ITES SMEs
9) Development of a fully functioning ITES/ICT industry.
Since the inception of the eGhana Project, the Industry Support Unit has undertaken many and varied policy inventions aimed at enhancing the competitiveness and employment levels of Ghanaian MSMEs through:
(i) building an integrated market access and trade facilitation infrastructure program;
(ii) proactively supporting entrepreneurship development;
(iii) reducing selected business constraints, including technical barriers to trade, faced by ICT MSMEs;
(iv) providing an enabling environment to boost increased investments in the ITES/ICT MSME sector.
Support to ICT SMEs.
Under the eGhana Project, GoG with support from the World Bank will institute the eGhana Matching Grant Scheme. This matching grant scheme will provide:
1) Matching grants for public and private training providers to create a skill-based workforce of trainers and professionals for the Business Process Offshoring sector
2) Performance based subsidies matching grant for providers of incubation services to support the creation if businesses with activities in the ITES clusters.
3) Quality Assurance matching grant for the development of a software testing and certification that would be implemented through a university- business linkage program.
Development of these three areas is critical to the growth of the sector. Grants to public and private sector training institutions is a form of support by government to catalyze the creation of skilled workforce of global standards for the ICT/ ITES industry, and support to ICT business incubation is an intervention to nurture small-scale ICT/ITES companies. It is expected that incubation will help new companies develop their products into commercial products. The incubation matching grants will provide new start-up businesses with facilities such as physical space, shared services, business and legal advice, and sometimes financial inputs to assist them in starting operations. This support will continue until companies stabilize and develop the capacity to operate in a competitive business environment.
Business Incubation Program
In many developed and developing countries, business incubators have been used to foster innovation and entrepreneurship and create business opportunities and jobs in local environments. An infoDev study of over 40 incubators found that business incubation is generating important ‘externalities’ by creating a platform for leaders to influence the broader business environment for high-growth small and medium-size enterprises (SMEs).
Based on the important role business incubators play, particularly in more challenging business environments, several emerging markets such as Brazil, India and South Africa have implemented policy frameworks, which include direct and indirect support for business incubation. Many other developing countries are considering developing and implementing such frameworks, including Ghana as part of the World Bank-supported eGhana project.
The IT Enabling Services Secretariat (ITES) collaborated with infoDev, a World Bank affiliate to select Eurecna, an Italian Consultancy Company to carry out a global study of best practices in policy frameworks for the development of Business Incubators in Ghana. The consultant undertook an in-depth review of the situation for business incubation in Ghana which precipitated in policy recommendations for the implementation of business incubation program.
Ghana Incubation Policy
Incubation has become part of a wider program of government to support business development. The Policy Framework provided the road map for successful implementation of Ghana’s incubation program. The framework explored a number of options for incubation in Ghana covering issues from ownership and financing through to specialized sectors to be considered as a focus for an individual incubator. From the analysis, it was concluded that with the diverse needs, stakeholders and funding sources potentially available, it would be a mistake to try and introduce one national rigid governance and service delivery model. Rather, the main focus should be on ensuring that a commercial approach to business incubation is adopted.
The eGhana Project’s business incubation program seeks to promote ICT Entrepreneurship development through the incubation of ICT Business Start-ups. The eGhana Project will support business start-ups and SMEs that have ground breaking and innovative ideas to mature into viable business/commercial ventures.
Other objectives are to:
· promote entrepreneurship development in the IT sector
· increase job creation
· develop business linkages with other sectors/institutions, and
· provide many other spill over effects in to the national economy especially in the Business Process Outsourcing (BPO) sector.
Facilities
The incubation project will support three incubators that in turn will provide their clients (tenant-companies) with office space, utilities, internet access and shared resources centres which will give them access to various secretarial services. Other crucial facilities to be provided include computer equipment, conference room, business development library, kitchen and common eating area. Shared services like faxing, photocopying, printing, ICT support and others are also to be provided.
The Ghana Incubation Policy Framework report recommends a range of property, administrative, managerial, coaching and technical services an incubator may and in many cases should provide. The actual mix of services and how they are delivered (by in-house staff or through contracted services) needs to be determined by reference to the incubator’s clear business development targets, but the objective remains that all incubators should deliver a realistic portfolio of support services and resources to tenants that not only removes the impediments to dynamic business formation and growth in their target sector, but also distinguishes them from other ways of providing premises to business tenants.
Business Support Services
All incubators supported will need to provide a realistic pre-incubation support program to enable potential entrepreneurs in their target market to develop their ideas to the point where incubation can be seriously considered.
Incubated tenants should be expected to make rapid progress to launch the growth of their business. A regular monitoring and evaluation program should be in place with tenants failing to make progress, losing their rights to tenancy in order to make way for other businesses.
Proposed ICT Park Project
This project will support Information Communications Technology Based Entrepreneurship development to kick-start Information Communications Technology and knowledge-led socioeconomic growth by focusing on the establishment of a Technology Park at the Tema Multipurpose Industrial Park at the Free Zone enclave. The premier technology park will stimulate the start-up and growth of technology intensive, knowledge based businesses in Ghana. The park will provide infrastructure and business support services designed to assist export-oriented small and medium Information Communications Technology/Information Technology Enabled Services businesses to maximize their potential for growth.
The Ministry of Communication plans to develop the Information Communications Technology Park with public and private investor funding. Under the proposed ICT Project, certain facilities and infrastructure of the park will be developed by the government and some under a public/ private partnership arrangement or solely by the private sector.
After unfruitful negotiations with Smart Village of Egypt, the consulting company identified by the Ministry as the most capable for the implementation of the ICT Park Project, approval was sought from the bank to revise and split the assignment into two, that is, Marketing& Business Model and Implementation, Development and Supervision of the ICT Park. The World Bank gave approval for the revised Marketing and Supervision Terms of Reference for the proposed ICT Park.
During the first quarter of the year 2009, short listing of consultants, evaluation of technical proposals, opening of financial proposals were undertaken. Consequently, two consultancy assignments were awarded including:
· Development of a Feasibility Study, Marketing/Business Strategy and Promotion Model for the proposed ICT Park and
· Design, Implementation and Supervision of Construction of the Park.
Currently, the feasibility study assignment is completed and final report reviewed by the joint Ministry of Communication and Trade & Industry team. Comments are now with Consultant for incorporation into the final report.
Fortunately the impasse over land for the Park has been resolved. The ITES in collaborating with the Procurement Unit of the MSME Project, has reviewed the original contract for the assignment after identification of gaps and anomalies. A new contract bas been negotiated with the Consultant and has receive the Bank’s “No Objection”. Commencement of work is expected to start by the middle of June 2010.
Park Facilities
The objective of the proposed ICT Park is to stimulate the startup and growth of indigenous technology-intensive, knowledge-based businesses in Ghana by, among others, concentrating ICT facilities in one area, providing easy access to other infrastructure, including land with clear title etc., in order to help reduce the initial capital outlays in communications and network hardware. The Park will provide infrastructure and business support services designed to assist export-oriented small and medium ICT businesses, as well as ITES firms, and to maximize their potential for growth. The ICT Park will involve construction of incubator facilities, construction of a convention center with space for a business and administrative center, conferencing facilities, common services and other shared facilities including residential accommodation, recreational facilities etc.
The proposed ICT Park will provide a platform for the following:
- Incubation of Start-up ICT Companies
- Selection of cutting edge technology firms and nurturing them into successful viable companies
• Business Process Outsourcing
• Interaction among R & D Institutes, Universities and Public Sector
• Commercialization of Technology and
• Standardization & Quality Assurance in the Software Industries (est. of a testing lab.)
• Attraction of Innovative Technology firms.
Residents will benefit from state-of-the-art telecommunications access, including a link to the international fiber network of SAT-3, access to a High-Speed Broadband network, Fiber Optic network for Data, Voice, Internet and Video traffic, Cable TV and video conferencing systems, Redundant Electrical Power Sources, etc. and business development services.
Targeted businesses include software development, data transcription, call centers, telecommunications, IT training and services, and computer assembly. The park is expected to foster skilled employment, increased export of ICT products and services, transfer of technology, and research and development.
Enhancing ITES/BPO Industry through Incentives
The Government of Ghana realizes the potential of creating employment opportunities and boosting investments through the ITES/BPO industry. Alongside other key decision factors such as cost, availability of talent pool and risks, incentives program play a critical role in positioning countries in this market. As a result, Government of Ghana is allocating funds for incentives and grants with aim of upgrading skills and enhancing employment in this sector, supporting business incubation as an intervention for enabling small-size companies to begin and sustain operations and develop a quality assurance program that will provide local SMEs with international certification.
Matching grants’ fund has been provided to support:
· skills training,
· incubation and
· quality assurance.
Training Matching Grants
The object of this training grant program would be to support the market for training in the ITES sector in Ghana by providing incentives to public and private institutions for training trainers and professionals in key segment of the BPO sector. Government has earmarked US$3.0 million for this program.
Incubation Matching Grants
The objective is to provide output-based subsidies to up to 3 incubators or similar public/private institutions that facilitate local innovation and entrepreneurship by incubating and developing new businesses with activities related to ITES/BPO.
Companies operating in the ITES clusters including IT/BPO companies, software developers, recruitment services, training firms, transportation, catering, office support, real estates maintenance, security, general office supplies and such other connected firms are eligible to apply. Selected incubators will be funded for three years.
Real Estate Subsidies
The government of Ghana with the support of the World Bank has initiated a program to renovate government inert warehouses/buildings for the use of ITES/BPO companies. ITESGH Secretariat has identified the Public Works Corporation (PWD) Central Stores in Accra program to be refurbished. Upon completion of this facility incumbent ITES/BPO companies will enjoy subsidized rent and world class facilities.