NES2 Full Version 2015

THE T

RADE BOARD LTD.

With the support of the Commonwealth Secretariat, Jamaica has embarked on Phase II of the National Export Strategy for the period 2015-2019. Encompassing targeted strategic interventions in key sectors, the National Export Strategy has assumed a critical role in Jamaica’s growth and development though its align-ment to existing initiatives such as Vision 2030, and its objective to increase the export sector’s direct contribution to GDP.

www.tradeandinvestjamaica.org/nes

August 2015

JAMAICA’S NATIONAL EXPORT STRATEGY | 2015-2019 JAMAICA’S NATIONAL EXPORT STRATEGY | 2015-20192 3

table of contents table of contents

Messages 8

Executive Summary 13

Part 1 – Background and Introduction 1 Background 22

2 Brief Review of the National Export Strategy 2010-2013 24

3 Vision 27 3.1 The Goals of the National Export Strategy 3.2 Export Targets

4 Key Success Factors of the National Export Strategy 2015-2019 29 4.1 A Market-Driven Approach 4.2 Foreign Trade Policy and Market Access 4.2.1 CARICOM Intra-Regional Trade and Bilateral Trade Agreements 4.3 A Strong Country Brand 4.4 A Sustainability Driven NES 4.5 An Integrated Approach to Implementation 4.6 Strong Stakeholder Involvement 4.7 Excellent Institutional Support 4.8 A Distribution-Oriented Focus 4.9 Women and the Youth 4.10 Measurable Results

5 Methodology and Approach 38

6 The Jamaican Economy 40 6.1 Economic Performance 6.2 Jamaica’s Growth Agenda 6.3 Jamaica’s Trade Performance 6.3.1 Imports 6.3.2 Exports 6.4 Jamaica’s Competitiveness

7 Post NES 2010-2013 Initiatives 49

8 Trade Competitiveness Framework 52

9 Funding the National Export Strategy 55

Part 2 – Priority Sector Strategies 10 Agro-Processing / Agro Business Sector 59

Section 1 – Agro-processing/Agrobusiness Sector Analysis 10.1 Global Trends 10.1.1 Consumers are Changing 10.1.2 Shift in Demand from West to East 10.1.3 Income and Urbanisation 10.1.4 Impact of Technology 10.1.5 The E-commerce Trend 10.1.6 Health Consciousness 10.1.7 Global Warming 10.2 Competitive Environment 10.2.1 Global Domination by a Few Players 10.2.2 Low Margins and High Costs 10.2.3 Rapid Growth 10.2.4 Europe is the Competitive Leader 10.2.5 How Can Jamaica Compete? 10.2.5.1 Product 10.2.5.2 Positioning 10.2.5.3 Branding 10.3 Market Assessment 10.3.1 Priority Markets for Agro-processed and Agro-business Products 10.4 The Agro-processing / Agro-business Sector in Jamaica 10.4.1 Definition and Composition of the Sector 10.4.2 Export Performance of the Sector 10.4.3 High Prices in the Sector 10.5 SWOT Analysis 10.6 Key Opportunities and Implications for Jamaica 10.6.1 The Fair Trade Movement 10.6.2 Organic Food Products 10.6.3 Authentic Ethnic Food Products 10.6.4 Exotic / Wild Meats 10.6.5 Spa, Health and Wellness 10.6.6 Nutritional and Performance Foods 10.6.7 Fresh Foods 10.7 The Nutraceuticals Sub-sector 10.7.1 The Global Nutraceutical Industry 10.7.2 Key Nutraceuticals Markets

Section 2 – Agro-processing/Agro-business Value Chain and Strategic Plan 10.8 Agro-processing/Agro-business Value Chain 10.9 Nutraceuticals Value Chain 10.10 Agro-processing/Agro-business Sector Strategic Plan 10.10.1 Agro-processing/Agro-business Sector Vision 10.10.2 Agro-processing/Agro-business Sector Objectives


table of contents

10.10.3 Agro-processing/Agro-business Sector Targets 10.10.4 Agro-processing / Agro-business Action Plan

11 Film and Animation Sector Strategy 87

Section 1 – Film and Animation Sector Analysis 11.1 The Global Film Industry at a Glance 11.2 The Global Animation Industry at a Glance 11.3 Key Trends in Film and Animation 11.3.1 Technology Changes Everything 11.3.2 The Growth in Outsourcing of Animation Talent 11.3.3 Independent Films are Growing in Popularity 11.3.4 Piracy is on the Rise 11.3.5 The Influence of Incentives and Subsidies 11.4 Market Assessment 11.4.1 Global Markets for Film 11.4.2 Global Markets for Animation 11.4.3 Priority Markets for Jamaica Film and Animation 11.4.4 Jamaica Diaspora 11.5 Competitive Environment 11.5.1 How Can Jamaica Compete? 11.5.1.1 Talent 11.5.1.2 Technology 11.5.1.3 Branding – the Authentic Jamaican Story 11.6 Implications and Opportunities for Jamaica 11.6.1 The Internet Should not be Ignored 11.6.2 Unique and Authentic Content 11.6.3 Niche Content is the New “Mainstream” 11.6.4 Crowd Funding is More about Raising a Community not Money 11.6.5 Focus on Outsourcing 11.6.6 Trading in Intellectual Property 11.7 The Jamaican Film Sector 11.8 Film and Animation SWOT Analysis

Section 2 – Film and Animation Value Chain and Strategic Planning 11.9 Value Chains 11.9.1 Film Value Chain 11.9.2 Animation Value Chain 11.10 Film and Animation Sector Strategy 11.10.1 Film and Animation Vision 11.10.2 Film and Animation Sector Objectives 11.10.3 Film and Animation Sector Targets 11.10.4 Film and Animation Sector Action Plan 11.10.4.1 Action Plan – Film and Animation Baseline and Distribution Study Project Scope

table of contents

12 Information Technology Enabled Services (ITES) Strategy 113

Section 1 – ITES Sector Analysis 12.1 Importance of the Services Sector 12.2 Jamaica Services Sector Exports 12.3 Information Technology Drives Services 12.4 Target Services Sectors of NES 2015-2019 12.5 The IT Enabled Services Sector 12.6 Key Global Trends and Implications for the ITES Sector 12.6.1 Rising Wages in Competitor Markets 12.6.2 Customers are Becoming More Demanding and Tech-Savvy 12.6.3 Outsourcing goes Social 12.6.4 Big Data is a Big Trend for ITES 12.6.5 Robot Technology is poised to Dominate the Sector 12.6.6 ‘Onshoring’ and ‘Nearshoring’ will Grow in Importance 12.6.7 Cloud Computing is Gaining Significance 12.6.8 Data Breaches leads to Greater Need for Security 12.7 Market Assessment 12.7.1 Priority Sub-sectors 12.8 ITES Competitive Environment 12.8.1 How Can Jamaica Compete? 12.8.1.1 Proximity 12.8.1.2 People 12.8.1.3 Price 12.8.1.4 Product 12.9 ITES Sector in Jamaica 12.10 ITES SWOT Analysis

Section 2 – ITES Value Chain and Strategic Planning 12.11 ITES Value Chain 12.12 ITES Strategy and Action Plan 12.12.1 ITES Sector Vision 12.12.2 ITES Sector Objectives 12.12.3 ITES Sector Targets 12.12.4 ITES Action Plan

13 Light Manufacturing Sector Strategy 133

Section 1 – Light Manufacturing Sector Analysis 13.1 Global Trends in Manufacturing 13.1.1 Manufacturing’s Economic Contribution is Shrinking 13.1.2 Demand Fragmentation 13.1.3 Fragmented Manufacturing Activities 13.1.4 A Growing Middle Class 13.1.5 Rising Wages


table of contents

13.1.6 Talent Shortages 13.1.7 Urbanisation 13.1.8 Growing Environmental Consciousness 13.1.9 High and Volatile Commodity Prices 13.1.10 Impact of Technology and Innovation 13.1.11 Greater Utilisation of Information Technology 13.1.12 Flexible Manufacturing 13.2 Competitive Environment 13.2.1 Plastics 13.2.2 Rubber 13.3 How Can Jamaica Compete? 13.3.1 Intelligence 13.3.2 Technology 13.3.3 Branding 13.4 Market Assessment 13.5 The Light Manufacturing Sector in Jamaica 13.5.1 Definition and Composition of the Light Manufacturing Sector 13.5.2 Breakdown of Light Manufacturing Exports by Segment 13.5.3 Export Performance of the Light Manufacturing Sector 13.6 SWOT Analysis 13.7 Key Opportunities and Implications for Jamaica 13.7.1 Market-based Manufacturing 13.7.2 Customised Manufacturing 13.7.3 Information-driven Manufacturing – Big Data and the Value Chain 13.7.4 Green Manufacturing 13.7.5 Fostering Innovation 13.7.6 Marrying Services and Manufacturing 13.7.7 Distribution-based Manufacturing 13.7.8 Filling the Talent Gap

Section 2 – Light Manufacturing Sector Value Chain and Strategic Plan 13.8 Light Manufacturing Value Chain 13.9 Light Manufacturing Sector Strategic Plan 13.9.1 Light Manufacturing Vision 13.9.2 Light Manufacturing Objectives 13.9.3 Light Manufacturing Targets 13.9.4 Light Manufacturing Action Plan

14 Mining Sector Strategy 160

Section 1 – Mining Sector Analysis

14.1 Global Overview of Mining 14.2 Global Trends in Mining 14.2.1 Population Growth and Urbanisation 14.2.2 Advancements in Technology

14.2.3 Investment in Talent to Keep Up with Technology 14.2.4 More of the Same 14.2.5 China will Tip the Scale 14.2.6 End Users will Become Extractors 14.2.7 Growing Environmental Degradation 14.2.8 Resource Nationalism 14.2.9 New Uses Creates New Opportunities 14.3 Market Assessment of the Mining Sector 14.4 The Mining Sector in Jamaica 14.4.1 Definition and Composition of the Sector 14.4.2 Limestone 14.5 Export Performance of the Mining Sector 14.6 Mining Sector SWOT Analysis

Section 2 – Mining Sector Value Chain and Strategic Plan 14.7 Mining Sector Value Chain 14.8 Mining Sector Strategy 14.8.1 Mining Sector Vision 14.8.2 Mining Sector Objectives 14.8.3 Mining Sector Targets 14.8.4 Mining Sector Action Plan

Part 3 – Crosscutting Areas

15 Export Financing 178 15.1 Export Financing Support Organisations 15.1.1 The National Export-Import Bank of Jamaica 15.1.2 The Development Bank of Jamaica 15.1.3 Other Financial Institutions 15.1.4 The Junior Stock Market of the Jamaica Stock Exchange 15.1.5 Lending to SMEs 15.1.6 Aid for Trade 15.2 Key Strategic Issues of Export Financing 15.3 Export Financing Strategy 15.3.1 Export Financing Vision 199 15.3.2 Export Financing Objectives 15.3.3 Export Financing Action Plan

16 Logistics and Trade Facilitation 187 16.1 The Logistics Hub Initiative 16.2 Importance of the Logistics Hub in driving Exporters’ competitiveness

table of contents


table of contentstable of contents

16.3 Special Economic Zones 16.4 Key Supply Chain Management Initiative and the SEZs 16.5 Key Strategic Issues of Logistics 16.6 Logistics Strategy 16.6.1 Vision 16.6.2 Objectives 16.6.3 Logistics Action Plan

17 Market Access and Trade Information 195 17.1 Market Information 17.2 Trade Agreements 17.3 Key Strategic Issues of Market Access and Trade Information 17.4 Market Access and Trade Information Strategy 17.4.1 Vision 17.4.2 Objectives 17.4.3 Market Access & Trade Information Strategies and Action Plan

18 Standards & Quality / Packaging & Labelling 203 18.1 Standards and Quality 18.2 Packaging and Labelling 18.3 Key Strategic Issues 18.3.1 Standards and Quality 18.3.2 Packaging and Labelling 18.4 Strategy – Standards & Quality (incl. Packaging & Labelling) 18.4.1 Vision 18.4.2 Objectives 18.5 Standards and Quality Action Plan

19 Capacity Building 211 19.1 Key Strategic Issues of Capacity Building 19.2 Capacity Building Strategy 19.2.1 Vision 19.2.2 Objectives 19.2.3 Capacity Building Strategies and Action Plan

Part 4 – Other Strategic Areas

20 Branding 218 20.1 Key Branding Issues 20.2 Branding Strategy 20.2.1 Branding Vision 20.2.2 Brand objectives 20.2.3 Branding Action Plan

21 Sustainability 222 21.1 The Environment as an Industry 21.2 Key Issues 21.3 Sustainability Strategy 21.3.1 Vision 21.3.2 Objectives 21.3.3 Sustainability Action Plan

22 Monitoring and Evaluation 227 195 22.1 M&E Structure 22.2 The Monitoring and Evaluation Process 22.3 Implementation Plan

23 Annex 1 – List of Documents Reviewed 230 24 Glossary 231


MESSAGES MESSAGES

THE MOST HON. PORTIA SIMPSON MILLERPRIME MINISTER OF JAMAICA

MessageThe Jamaica National Export Strat-egy (NES) is a necessary, decisive step towards the development of Jamaican export industries which are progres-sive, adaptive and specialized to take advantage of our country’s considerable economic resources. Phase I of the three year Strategy, which ended in 2015, was moderately successful in implementing a host of valuable initiatives designed to competitively reposition Jamaica’s exports in the global economy.

Phase II aims to build upon this foun-dation with a renewed focus on sector specific initiatives accompanied with a country-wide charge to work together in a collective attempt to spur Jamai-can growth through a single, purposeful, strategy for national export.

Led by the Ministry of Industry, Invest-ment and Commerce, and anchored by JAMPRO, the Jamaica Exporters Asso-ciation and the Jamaica Trade Board with support from the Commonwealth Secretariat, the Strategy has been developed in a highly collaborative and focused manner in line with the mandate of developing exports through unified and cohesive effort.

Private and public stakeholders have been engaged at every step of the way to ensure that the Strategy is true reflec-tion of the possibilities of each of the priority sectors and cross cutting areas,

and the initiatives have been meticu-lously crafted with an eye towards the future and feet firmly grounded in the reality of the Jamaican economy.

The resulting Strategy is a promising one. Each of the sectors and areas selected for their exporting potential have been represented with granular, targeted initiatives designed to be implemented within defined timeframes. The interven-tions are market driven and strategic in nature, and aimed at unlocking the wider value chains of the priority sectors with a renewed emphasis on sustainability, data driven growth, and the maximization of the potential of Brand Jamaica.

The National Export Strategy has been aligned with Vision 2030, the Logistics Hub Initiative, and all other major export plans in a determined effort to comple-ment the existing national approach to export development and cement the NES in the future of the Jamaican economy. Together with the support of all export oriented Ministries, depart-ments and agencies, private sector orga-nizations and the Jamaican public, it is our aim to ensure that that future of our country is defined by a prosperous export sector creating an environment for consistent growth and development.

HON. G. ANTHONY HYLTONMINISTER OF INDUSTRY, INVESTMENT & COMMERCE

MessageThe goal of sustained economic growth in Jamaica must be underpinned by the understanding that we cannot hope to achieve it without first improving the competitiveness of our bourgeoning and established industries. The first National Export Strategy was born out of this recognition; a recognition that we will continue to under-realise our exporting potential without the implementation of targeted initiatives that explicitly aim to increase our exporting capacity in the sectors for which we have the most comparative advantage.

Under the direction of the Ministry of Industry Investment and Commerce, Phase II of the National Export Strat-egy, which will run through to 2020, is intricately tied into the country’s national growth objectives that will see the estab-lishment of Jamaica as a logistics-centred economy premised on the establishment of a vibrant logistics centre. In fact, it is the goal of this Government to ensure that Jamaica becomes the fourth node in the Global Logistics network.

As a result of this focus, it was import-ant to the Ministry that the new NES paid keen attention to the nuts and bolts of achieving the objective of export-led growth for Jamaica. All NES initiatives were developed through a combination of thorough market driven research, successive rounds of stakeholder consul-tations, and the collective efforts of

NES coordinating partners JAMPRO, the Jamaica Exporters’ Association and the Trade Board Ltd., with the resulting document intending to operate as a road map for the development of local exports.

Each priority sector and cross cutting area identified has been fortified with focused initiatives, realistic timeframes, cost-effective budgets, responsible agen-cies and objectively verifiable indicators, all in pursuit of increasing levels of spec-ificity and accountability, which is critical to the implementation of each and every one of the initiatives for all five priority sectors and cross cutting areas.

The export driven role that the NES plays in the expansion of our economy is a necessary one as it underpins the need to have a dedicated set of initia-tives grounded in the ultimate objective of increasing the contribution of our export sectors to the GDP. Let us make a concerted effort, private and public sector, to support the imple-mentation of this next phase of the National Export Strategy so that Jamaica can realise the export growth it is capa-ble of.


MESSAGES MESSAGES

DIANE EDWARDSPRESIDENT, JAMPRO

MessageJAMPRO, as one of the key partners of the NES, continues to believe that the concerted effort of a National Export Strategy is crucial to developing a market-driven and globally competitive export sector, and further believes that any such Strategy must reflect the input and concerns of the stakeholders it has been designed to benefit. As such, in developing this Strategy, JAMPRO and its partners sought wide consultation to ensure just this. In addition, the Strategy is aligned with existing national develop-ment plans such as Vision 2030 and the Logistics Hub Initiative to ensure that the efforts towards export develop-ment are bolstered by a national thrust in the same direction, which also ensures efficiency in the use of our national resources as much as possible.

The NES is similarly aligned with JAMPRO’s commitment to national export development and promotion, an objective which continues to play a defining role in all of our organization’s activities and a measuring stick with which we assess our contribution to the well-being of the economy. Overarch-ing goals such as export growth require broad strategies and granular initiatives, and JAMPRO has proven its aptitude and appetite for both with programmes such as Export Max and FINPYME Export-Plus, both of which are aimed at enhanc-ing the competitiveness of exporters and export ready firms in order to take

advantage of export market opportuni-ties.

In addition to the export focus of programmes such as these, they have also been specifically designed with micro small and medium enterprises in mind, recognizing that their growth will provide an important engine for the country’s productive sector, both of which require the sort of value chain enhancing strat-egies that can be found within the NES. The National Export Strategy therefore provides the much needed platform for the unification of these efforts and calls for explicit national collaboration to further support Jamaica’s fundamental aim of growth through exports.

At JAMPRO, we believe that Phase II of the NES presents a promising and necessary next step in the direction of a bright, export led future for Jamaica, and through this intense collaboration we are confident that the Strategy success-fully addresses the needs of the export sector through a detailed and informed approach which assures our export industries a stable platform for growth and development. We look forward to its implementation and the continued partnership between the public and private sector as we relies export-led growth for Jamaica.

Since its initial inception in 2009, the National Ex-port Strategy (NES) has represented an important opportunity for the private and public sector to work together to implement the activities necessary for Jamai-ca to maximize its exporting capacity for the ultimate goal of economic growth. Phase II of the NES, which will run from 2015-2020, is intended to build on this collaborative approach towards realising export-led growth by im-plementing precise, targeted initiatives with measurable outcomes across select priority sectors and cross cutting areas. The initiatives are identified to ensure that the country can see some short to medium terms wins in the key area of export.

MARJORY KENNEDYPRESIDENT, JAMAICA EXPORTERS’ ASSOC.

MessageAs one of the lead implementing orga-nizations that have been involved in the process from the very beginning, the Jamaica Exporters’ Association is espe-cially pleased Phase II of the National Export Strategy is now underway. The JEA has been committed from the beginning because we believe whole-heartedly in Jamaica, in the fantastic Jamaican products that we offer the world, and the highly skilled and quali-fied professionals that we have who offer their services to the world. For this reason the JEA has remained commit-ted to the development of a National Export Strategy to guide the develop-ment of Jamaica’s export sector. The JEA still believes that the National Export Strategy is a critical tool for Jamaica’s Export Sector as we seek to ensure the competitiveness of Jamaican firms while enhancing the business and trade environment. Brand Jamaica continues to be a strong brand. However, despite the opportu-nities in the export market for Jamaican products, our exporters continue to face an uphill battle as we are confronted with competition from products which Jamaican exporters have introduced to the market, various market entry requirements, and non-tariff barriers, in addition to constraints and bureaucra-cies locally. As the competition in the global market increases and economies

contract, many of our major export partners are implementing additional measures to protect their economies and markets. It therefore becomes even more important for small countries such as Jamaica to put in place the strat-egies necessary to diversify our export markets; build the competencies of indi-vidual firms to maximize growth oppor-tunities; increase export promotion; and remove the bureaucracies which cause delays in the export process. The successful implementation of the National Export Strategy in the shortest possible time will require the concerted and committed efforts of all stakehold-ers. Through the National Export Strat-egy the JEA anticipates outcomes which will realize improvements in the busi-ness environment, increase job creation, increase the competitiveness of Jamaican firms, increase the market and market share, and ultimately increase the export sector’s contribution to the Jamaican economy.

The National Export Strategy is of vital importance to the growth and develop-ment of the Jamaican economy and as stakeholders it is therefore important that we are coalesced to ensure the implementation of the critical initiatives identified. The national export strat-egy is for all Jamaicans. For all individuals and firms which are currently exporting, as well as those which will someday be exporting.


EXECUTIVE SUMMARYMESSAGES

VICTOR J.N. CUMMINGSTRADE COMMISSIONER

Jamaica knows that engagement around the world is vital to its trading future. If we want to create the jobs that are needed, we must gain access to overseas markets. The Trade Board Ltd (TBL) will renew its commitment to work with other trade related agencies, as well as the private sector, to reduce red tape, improve transparency, and simplify customs documentation and procedures in order to reduce the costs of doing business and the time needed to make trade happen in Jamaica.

These steps will help all businesses, but they will be of particular importance to small and medium-sized enterprises. These enterprises are the backbone of Jamaica’s economy, and they are the incu-bators for talented individuals and the transformation of good ideas into viable business ventures. Through the National Export Strategy, TBL will be looking for every opportunity to help these busi-nesses and their workers succeed. We recognize that Jamaican workers, farm-ers, manufacturers, and service provid-ers face different challenges today than they have in the past. Therefore, further engagement with our stakeholders and trading partners gives us the opportu-nity to identify gaps in our trading regime which will assist in charting the course for the future.

As history has demonstrated, it is never too early to plan for the future, and small steps can yield big gains. Today, we have the benefit of experience and achieve-ment. And we know the benefits trade can bring. It is up to us to seize the opportunity. I invite all to join Jamaica and the Trade Board Limited as we work to do so.

Message

With the support of the Common-wealth Secretariat, Jamaica is embarking on the development of a second National Export Strat-egy for the period 2015 to 2019. Encompassing targeted strategic interventions in key sectors, the National Export Strategy II (NES2) is critical to Jamaica’s growth and development, creating more jobs and earning much-needed foreign exchange.

However, for any real effect to take place, the NES2 must be aligned to other national poli-cies, initiatives and plans, including Vision 2030 Jamaica, the Services Sector Strategy and Expansion Plan, the National Linkages Strat-egy, the Micro, Small and Medium

Enterprises and Entrepreneur-ship Policy, the ACP Strategy, the dynamic work being carried out by the National Competitiveness Council and the Logistics Hub Initiative of the Ministry of Indus-try, Investment and Commerce, as well as the various trade agree-ments and initiatives of the Minis-try of Foreign Affairs and Foreign Trade. Other important policies and initiatives impacting on the NES2 are the National Growth Agenda, the Industrial Policy, the Diaspora Policy (now being devel-oped), the new Foreign Trade Policy (now being developed) the International Migration and Devel-opment Policy, and the Investment Policy (now being developed).

Executive Summary

...for any real effect to take place, the NES2

must be aligned to other national poli-cies, initiatives and

plans...


EXECUTIVE SUMMARY EXECUTIVE SUMMARY

In addition, research and analysis, as well as consultations with stakeholders determined that ten key success factors were required for the NES2. These success factors are of

paramount importance for the NES2 to deliver the real results that are required and expected. The ten success factors are:

In addition, research and analysis, as well as, consultations with stakeholders determined that ten key success factors were required for the NES. These success factors are of paramount importance for the NES to deliver the real results that are required and expected. The ten success factors are:

KEY SUCCESS FACTORS

• A MARKET-DRIVEN APPROACH – stakeholders must focus on what the markets want rather than be supply-side focused. Key requirements include access to market intelligence, capac-ity building and a shift in mind-set, particularly towards moving up the value chain and also exploring non-traditional markets and products.

• Foreign Trade Policy and Market Access – Jamaica has been committed to building market access through the development of a range of foreign trade policy and agreements, which are indis-pensable to the success of the National Export Strategy.

• A STRONG COUNTRY BRAND – the Jamai-can brand has significant ‘muscle’ and is easily

recognised internationally. However, more needs to be done to leverage the power of the Jamai-can brand. Branding has not been set aside as a priority crosscutting issue, as Brand Jamaica has its own dedicated strategy which will drive cohe-sion, recognition, accountability and profitability from the use of the brand. It is nonetheless a key success factor to which the NES2 is aligned.

• SUSTAINABILITY – a triple bottom line approach focusing on social, environmental and economic issues is needed for the NES2, as reflected in a number of the interventions in the Strategic Action Plan. The social and environmental issues must not be neglected through a narrow focus on the economic issues.

• AN INTEGRATED APPROACH TO IMPLEMENTA-TION – the NES2 is not a stand-alone initiative. It must be complementary to other national initia-tives including, among others, the Vision 2030 Jamaica – National Development Plan as well as the Logistics Hub Initiative and the National Growth Agenda, to name a few.

Priority Sectors Crosscutting Issues

• Agro-Processing / Agro Business;

• Film and Animation;

• Information Technology Enabled Services (ITES);

• Light Manufacturing; and

• Mining.

• Export Financing;

• Logistics and Trade Facilitation;

• Market Access and Trade Information;

• Standards and Quality Management (including

Packaging and Labelling); and

• Capacity Building.

• STRONG STAKEHOLDER INVOLVEMENT – For the National Export Strategy to be successful, stakeholders must be involved at all stages and take ownership – not just of the results, but of the processes including implementation.

• EXCELLENT INSTITUTIONAL SUPPORT - The high level of organisation, priority and focus given by JAMPRO, the Jamaica Exporters Asso-ciation and the Trade Board Ltd. as well as other partners is indispensable to the success of the National Export Strategy design and implemen-tation. Without these implementing and moni-toring agencies important NES2 outcomes will not be realised.

• A DISTRIBUTION-ORIENTED FOCUS – Distribu-tion channels have a key role to play in increasing the quality and quantity of exports and driving competitiveness and thus are critical to the NES2 process. In addition, the influence of the Internet, particularly e-commerce, cannot be ignored as a key distribution mechanism.

• WOMEN AND THE YOUTH – For the NES2 to be

truly integrated and aligned with the overall vision and objectives of the Government of Jamaica, it must include various dimensions of society that are in most need of attention. Women and the youth must be capacitated to fully participate in the economy and no development plans can be complete without addressing their needs.

• MEASURABLE RESULTS – The NES2 is results-ori-ented and measurable. Actions are broken down into bite-sized pieces. The NES process defines practical objectives, clever and competitive strat-egies, targeted actions to well-defined issues, and implementation guidelines to ensure success.

Based on these success factors, a robust methodologi-cal approach was defined in order to ensure success. In this regard a number of methodologies and tools were employed to achieve the objectives of the NES devel-opment process. One of the cornerstone methodolo-gies employed was extensive stakeholder consultation. A number of stakeholders were consulted prior to and during the NES development process through interviews, one-on-one meetings and focus group sessions. In addi-tion, a Validation Workshop was held on January 21st and 22nd 2015, where stakeholders had the opportunity to pro-actively engage in the action planning process. Subse-quently, stakeholders have been given an opportunity to review the draft National Export Strategy document and provide comments and feedback, which were taken into consideration in finalising the strategy.

A key methodology was visioning. The vision for the vari-ous priority sectors and crosscutting areas, as well as the overall vision for export development in Jamaica were crafted based on consultations with stakeholders and review of other strategic initiatives and policies. Some of the specific visions were taken directly from the National Export Strategy 2010-2013. Others were adapted from the Vision 2030 Jamaica – National Development Plan. All vision statements however, were reviewed by stakehold-ers and confirmed at the Validation Workshop. Stake-holders were also given the opportunity to offer feedback during the strategy finalisation process. An overview of the vision for the National Export Strategy 2015-2019 is presented in the figure below.



Jamaica, a leading per capita export country known for its commitment to creativity,

innovation and exceptional quality

Vision for the National Export Strategy 2015-2019

Individual Vision StatementsPriority Sectors

Agro-processing & Agro Business

Information Technology Enabled Services (ITES)

Film & Animation

Light Manufacturing

A dynamic, vibrant, market-led sector making high value-added, world-class products desired by consumers everywhere, using appropriate technologies and environmentally sustainable processes, linked to other sectors, with motivated, produc-tive employees, within an enabling business and regulatory environment

A globally competitive ITES sector that is widely accessible and makes the greatest possible contribution to the social and economic development of Jamaica

Jamaica’s Creative Industries as a major contributor to sustainable economic development; with respect for our intel-lectual property from which we optimise financial benefits globally

A flexible, robust and internationally competitive light manufacturing sector defined by market intelligence and technological innovation, and bolstered by strategically leveraging Jamaica’s comparative advantages to increase productivity and to foster greater export orientation in the manufacturing sector overall.

Mining

A world-leading minerals sector, efficiently leveraging all endowments and capabilities to deliver sustained economic viability based on value-added products, disciplined and responsible environmental steward-ship, and enlightened commu-nity engagement, reinforced by an overriding commitment to health and safety

The aim of the National Export Strategy 2015-2019 is to help guide the development of priority sectors’ towards the achievement of the national economic goals of Jamaica. While the Jamaican economy appears to be performing less than favourably, signs of improvement are bearing witness to the government’s commitment to the development of a robust economy in the long-term. Consider that the nation’s debt burden is being managed through a partnership between the government of Jamaica and the International Monetary Fund (IMF); infla-tion is at single-digit levels and is currently at its lowest in recent history; unemployment, while still high, is starting to approach manageable levels; and both the IMF and the World Bank predict a stabilisation of the economy with expected growth rates of between one and two per cent between 2015 and 2016.

Building on its New Trade Policy and on the strategic focus

of the country to grow in trade competitiveness, a range of trade agreements has been established from which Jamaica currently benefits. These include agreements with key partners such as, the USA (CBI/CBERA), Canada (CARIBCAN) and the European Union (EPA), as well as the revised treaty establishing the CARICOM Single Market Economy (CSME). Other agreements include the CARICOM-Venezuela Trade and Investment Agreement; the CARICOM-Costa Rica Free Trade Agreement (FTA); the CARICOM-Colombia Trade, Economic and Technical Cooperation Agreement; CARICOM-Dominican Repub-lic Free Trade Agreement and the CARICOM-Cuba Trade and Economic Cooperation Agreement. These trade agreements provide a range of opportunities for Jamaican exporters. However, many exporters and busi-nesses, particularly the MSMEs, are either not aware of, do not fully understand or appreciate the extent to which they can utilise and benefit from these trade pacts.

Export Financing

Market Access and Trade Information

Logistics

Capacity Building

To build robust financial services to adequately support the develop-ment of a competitive export-driven economy

To ensure that exporters become more competitive by maximising and exploiting the opportunities created by existing trade

regimes and agreements and to become more market-focused through increased access to sound market intelligence.

Creating a Logistics-centred economy for greater trade competitiveness

Developing high quality human resources through capacity building in order to drive export competitiveness

Standards and Quality

Delivering consistently high quality goods and services,

improving competitiveness in regional and global markets.

Individual Vision StatementsCrosscutting Areas



The export sector, particularly services, has been mirroring the positive trends of the overall economy and the impact of trade policy to boost competitiveness. However, over-all export levels have not yet returned to pre-recession levels (total exports of US $4 Billion in 2014 compared to US $5.2 Billion in 2008). Services exports, at US $2.8 Billion in 2014, have reached pre-recession levels and is growing at a stable pace. The export of goods is lagging behind at US $1.2 Billion in 2014 compared to US $2.4 Billion in 2008.

While the economic and export performance of Jamaica is reflective of systemic issues there are also a number of global trends that impact on the achievement of economic goals. The global economy is experiencing rapid and radical transformations that are driven largely by the powerful consumers on the demand side and by system-wide advancements in technology on the supply side. There are also other frame conditions that are to be considered such as global warming, volatile cost of energy, economic recession, and political instability of the Middle East, terrorism and the threat of war in the Gulf region. However, it is the consumer that is driving change.


innovation and exceptional quality.

A paradigm shift is taking place that is affecting all econ-omies, sectors and industries. The paradigm shift creates more opportunities, but considerably more uncertain-ties. The rules of the business are changing; and they are changing for everyone, everywhere. Jamaica has not remained unscathed. To stay ahead of the game, Jamaican entrepreneurs need to understand the key global trends and the new rules of competitive success. The new para-digm strongly demonstrates that customers are in control and therefore, to win, suppliers need to understand these customers and respond with surgical precision to their needs. Therefore, Jamaican suppliers need to be more demand or market focused and less supply driven.

Consumers are no longer ‘takers’ but are increasingly driv-ing economies. They are more knowledgeable, demand-ing, educated and sophisticated. With rising income levels and a growing middle class in many emerging economies, consumers’ preferences are becoming more discerning. In addition, consumer markets are becoming more and more heterogeneous, giving rise to the need to be more segmented and niche oriented, which presents both chal-lenges and opportunities for Jamaica.

In addition to consumer shifts, the rapid transformation in technology has revolutionised the way we conduct business, interact with each other, search, share informa-tion, spend, shop, buy and sell. Consider that it is not just a single technology being used in a single sector or industry, but a whole system of technologies being rapidly diffused (computer, Skype, Internet, electronic brochures, back office systems, computerised systems, social media,

etc.) across all sectors and industries. It is also not a single sector being affected or a single type of business that is using the technology, but ALL sectors, industries and suppliers – agro-processing, agro-business, manufactur-ing, film and animation, mining, information technology enabled services, tourism, financial services, logistics, etc. And most critically, the consumers are also users. The Internet in particular, (with over 2 billion internet users worldwide), has impacted significantly on the way we do business today. For instance, distribution through e-com-merce is now a must for many businesses.

The global market and consumer trends have been taken into consideration in crafting the strategies and actions for the priority sectors. The strategic initiatives cannot only be ‘inward looking’ but must reflect what is happen-ing in the external markets as well. It is on this premise that the National Export Strategy is built.

In addition, Jamaica needs to move up the value chain and take advantage of the opportunities that the frac-turing of production across the globe creates. While the lower end of the value chain is relatively developed and of course more can be done to further develop these areas, there are many untapped opportunities higher up that have not been fully grabbed by the productive sectors. High value creation is one of the elements of the NES2 – organic and fair trade for agri-processing/agro business; knowledge process outsourcing for ITES; outsourcing services and non-entertainment services for animation, to name a few.

Priority Sectors Priority Sectors Priority Sectors Priority Sectors Priority Sectors Priority Sectors Priority Sectors Priority Sectors Priority Sectors Priority Sectors Priority Sectors Priority Sectors Priority Sectors Priority Sectors Priority Sectors Priority Sectors Priority Sectors Priority Sectors Priority Sectors Priority Sectors Priority Sectors Priority Sectors

Priority Sectors Priority Sectors Priority Sectors Priority Sectors Priority Sectors Priority Sectors Priority Sectors Priority Sectors Priority Sectors Priority Sectors Priority Sectors Priority Sectors Priority Sectors Priority Sectors Priority Sectors Priority Sectors Priority Sectors Priority Sectors Priority Sectors Priority Sectors Priority Sectors Priority Sectors

Part1BACKGROUND


Part 1 – Background and Introduction Part 1 – Background and Introduction

Background

The Commonwealth Secretariat is supporting the Government of Jamaica (GoJ) through the Jamaica Promotions Corporation (JAMPRO) to develop its second National Export Strategy (NES2) 2015-2019. Jamaica’s first National Export Strategy (NES) 2010-2013, was launched in 2009 with the objective of increasing Jamaican exports in the global marketplace.

Encompassing targeted strategic interventions in key sectors, the National Export Strategy is critical to reducing Jamaica’s trade deficit. Successful implementation of the targeted interventions under the first NES were expected to result in increased foreign exchange

earnings, an improved export to GDP ratio from 19 to 30 per cent and an increase in the contribution of the export sector to overall employment, inter alia. These high-level objectives of the NES were aligned to the National Develop-ment Plan, Vision 2030 and Jamai-ca’s macro-economic framework that provided an agreed and trans-parent roadmap for the export sector to flourish through opera-tionalisation of its Strategic Action Plan.

The First National Export Strategy ensured alignment of all national initiatives. Similarly, the second National Export Strategy 2015-2019 is not a stand-alone initiative

...the National Export Strategy 2015-2019 is complementary to other initiatives

including the Vision 2030 Jamaica...

1 aimed at driving Jamaica’s export growth. Jamaica has a number of well-developed institutions that manage a range of initiatives and projects that operate in a co-ordi-nated manner. In this regard, the National Export Strategy 2015-2019 is complementary to other initiatives includ-ing the Vision 2030 Jamaica, the Services Sector Strategy and Expansion Plan, the National Linkages Strategy, the Micro, Small and Medium Enterprises and Entrepreneur-ship Policy and the Agriculture Commodities Programme.

Most importantly, the second National Export Strategy 2015-2019 is aligned to the Logistics Hub Initiative of the Ministry of Industry, Investment and Commerce as well as the various trade agreements and initiatives of the Ministry of Foreign Affairs and Foreign Trade includ-ing the 2001 New Trade Policy, which is under revision. Other important policies and initiatives impacting on the National Export Strategy are the National Growth Agenda, the Industrial Policy, the Diaspora Policy (now being developed), the International Migration and Devel-opment Policy, and the Investment Policy.

In addition to being aligned to national initiatives, stake-holders strongly believed that the National Export Strat-egy 2015-2019 should adopt a targeted and focused approach in order to ensure greater probability of success. In this regard, five priority sectors and five crosscutting areas were selected and agreed upon by stakeholders during the review of the National Export Strategy 2010-2013.

The priority sectors which have been identified for the NES2 are not only of critical significance to the Jamai-can economy, but they also address areas not currently targeted directly by other initiatives. Developments and activities in the priority sectors aim to add value and complement existing initiatives, rather than duplicating effort. Several stakeholder consultations facilitated by JAMPRO and partner institutions, namely the Trade Board Limited, the Jamaica Exporters’ Association, the Jamaica’s Manufacturers Association, also confirmed the need to focus on the target sectors.

The target priority sectors are:

• Agro-Processing / Agro Business;• Film and Animation;• Information Technology Enabled Services (ITES);• Light Manufacturing; and• Mining.

In addition to the target sectors listed above, several crosscutting issues were identified and agreed upon – areas that have the potential both to block the priority sectors’ potential as well as to underpin the sec-tors’ success. The crosscutting issues identified include:

• Export Financing;• Logistics and Trade Facilitation;• Market Access and Trade Information;• Standards and Quality Management (including Packaging and Labelling); and• Capacity Building.



Brief Review of the National Export Strategy

The first National Export Strategy 2010-2013 (NES 1) was developed in 2009 as a set of initia-tives aimed at increasing Jamaican exports. Imple-mented over a three-year period (April 2010 to March 2013), the Strategy, which highlighted Crosscutting Industry Strategies and Priority Indus-try Initiatives, methodically sought to competi-tively reposition Jamaica’s exports in the global economy. NES 1 was seen as a key solution to reducing Jamaica’s trade deficit through targeted interventions in key sectors and across key areas of commonality.

NES 1 was used to guide strategic interventions to achieve initiatives under the vision of making Jamaica a leading per capita export country known for its commitment to creativity, innovation and exceptional quality. By focusing on sustainable projects the NES sought to establish a highly-de-veloped export sector, thus re-positioning Jamaica

as a competitive trading partner. The backbone of NES 1 was its commitment to strengthening Jamaica’s economy, supporting job creation and ensuring long-term, sustainable economic growth.

The first NES involved a total of three hundred and twenty-five (325) actionable initiatives to be implemented by April 2013. Of the total 325 initiatives, 29% were crosscutting in nature while 71% were priority sector initiatives. There were 53 crosscutting initiatives implemented while 25 were in progress and 15 were not implemented. Of the 232 priority sector initiatives, 152 were imple-mented while 43 were in progress and 37 were not implemented. Therefore, the percentage of implemented initiatives was higher for the priority sectors (66%) compared to the crosscutting areas (57%). Overall, 63% of NES Initiatives were imple-mented.

2010-2013

2Table 1 below provides a summary of the major targets and the level of achievement for each area over the three-year period 2010 to 2012.

TargetResults

2010 2011 2012

Increase export sector contribution to GDP to one-third by 2013

10.1% 11.0% 11.5%

Attain higher value addition in all priority industries (at Constant Prices ($Million):

- Agriculture, Forestry, Fishing 43,818.2 48,113.3 49,376.6

- Mining and Quarrying 14,968.6 17,872.0 16,246.5

- Manufacturing 53,167.1 53,609.2 51,597.2

Increase the current value of non-traditional exports of goods by 2013 through increased volumes and higher value addition. Value of

non-traditional exports -

US$599.1 m US$674.7 m US$ 828.3 m

Increase the contribution of service exports as a percentage of overall exports with par-ticular emphasis on developing professional

services and creative industries

Little or no growth – Flat performance



Maintain a ‘competitiveness mind-set’ at all levels to ensure the reliability and sustain-ability of the industry. Global Competitive-

ness Indices were received as follows:

Ranked 95 out of 139 countries



Reduced public debt/GDP ratio by fiscal consolidation and elimination of budget

deficit by 2010/11. Public debt/GDP ratios were as follows:

January 2011 – 131.6%

January 2012 – 138.9%

January 2013 – 145.8%

Private sector led growth through the expansion of capacity in the manufactur-ing and export industries. Increase in job

creation in the manufacturing and export in-dustries. Overall Labour Force participation

rate as follows:

62.4% 62.3% 62.7%

Table 1 | Results Achieved Under NES 1



TargetResults

2010 2011 2012

Prudent monetary policy to reduce inflation expectations and maintenance of adequate foreign exchange reserves to underpin con-

fidence in the national currency. Inflation rates (according to caricomstats.org) were

as follows:

12.6% 7.5% 6.9%

Enhanced business climate and a reformed tax system to increase efficiency and effec-

tiveness: Higher revenue collection. Tax Revenue (April to December each year)

were as follows (J$ Million):

196, 355.7 206, 269.9 236, 577.8

However, in spite of the relatively good implementation rate of NES1 and the number of forward-looking policies, studies and initiatives that were developed, the national economy is not growing at the desired pace. High levels of debt, double-digit unemployment levels, a number of social ills, such as crime, not to mention the relatively slow progress with respect to environmental development, all point to continued challenges at the macro level.

The key challenge is to determine what can be done differently to effect real and lasting change. In this regard, the National Export Strategy 2015-2019 must be highly strategic in nature and must also act as a catalyst to drive and deliver growth.

However, there is an apparent low level of buy-in from the established private sector, on the one hand, and a lack of large-scale investors that will drive growth in the Special Economic Zones and the Logistics Hub, on the other.

One of the key requirements of the established private sector is MSME partnership and support. The existing private sector has a crucial role to play in growing the productivity and competitiveness of smaller businesses and need to buy-in to this role. A stance of collabora-tion and cooperation must be taken as opposed to mere

competition. The mechanisms to address these issues are addressed in the National Export Strategy. There are a lot of ‘push’ factors (training, capacity building, supply clus-ters, standards and knowledge of trade regimes and how to overcome non-tariff barriers, etc.). However, the ‘pull’ on the part of the established private sector to engage these MSMEs is lacking. It is for this reason that the NES will attempt to develop incentives for the private sector for them to take appropriate action in this regard.

With regard to the work on the green economy, what is required is a changed mind-set. The environment must be seen as a productive sector, capable of generating employment and income. Just as the creative industries are now seen as an opportunity, the environment has to be viewed in a similar vein. The environment has to be seen and measured as a productive sector and an integral part of any growth strategy for the future. Jamaica’s Vision 2030 addresses this issue in some detail. While there are initiatives aimed at greening, and these are themselves valuable (e.g. the move away from fossil fuels), there is a need to start thinking about where the business will come from, and how to attract/cluster these environmen-tal industries in the SEZs – to deliver cost competitive solutions not only for Jamaica, but also for the Caribbean and Latin American region.

Vision

This vision is completely consistent with the Vision 2030 Jamaica – “Jamaica, the place of choice to live, work, raise families and do business”. Furthermore, the vision was reviewed by stakeholders at the Validation Workshop and received full consensus in moving forward with the National Export

Strategy 2015-2019.

3The overall vision for Jamaica’s export sectors as articulated in the National Export

Strategy 2010-2013 and which will continue for the current NES is as follows:


innovation and exceptional quality.

The main purpose of the NES is to implement initiatives that would accelerate export growth, create jobs and increase revenues. In this vein, the NES seeks to achieve its overarching goal of “improving Jamaica’s export performance by advancing the competitiveness of firms and sectors, while enhancing the business and trade environment”.

The National Export Strategy (NES) was designed as a practical roadmap for Jamaica to achieve increased levels of economic development by focusing its limited but valuable resources on developing export capacity in those priority sectors for which Jamaica has the greatest poten-tial for export development.

The specific goals and expected targets from effective delivery of the National Export Strategy 2015-2019 are as follows:

• Build a stronger economy through a robust export sector

• Grow exports within identified priority sectors

• Grow non-traditional exports

• To move the economy up the value chain through higher value-generating export activities

• Increase penetration of existing markets

• Gain access to new markets

• Build the international competitiveness of Jamaica

• Exports to be an alleviator of poverty through high-value job creation

• Attract more Foreign Direct Investment in non-traditional sectors and high-value activities

The Goals of the National Export Strategy3.1



Export performance has been anaemic and has not fully recovered since the onslaught of the 2008-2009 global economic recession. One of the key targets of the NES will be to resuscitate the export sector and encourage full recovery to pre-recessionary levels. The specific targets for the NES are as follows:

• To grow exports at an average of 15% per annum to bring export levels (dollar value) to pre-recessionary levels of 2008-2009.

• Total goods exports to reach US $2.5 billion by 2019.

• Total services exports to reach US $3.2 billion by 2019

• To grow exports from the priority sectors along the following lines:

• To grow the agri-processing / agro-business export sector by an annual average of 12% for each year between 2015 and 2019

• To reach total agri-processing / agro-business exports value of US $560 in 2019 (an increase of US $243 over 2014 output values)

• To create 8,000 more jobs in the agri-processing / agro-business sector by 2019• To grow film exports by 15% for each year between 2015 and 2019• To grow animation exports by 15% for each year between 2015 and 2019 with

focus on attracting more animation outsourcing investments• The film and animation sector is formalised and organised in terms of structure

of each sub-segment and number of firms/individuals in operation in the sector• ITES to grow by 15% per annum with focus on the higher value added areas

such as KPOs• ITES to add 18,000 new jobs by the end of 2019• To grow the light manufacturing export sector by 25%• To reach export levels of US $25 million by 2019 • To grow the non-traditional mining export sector by an annual average growth

rate of 7% between 2015 and 2019 to reach output value of US $220 million.• To add 500 more jobs in the non-traditional mining sector

Export Targets3.2 Key Success Factors of the National Export Strategy

A market-driven approach needs to be a key element in the formulation of the second National Export Strategy 2015-2019. It is critical that the NES reflect an understanding of the needs of export markets and customers, and not just focus on addressing supply-side issues, such as the high cost of electricity. It is critically important to understand the needs of the target markets and customers. It makes no sense, for example, to focus on the production of marble ashtrays, when the no-smoking trend is here to stay; or perfect-ing the production of typewriters when there is a clear preference for computers. Similarly, suppliers cannot miss the growing trend toward ‘fair trade’ products, organic and fresh produce, corporate social responsibility and triple bottom line report-ing – key elements now demanded by the more mature and demanding customers.

The National Export Strategy 2015-2019 should, therefore, not only be based on what Jamaican manufacturers want to supply, nor on improving their productivity, processes and market access, but should critically reflect what the markets want. The National Export Strategy 2015-2019 will provide key information, by priority sector that will assist stakeholders in making considered choices. How can Jamaican exporters modify and market their products in a manner that resonates with their customers?

Whereas the National Export Strategy 2010-2013 was more supply-driven in focus, the second National Export Strategy 2015-2019 needs to be driven by the market trends and developments that increasingly influence the success, compet-itiveness and profitability of businesses globally.

2015-2019

4

A Market-Driven Approach4.1



This is not to suggest that supply-side capacity constraints are not important, they are and must subsequently be addressed within NES2; however it is to recognise the pre-eminent importance of understanding consumer drivers in key traditional and emerging markets. The final consumers of the products of Jamaican exporters are more mature, more demanding, more experienced, more value-conscious and have more choice than ever before. Even the ready-made and natural Jamaican Dias-pora market (Jamaicans living abroad) is itself changing, as the children and grandchildren of earlier Jamaican settlers abroad have different taste patterns and lifestyles to their parents and grandparents. Consider also that

Jamaicans who went abroad in the 1970s and 1980s had more ‘refined’ talent and education than their predeces-sors. More persons were moving in the skilled and intel-ligentsia versus unskilled categories. The National Export Strategy 2015-2019 therefore needs to take account of key market changes and development that will impact on the marketing, distribution and sales of Jamaican suppliers in export markets. Export businesses will be increasingly challenged in harnessing the new customer power. They now have to know and understand the wide and varied customer base, listen to them, and provide them with exactly what they want.

1 Trade between companies in developed countries and producers in developing countries in which fair prices are paid to the producers2 Reporting on financial, social and environmental issues

Foreign Trade Policy and Market Access4.2

For Jamaica, international trade is a pillar of economic prosperity. The ratio of total trade in goods and services is estimated at 75% of GDP. Therefore, Jamaica’s foreign trade policy must play a crucial role in responding to the dynamics of the rapid and radical transformations taking place in the global economy. The trade policy also needs to influence the pace and direction of economic growth. As another catalyst of growth and export development, the National Export Strategy must therefore squarely align with Jamaica’s foreign trade regime.

From a regulatory and policy perspective, Jamaica has been committed to building market access through the development of a range of foreign trade policy and agreements. Current efforts to revise Jamaica’s National Trade Policy bears witness to the continued commitment and proac-tive approach the Government of Jamaica contin-ues to adopt. Export development cannot move ahead without effective market access that trade policy facilitates.

The revised NTP must reflect the several initia-tives underway to actively pursue new ways of approaching trade policy in the context of the rapid changes taking place in the world economy

due to globalization and liberalization. The key aim of the NTP must be for Jamaica to be more proac-tive in shaping the new rules of the international trading environment rather than passively allowing these rules to be shaped by other countries. This proactive approach bodes well for future export development.

The revised NTP must seek to facilitate the devel-opment of domestic capacity to produce goods and services by increasing domestic capital forma-tion, including both physical and human capital, as well as infrastructure. It must be aimed at enhanc-ing Jamaica’s capacity to export by promoting measures to facilitate foreign market penetration, and developing a broader export base.

Jamaica has continued to use trade policy and incentive schemes to promote specific sectors of the economy, including tourism, agriculture, mining, and manufacturing. However, the effectiveness of these incentives is open to question, as inflows of foreign direct investment (FDI) for export produc-tion outside mining and tourism are disappoint-ing, and the stagnant performance of merchandise exports could indicate underlying problems in the export sectors.

Despite considerable and continued efforts by Member States and the CARICOM Secre-tariat, the regional integration arrangement is still largely restricted to an average growth rate of 2% (2001-2013). In addition, the domestic economy has been characterized by a narrow export (goods) base; concentrated export markets; a weak manufacturing sector; a diminishing mining sector; slow growth of the services sector (excluding tourism); improving international competitiveness (both in terms of the Jamaican brand and the Global Competitiveness Index) and a greater focus on existing bilateral trade agreements as expressed in the NTP.

Consequently, increasing intra-regional trade, as well as making better use of the export opportunities provided by existing bilateral trade agreements and increasing Jamaica’s share of global exports, are important next steps for the National Export Strategy. With regard to regional trade, Jamaica continues to play a leading role, working with international development partners (IDPs), in strengthening trade complementarity between individual CARICOM countries.

The regional market is still largely untapped. As a lead player in CARICOM, Jamaica is in a position to take advantage of intra-regional trade. For all of the priority sectors CARICOM will remain a key market for Jamaica.

CARICOM Intra-Regional Trade and Bilateral Trade Agreements

4.2.1



A Strong Country Brand

A Sustainability Driven NES

4.3

4.4

The Jamaican brand has significant ‘muscle’ and is easily recognised internationally. Icons such as Bob Marley and reggae music, Usain Bolt and known local brands such as Sandals and Grace Kennedy add to the country’s brand muscle.

In 2014, Jamaica was considered the strongest brand in the Caribbean region. Out of 118 coun-tries, Jamaica ranked 51st with a 65% international recognition and awareness rate, according to FutureBrand’s Country Brand Index 2014-2015. Jamaica was ahead of countries such as Turkey (53rd), Mexico, (55th), Columbia (68th) and Nige-ria (75th). Jamaica was lagging behind countries such as Brazil (43rd), India (50th), Costa Rica (37th) and Puerto Rico (33rd). No other CARICOM country made it on the top 75 list. Japan, Swit-zerland, Germany, Sweden and Canada were in the top five. USA was ranked as number 7. The country brand index is based on six criteria – the ‘Made In’ strength, the country’s value system, qual-ity of life, business potential, heritage and culture, and tourism as well as the overall perception and

awareness of the brand. Jamaica scoring highest in the CARICOM is a strength that needs to be further developed.

It is therefore, crucial for exporters to exploit and benefit from the power of the Jamaica brand. The NES 2010-2013 identified branding as a cross-cutting issue. While it has not been so identified under the NES 2015-2019, it is an element that must be considered as a key success factor none-theless. Consider that there is an essential need for market access and penetration; branding will add the ‘muscle’ to assist in making this a reality. The Brand Jamaica strategy, which is currently under design will be an indispensable driver in transforming the way the country benefits from global awareness of authentic Jamaican goods and services. The development and promotion of the authentic Jamaican culture through a strong country brand is noted in Vision 2030 Jamaica and the National Export Strategy will seek to further support this important initiative.

The National Export Strategy 2010-2013 did not adequately deal with issues of sustainability and the environment. In this regard, a triple bottom line approach is needed for the NES 2015-2019. The triple bottom line refers to the economic, environmental and social outcomes and impacts that the NES will generate.

The importance of sustainability cannot be under-estimated, hence its critical position in Vision 2030 Jamaica, to which the NES 2015-2019 is aligned.

It is understood that this second National Export Strategy 2015-2019 is not a stand-alone initia-tive. Not only is it a continuation from the first National Export Strategy 2010-2013, but also is integrated into current and planned initiatives in related sectors and institutions. In this regard, the National Export Strategy 2015-2019 is viewed as complementary to other strategies and needs to play a major role, incorporating and integrat-ing other complementary strategies and actions, but also adding value to the competitiveness and sustainability of Jamaican exporters.

One of the more crucial documents with which the National Export Strategy 2015-2019 is aligned is the Vision 2030 Jamaica National Development Plan. Many of the priority sectors covered herein are simultaneously included in Vision 2030 Jamaica, particularly under National Outcome #12 – ‘Inter-nationally Competitive Industry Structures’. Vision 2030 Jamaica identifies Mining and Quarrying as a competitive industry and is selected as a priority sector under this NES, the exception being that the NES concentrates only on non-traditional elements within the mining sector such as lime-stone. Similarly, Vision 2030 Jamaica holistically incorporates the manufacturing sector of which light manufacturing (the focus of this NES) is a growing segment. While the NES 2 considers the agro-processing and agro business sectors, Vision 2030 broadly deals with agriculture. The agro-pro-cessing and agro business sectors are subsets of

the overall agriculture sector. In addition, while the Information Technology Enabled Services and the Film and Animation sectors are not dealt with directly in Vision 2030 Jamaica, they are covered under the Information Communications Technol-ogy sector and the Creative Industries respectively.

Many of the fundamental issues, constraints, opportunities and outcomes examined in Vision 2030 Jamaica for the respective sectors and sub-sectors are also considered in NES 2 in the respective priority sectors. Moreover, there are many issues raised under Vision 2030 Jamaica that are crosscutting in nature that impact on the respective sectors and provisions have been made within the crosscutting areas under the NES 2 to tackle these issues.

In addition, other elements of the NES are aligned to the National Outcomes identified in Vision 2030 Jamaica. Issues of women and the youth, the need for education and capacity building, using the authentic Jamaican culture as a tool for compet-itiveness, providing an enabling environment for export development, using technology as a basis for economic success, issues of sustainability, etc. are mentioned in Vision 2030 Jamaica, which are also taken into account in the NES. The table below indicates the main areas under the NES and the corresponding link to Vision 2030 Jamaica.

An Integrated Approach to Implementation4.5

...there are many issues raised under Vision 2030 Jamaica...that impact on the respective sectors and provisions have been made... to tackle these issues.



Key NES ElementAlignment with

Vision 2030 Jamaica

Agro-Processing / Agro Business National Outcome #12 - Internationally Competitive Industry Structures: Subset of Agriculture

Film and Animation National Outcome #12 - Internationally Competitive Industry Structures: Subset of Creative Industries

Information Technology Enabled ServicesNational Outcome #12 - Internationally Competitive

Industry Structures: Subset of Information Communica-tions Technology

Light Manufacturing National Outcome #12 - Internationally Competitive Industry Structures: Subset of Manufacturing

Mining National Outcome #12 - Internationally Competitive Industry Structures: Mining and Quarrying

Export Financing

National Outcome # 8 - An Enabling Business Environ-ment

National Outcome #12 - Internationally Competitive Industry Structures: Financial Services

National Outcomes # 7 - A Stable Macroeconomy

Logistics and Trade FacilitationNational Outcome # 9 - Strong Economic Infrastructure

National Outcome #12 - Internationally Competitive Industry Structures: Services (Business Services and

Distribution)

Market Access and Trade Information National Outcome # 8 - An Enabling Business Environ-ment - Trade and Foreign Relations

Standards and Quality ManagementNational Outcome #12 - Internationally Competitive Industry Structures: Services (Business Services and

Distribution)

Capacity Building National Outcome #2 – World-Class Education and Training

Branding National Outcome #4: Authentic and Transformational Culture: National Branding for Jamaica

Table 2 - NES Alignment to Vision 2030 JamaicaStrong Stakeholder Involvement

A Sustainability Driven NES

4.6

4.7

It is noted that all of the stakeholders are very committed and passionate about the implementation of the NES2 and it will therefore be key to ensure that they are thoroughly consulted at all levels and stages of the development and implementation of the NES2. Stakeholders must be involved and take ownership – not just of the results, but of the processes, including implementation. The critical involve-ment of the private sector and not merely the NES2 partners and support organisations is strongly recommended. This perspective formed the basis for the NES2 Validation Workshop, which took place during January 21-22, 2015.

The NES 2015-2019 Secretariat comprises JAMPRO, the Jamaica Exporters Association and the Trade Board Limited. These institutions will play an important role in driving the operationalization of the NES 2015-2019 and the overall export development process in Jamaica. Their partnership also plays a major role in terms of mustering NES2 support and buy-in from the businesses that they serve.

Functioning under the Ministry of Industry, Invest-ment and Commerce, JAMPRO’s main mandate is to stimulate, facilitate, and promote the devel-opment of trade and industry, and export and investment activities in all sectors of the economy. With regard to trade and export, JAMPRO offers a range of export-related services and export development tools that positively impact the export performance and competitiveness of exist-ing and potential exporters. The recent decision to revise the organizational structure of JAMPRO to mirror the priority sectors is indeed a step in the right direction and bodes well for the success-ful implementation of Jamaica’s 2nd National Export Strategy.

A trade policy agency of Ministry of Industry, Investment and Commerce, the Trade Board Limited’s primary vision is “to be a national focal

point for support of modern commerce through trade regulation and being a repository for and disseminator of national, regional and international trade-related information.” Its primary focus is to facilitate domestic, regional and international trade amongst businesses in Jamaica. It is also responsible for the issuance of export and import licenses as well as certificates of origin under most of Jamaica’s trade agreements. The Trade Board also plays a key role in developing and promoting e-transactions within a secure framework.

The Jamaica Exporters’ Association is a non-gov-ernment members’ association committed to facil-itating the growth of Jamaica’s exports through the establishment of a network of Export Centres and Business Information Points (EC/BIPs) across the island as a centralized system of information to positively impact national export performance and competitiveness.

It must also be noted that other private sector organisations such as the Private Sector Organi-sation of Jamaica and the Jamaica Manufacturer’s Association, to name a few, have a role to play in the further development of exports in Jamaica and in the implementation of the National Export Strategy.



A Distribution-Oriented Focus4.8

The notion of ‘build it and they will come’ cannot be the approach taken if Jamaica is to forge ahead to export success. It has been observed that distribution channels need to be strengthened. Therefore, a fundamen-tal consideration of the NES is to ensure that the main distribution channels are taken into account. The distribution-oriented approach will be an important success factor in increasing the quality and quantity of exports. The distribution channels have a crucial role to play in driving demand to any destination. A major finding is that the Inter-net and the various e-marketing and e-distribution channels, need to be given greater focus in export development. One must think ‘outside the box’ when considering the distribution channels. The impact and influence of the Internet and e-com-merce cannot be ignored as a fundamental distri-bution mechanism.

The Internet can play an important role in deliv-ering Jamaican products to the rest of the world. The Internet, if properly adopted, has the abil-ity to increase market penetration in a targeted approach (to consumers in Africa, North America and Europe, for example) and in a cost-effective manner. This will lead to long-term success.

This is why it is also critical to develop and institute trade brokers to act as marketing and promotions representatives in the targeted markets to facili-tate trade, identify opportunities, facilitate distribu-tor partnerships, promote Jamaican products and create awareness of the Jamaican brand. Market-ing and promotion could also be done through commercial diplomacy whereby public and private actors with diplomatic status can support business promotion between Jamaica and the host country.

Women and the Youth

Measurable Results

4.9

4.10

For the National Export Strategy to be truly inte-grated and aligned with the overall vision and objectives of the Government of Jamaica, it must include various dimensions of society that are in most need of attention. Women and the youth are particularly vulnerable. No development plan can be complete without addressing the needs of these two segments of society.

At present women account for roughly 45% of the Jamaican labour force and the rate of unemploy-ment among women is exceptionally high (18.1%). This figure is relatively high when compared to the 2013 global average unemployment rate for women (6.4%). In certain sectors the ratio of women to men is skewed in favour of men – less than 10% of the workforce are women in mining, only one-third of the workforce in the manufactur-ing sector are women, according to the Economic and Social Survey of Jamaica, 2013. The latest Enterprise Survey of the World Bank revealed that less than a quarter (24%) of the top management positions in Jamaica are held by women and that 16% of the permanent, full-time, non-production workforce are women. It is interesting to note that Jamaica ranks relatively well in terms of gender issues. According to the World Economic Forum

Global Gender Gap Index 2014, Jamaica is ranked 52nd out of 142 countries.

In addition to women, young people are critical for development. The youth are the future of the country and long-term development must begin with them. One of the key objectives of the Vision 2030 Jamaica is that the “youth are empowered to contribute meaningfully in building and strength-ening the communities to which they belong”. However, the youth face challenges. For exam-ple, unemployment among youth (ages 15-24) is currently more than twice the national rate. Some 142,000 youth were outside of the education system and labour force. The large proportion of youth in Jamaica’s working age population pres-ents an opportunity for development. It is there-fore, essential that the capacity of this group be sufficiently built.

The ultimate goal of the NES to increase economic activity and create jobs will no doubt contribute to development between these two sectors of soci-ety (women and youth). However, key strategic initiatives must be developed to ensure that this becomes a reality.

In meeting with the stakeholders, virtually all of them indicated that one of the short-comings of the first NES was that many of the initiatives were neither actionable nor measurable. The NES 2015-2019 is designed to be results-oriented and measurable. Actions are broken down into bite-size pieces. The NES 2015-2019 defines practical objectives, clever and competitive strategies, targeted actions to well-defined issues, and implementation guidelines to ensure success. These are the hallmarks of the NES 2015-2019 as emphasised by the NES partners and stakeholders.

In addition, the establishment of a robust M&E structure incorporating key implementing and monitoring agencies is needed to ensure a high success rate of the NES. The National Competitive-ness Council (NCC) will play an important role in his regard.



Methodology and Approach

Based on these success factors, it is clear that a robust method-ological approach is required in order to ensure success. In this regard a number of methodolo-gies and tools were employed to achieve the objectives of the NES development process. A corner-stone methodology in formulat-ing the National Export Strategy 2015-2019 was extensive stake-holder consultation and feed-back. A number of stakeholders were consulted during the review phase of the first National Export Strategy 2010-2013 in March 2014. The information received from the review phase formed an integral source of information for the National Export Strategy

2015-2019. In addition, a number of one-on-one meetings and interviews were carried out with export partners and stakehold-ers from both public and private sector organisations representing the priority sectors and crosscut-ting areas. A list of stakeholders consulted can be found in Annex 1.

In addition to meetings and inter-views, a two-day Validation Work-shop was conducted to capture information and insights from stakeholders in the crosscutting areas and priority sectors. With the support of the NES partners and the Commonwealth Secretar-iat, the workshop took place over

...workshops were instrumental in

developing strategies and action plans for

the NES....

5 a two-day period – January 21-22, 2015 at the Jamaica Conference Centre in Kingston. It remains vitally import-ant that the strategies, actions and projects under the National Export Strategy, have the full buy-in and support of all stakeholders. A consultative phase was therefore a necessary component of the strategy design process. The workshop and consultations provided the unique advantage of involving all participating stakeholders in the process and created high levels of “buy-in”.

The first day of the workshop was targeted to stakehold-ers in the five priority sectors – Mining, Film and Animation, Agro-processing/ Agro business, Information Technology Enabled Services and Light Manufacturing. There were an estimated 80 persons in attendance. The objective of the first day was to convey to participants the importance of having a market-driven / consumer-driven mind set and to develop strategic actions for the sector to improve global competitiveness. To achieve this, the facilitators presented on the key trends affecting the global econ-omy and the global trends, which had significant implica-tions for the specific priority sectors. The second day of the workshop targeted the crosscutting issues – Export Financing, Logistics, Trade Information and Market Access, Standards and Quality (including packaging and labelling) and Capacity Building.

The workshop was instrumental in developing strategies and action plans for the NES. Participants from the vali-dation workshop were broken into groups according to priority sectors or crosscutting issues. Group members were asked to discuss and develop suitable strategies and actions for the respective areas. These strategies and actions were subsequently analysed and tested by the NES design team and appropriate budgets, time frame, responsibilities, target beneficiaries and objectively verifi-able indicators (OVIs) were assigned.

In addition to consultations, a number of research sources and key documents were reviewed and analysed. This review and analysis was necessary to ensure that the National Export Strategy 2015-2019 took into account other national initiatives already in progress and to main-tain alignment with wider national policies, strategies and plans. A list of documents reviewed is annexed herein.

A number of other methodologies and tools were utilised including:

• The use of sector baseline data, where available• Analysis of global market and consumer trends

relevant to the priority sectors• Market Assessment• Competitor analysis• SWOT analysis• Visioning exercise• Value chain analysis• Institutional assessment • The development of a monitoring and evaluation

framework

A final opportunity was presented to stakeholders to contribute to the planning process through feedback and comments on the draft strategy document. The docu-ment was disseminated to the relevant stakeholders representing the various priority sectors and crosscutting areas. In addition, there were a few outreach sessions that were spearheaded by JAMPRO to capture comments in a streamlined and efficient manner from various groupings of stakeholders. The stakeholders submitted comments on the draft document and revisions were made to the document based on feedback received.

1 Trade between companies in developed countries and producers in developing countries in which fair prices are paid to the producers2 Reporting on financial, social and environmental issues



The Jamaican Economy

For decades, the country has struggled with low growth, high public debt and a number of external shocks that have further weakened the economy. Over the last 30 years real per capita Gross Domestic Product (GDP) increased at an aver-age of just one per cent each year, making Jamaica one of the slowest growing developing countries in the world. Jamaica’s most pressing challenge is the country’s debt, currently estimated at 141.6% of GDP as of March 2014, which has significantly hampered the country’s economic growth.

GDP (current prices) was estimated to be US $14 billion in 2014. This GDP value represented 0.02% of the world economy and averaged at US $5.36 billion per year between 1960 and 2014. GDP reached an all-time high of US $14.79 billion in 2012 and a record low of US $0.70 billion in 1960, according to the World Bank.

Jamaica’s GDP growth rate contracted by 1.8% in the third quarter of 2014 over the previous quar-ter. The average GDP growth rate was 0.09% from 2003 until 2014, reaching an all-time high of 2.20% in the fourth quarter of 2003 and a record low of -1.90% in the first quarter of 2009, according to the Statistical Institute of Jamaica.

6

Economic Performance6.1

...the National Export Strategy 2015-2019 is complementary to other initiatives

including the Vision 2030 Jamaica...

Economic performance, in terms of GDP growth, has been consistently below the regional average (Latin America & the Caribbean) and below the average of develop-ing countries. The average GDP rate (2011-2014) was 1% for Jamaica whereas the average rate over the same period was 2.5% for the region and 5.1% for developing countries. The World Bank expects the Jamaican econ-omy to pick up pace, albeit at a slow rate, and projects that Jamaica will end 2015 with economic growth of 1.1%, and 2016 with 2.2%. The World Bank projections are improvements over the 0.7% for 2012, 0.6% for 2013 and 0.9% for 2014. See Figure 1 above.

The level of unemployment also underscores the coun-try’s less-than-favourable economic performance and points to the need to target youth and women for improved employment opportunities. The unemploy-ment rate stood at an estimated 13.4% in March 2014, trending down from 15.2% at the end of 2013, according to the Statistical Institute of Jamaica. With a fairly young

population base, youth unemployment was more than twice the national rate. Young women, in particular, were affected the severest, with an unemployment rate of 38%. In October 2014, the number of persons in the labour force was 1,310,700, an increase of 6,200 (0.5%) above the 1,304,500 recorded in October 2013. The number of male workers increased by 3,500 (0.5%) from 713,500 in October 2013 to 717,000 men in October 2014. The female labour force increased by 2,700 (0.5%) moving from 591,000 in October 2013 to 593,700 women in October 2014.

The inflation rate was at a record low of 4.5% in February of 2015 and has been steadily declining over the previous months, from 9.77% in August 2014. Inflation reached an all-time high of 26.49% in August of 2008, according to the Statistical Institute of Jamaica. The significant decline in inflation is representative of the measures taken by the GoJ to improve the economy’s macroeconomic funda-mentals.

Figure 1Gross Domestic Product (% Growth Rate) for Selected Economies - (2011-2016)

Source: World Bank, 2015



The economy is heavily dependent on the exploitation of natural resources (bauxite, water, forest, land for agri-culture, the marine environment for fishing and food, and beaches for tourism). The productive sectors are stymied by a combination of high energy costs, low labour produc-tivity and the unavailability of adequate finance, particu-larly for MSMEs. The economy is characterised by low growth and high unemployment.

With the systematic development and implementation of a clear vision, sound policies and targeted strategies the country has been put on the path to growth and compet-itiveness. There are many excellent initiatives, policies,

strategies (Vision 2030 Jamaica), visionary projects (Logis-tics Hub, Special Economic Zones) being developed.

Jamaica’s skilled labour force, as well as its strong social and governance indicators, is amongst its key assets. To restore self-sustaining and job-creating growth, Jamaica will have to improve its international competitiveness, boost productivity in order to increase exports and penetrate new markets. It is also important to explore new opportunities that are more in line with international market trends.

Jamaica’s Growth Agenda6.2

Over the last three decades, the Jamaican econ-omy has experienced very low economic growth, declining productivity, and reduced international competitiveness. An important factor behind these problems has been the unsustainable debt burden, which has undermined confidence and elevated risks to economic stability. Additionally, the high debt service, at over 50% of government revenue, has limited the government’s potential to provide the services needed to achieve sustained rates of growth and increased welfare for citizens. It is in this regard that the government of Jamaica has embarked on a partnership with the International Monetary Fund (IMF) towards economic reform and growth.

The main objective of the Jamaica/IMF economic reform programme is to contain the country’s rising economic and external vulnerabilities and address economic imbalances, while putting Jamaica on a path of sustainable growth. The programme also aims to promote macroeconomic and finan-cial stability, including achieving and maintaining higher primary fiscal surpluses. The programme can help underpin debt sustainability, pave the way for private-sector led growth through the implementation of a comprehensive set of struc-tural reforms, and promote social stability through enhanced social protection for the most vulnera-

ble, such as women and the youth.

The programme involves a coordinated set of reforms to:

1. (i) strengthen public finances, including compre-hensive tax reform, expenditure rationalisation, and improved public debt management and public financial management;

2. (ii) enhance the resilience of the financial sector through strengthened supervisory, regulatory, and crisis management frameworks;

3. (iii) improve growth-generating efficiency through enhancements to the business environment, increased competitiveness, and strengthened institutional capacity and governance (including a broad legislative agenda); and

4. (iv) protect the most vulnerable and promote economic self-reliance, including the establishment of a floor on social spending, maintaining the real value of PATH (Program of Advancement through Health and Education) benefits, and expanding re-certification and the Steps-to-Work program.

Based on these reforms, the IMF projects that Jamaica will experience a gradual pick-up in economic activity and should sustain economic growth of approximately 2% between 2015 and 2016.

Mineral fuels accounted for the largest share of imports (33%) in 2014 followed by machinery and transport equipment (16.6%) and food (15.8%), according to Statistical Institute of Jamaica.

The value of imports from the major trading partner the United States of America (USA) grew by US $158.7 million or 8.4% to US $2,040.0 million during 2014 when compared to 2013. In 2014, goods from the USA accounted for approximately 38.6% of Jamaica’s total import bill, compared to 33.8% in the comparable 2013 period. At the end of 2014, the trade deficit with the USA stood at US $1,512.3 million, moving up from US $1,171.1 million in 2013, an increase of US $341.3 million.During the eleven-month period (January to November) of 2014, there was a general downward trend in the value of imports, with six of the ten commodity groups registering declines. “Mineral Fuels, etcetera” the main contributor, fell and was valued at US $1,790.1 million a decline of US $153.6 million or 7.9 per cent. The reduction for this group was mainly due to lower imports of the division petroleum, ‘petroleum products and related materials’ as well as the fall in oil prices during that period. “Food” declined and accounted for 15.8% of the import bill. This commodity declined by US $51.3 million or 5.8 per cent, to US $837.0 million, according to the Statistical Institute of Jamaica.

Imports6.3.1

Jamaica’s Trade Performance6.3

Jamaica’s expenditure on merchandise imports during 2014 fell by US $291.6 million or 4.8% to reach US $5,838.2 million when compared to 2013. Earnings from merchandise exports fell by US$128.4 million or 8.1 per cent to US $1,452.0 million. As a result, the trade deficit at the end of the 2014 review period stood at US$4,386.2 million, decreasing by 3.6 per cent or US$163.0 million when compared to the similar 2013 period, according to the Statistical Institute of Jamaica



Jamaica’s revenue earnings from export of goods and services was US $4 billion in 2014. Total exports in 2014 declined by 6.1% over 2013. Services accounted for 70% of export revenues in 2014 or US $2.78 billion and has not significantly changed its overall share of exports in the last decade (2004-2014). Total exports experienced a significant decline of 24.2% between 2008 and 2009. This decline was largely due to the global economic reces-sion taking place during that period. However, the export of goods was more significantly affected. Export of goods declined by 46% between 2008 and 2009 compared to a decline of 5% for services over the same period. However, while services exports returned to pre-recession levels, the export levels of goods are yet to fully recover. This is largely due to the lacklustre performance of bauxite and alumina, but between 2013 and 2014 declines in most commodity exports were experienced as well. See Figure 2 below.

Jamaica’s export performance has been poor when compared to other competitor econo-mies within the region and relative to the world average. The compounded average annual growth rate (CAGR) of total exports (goods and services) from Jamaica was 0.7% over the 2004-2014 period. This compared to an average of 7.5% for the world economy, 9.8% for Trinidad and Tobago, 9.2% for Barbados, 7.8% for Guyana and 3.8% for the Dominican Republic.

Exports6.3.2

Figure 2Total Exports from Jamaica (Goods and Services)

USD Billion

Source: Statistical Institute of Jamaica and United Nations Comtrade Statistics, 2015

Jamaica’s export performance has been poor when compared to other competitor economies within the region and relative to the world average. The compounded average annual growth rate (CAGR) of total exports (goods and services) from Jamaica was 0.7% over the 2004-2014 period. This compared to an average of 7.5% for the world economy, 9.8% for Trinidad and Tobago, 9.2% for Barbados, 7.8% for Guyana and 3.8% for the Dominican Republic.

Figure 3Comparative Export Performance of Jamaica to Selected Caribbean Economies

Base Year = 2004

Source: Statistical Institute of Jamaica and United Nations Comtrade Statistics, 2015



Figure 4Comparative Export Performance of Jamaica to Selected Regional Economies

Base Year = 2004

Figure 5Top Export Markets ( January-November) 2014

USD Millions

Source: United Nations Comtrade Statistics, 2015

Source: Statistical Institute of Jamaica, 2015

The top ten export markets in 2014 (Jan-Nov) were the USA, Canada, Russia, UK, the Netherlands, Iceland, Slovenia, China, France and Portugal. North American (USA and Canada) accounted for 20% of total exports in 2014, illus-trating the heavy dependence on that market. The US market experienced a decline of 24.8% between the January to November 2013 period and the same period in 2014. The top regional trading partner is Trinidad and Tobago, which accounted for 0.3% of total exports or US $12.4 million in 2014.

Jamaica’s Competitiveness6.4

While Jamaica’s export competitiveness has room for improvement, its overall competitiveness has been steadily making headway, based on the results of the Global Competitiveness Index (GCI). Jamaica has been moving up the competitiveness ranks from a position of 107 out of 144 countries in 2011-2012, to the 86th spot during the 2014-

2015 period. Jamaica was placed ahead of regional counterparts, Trinidad and Tobago (rank of 89) and the Dominican Republic (rank of 101) but lagged behind Barbados (rank of 55). The initiatives of the National Export Strategy will attempt to maintain Jamaica on a similar if not better path of compet-itiveness.

Jamaica experienced improvements in all of the key GCI indicators. Of significant note were improve-ments in health and primary education, which jumped 34 places from 106 in 2013-2014 to 72 in 2014-2015. Infrastructure also had a better rank-ing in 2014-2015 (80th) compared to 2013-2014

(93rd). Under the section on efficiency enhancers, goods market efficiency improved from a rank of 84th to 76th between 2013-2014 and 2014-2015. Labour market efficiency also moved up ranks from the 66th place to 58th over the same period. See the table below.

Figure 6Global Competitiveness Index – Jamaica

Source: World Economic Forum – Global Competitiveness Report 2014-2015



Competitiveness Indicator2014-2015

(Rank out of 144)2013-2014

(Rank out of 148)

Institutions 80 85

Infrastructure 80 93

Macroeconomic Environment 136 141

Health and Primary Education 72 106

Efficiency Enhancers 77 79

Innovation and Sophistication Factors 71 75

Table 3Breakdown of Global Competitiveness Index – Jamaica

Source: World Economic Forum – Global Competitiveness Report 2014-2015 and Global Competitiveness Report 2013-2014

Post

InitiativesWhile there appears to be a gap between NES 2010-2013 and NES 2015-2019 there have been a number of strategic initiatives and interventions of key economic significance that were continued or launched between April 2013 and March 2015. These initiatives include but are not limited to the following:

• The review of NES 2010-2013, which included extensive stakeholder consul-tations and feedback, which lead to the planning of the NES 2015-2019 and the selection of priority sectors – early 2014.

• The Jamaica Foundations for Compet-itiveness and Growth Project (US$ 50 million) aims to strengthen the business environment in Jamaica for private sector investment.

• Business Climate Reforms and Initiatives• Two credit bureaus were operationalized

in May 2013• The Banking Services Act was approved in

June 2014.• Enactment of Security Interest in Personal

Property Act (SIPP) – December 2013• National Collateral Registry Established –

Jan 2014• Single Business Registration “Super form”

rolled out – Jan 2014• Over 360 persons trained in the lending

and legal sectors on the SIPP Act (Jan 27 – 31, 2014)

• The Jamaica Foundations for Competitive-ness and Growth Project (US$ 50 million) aims to strengthen the business environ-ment in Jamaica for private sector invest-ment.

• Amendments were promulgated to the Dangerous Drugs Act early 2015 which paves the way for the establishment of medical marijuana and hemp industries in Jamaica

• The Mobile Business Clinic Initiative was launched by JBDC late 2014 to deliver business development and regulatory services across Jamaica.

• Launch of the Small Business Development Centre (SBDC) Initiative in January 2015

• Four pieces of legislation are beibng support the promotion of Jamaica as an international financial services centre. This legislation is scheduled to be approved in FY 2015/16

7

2010

- 201

3



• • Funding from the World Bank was secured to

ensure timely reform of the National Quality Infra-structure and the first set of reform measures have been submitted to Cabinet (June 2015)

• Sector Initiatives and Programmes

• The Rural Economic Development Initiative (REDI) (US$15 million) – to stimulate rural economic growth through the financing of approx-imately 110 rural subprojects that support reve-nue generating activities in agriculture and tourism.

• The Education Transformation Capacity Building Project (US$16 million) supports the implemen-tation of the national Education System Transfor-mation Program (ESTP).

• Additional office space to be provided by PAJ and FCJ for the growing business process outsourcing (BPO) sector.

• The Energy Security and Efficiency Project (US$15 million) supports the implementation of the government’s energy policy.

• The JM Youth Employment in Digital and Anima-tion Industries Project (US$ 20 million) is designed to support youth employment in the digital and animation industries in Jamaica.

• Strategic and targeted investment intervention (2014/2015) in contract manufacturing and light manufacturing including the assembly of consumer and electronic appliances, wire harnesses and medical devices along with greater linkages through packaging in order to grow the sector.

• A JAMPRO-led Limestone Sector Development Team has been established to generate leads and conversion, increase export-oriented FDI and re-investment, and commercialize the research findings on Jamaica’s high quality limestone depos-its.

• Limestone development study – “Market Assess-ment and Design and Implementation of a Marketing Initiative for Limestone and its Deriv-atives”. This formed the first phase of a broader project. The other phases included development of initiatives to attract investments to the sector and to provide technical assistance to companies

entering into new partnerships, developing new products or planning to upgrade processes. The last two phases are currently on-going.

• The Green Economy Assessment of Jamaica (GEAJ), is being undertaken by a team of consul-tants contracted by UWI Consulting Company (UWIC) on behalf of the Government of Jamaica (GoJ) and the United Nations Environment Programme (UNEP).

• Trade Missions & Trade Facilitation Initiatives

• Trade Facilitation Task Force (TF2) established early 2015 to drive reforms in trade processing, including the Single Trade Electronic Window.

• Following the establishment of the Logistics Hub Secretariat in the Ministry of Industry, Investment and Commerce., the Logistics Hub Master Plan is being funded by the World Bank and work on the study will commence August 2015.

• Special Economic Zone Task Force was estab-lished in 2014, arising from which the SEZ Green Paper was laid in the Houses of Parliament Janu-ary 2015. A legislative consultant has already been retained to prepare drafting instructions for the SEZ legislation during calendar year 2015.

• An Enterprise Team for the proposed Caymanas Special Economic Zone was established in 2014 and the pre feasibility report was completed February 2014.

• Approval has been secured for Jamaica to sign the Madrid Protocol. The enabling legislation will be

passed during FY 2015/16• Privatisation of the Kingston Container Terminal

by Port Authority of Jamaica• Facilitated over ten (10) inward missions from

China, Canada and the USA seeking to do invest-ments in alternative energy such as natural gas, bio-diesel and also energy from waste.

• Trade mission to Expo Wal-Mart 2014 in Central America and Mexico, which took place in Guate-mala City on February 25- 27, 2014.

• Launch of Export Max II on the heels of a success-ful Export Max I. More companies to be targeted and benefit.

• For the financial year 2013-2014 JAMPRO’s Creative Industries Unit facilitated 95 projects with a value of JMD $1.2 billion, employing 5392.

• The FINPYME Export Plus programme estab-lished to deliver technical assistance to exporting SMEs in Jamaica via a series of workshops

• Trade mission to the Dominican Republic – September 10-14, 2013 in Santo Domingo and Santiago

• In August 2014 Jamaica Customs launched its Auto-mated System for Customs Data (ASYCUDA) initiative which is being implemented at a cost of US$4 million. The pilot phase began December 2014 and is expected to speed up operations at the ports by fully automating export and import transactions.



Trade Competitiveness Framework

There are a number of factors affecting export competitiveness. These issues can be broken down into three categories as follows:

• Behind the Border i.e., supply side factors. These trade competitive-ness factors are in the direct control of exporters, the government and support agencies. They include those factors that directly or indirectly affect the type or direction of production as well as the quality and quantity of export supply. Some of these factors include infrastructure, technology, the labour force, trade support institu-tions, standards, etc.

• At the Border i.e., trade facilitation factors. These trade competitiveness factors relate to those elements that

facilitate the carrying out of trade between countries such as, exchange rates, port efficiency and availability.

• Beyond the Border, i.e., demand side or market access issues. These are factors that are demand related and can propel or hinder market access such as trade agreements, the size of the market or the level of demand for export goods and services and so on.

These three categories of border issues are key drivers of national competitiveness and determine to a large extent the ease with which export businesses are able to undertake exports in dynamic global markets.

8Behind the Border

(Supply Side)Border Beyond the Border

(Demand Side)

• Sophisticated infrastructure, especially telecom-munications and transportation

• A range of trade support institutions and programmes supporting private sector develop-ment (MSMEs in particular)

• Relatively high levels of infrastructure, governance and legislation for ICT and electronic transactions

• Well-trained, English-speaking labour force (general)

• A relatively high entrepreneurial culture• The existence of Special Economic Zones• The development a the Logistics Hub Initiative

• Upgraded infrastructure (ports, roads, telecommu-nications)

• Competitive real effective exchange rates (REER)

• Well-developed legal & regulatory framework and incentive regime.

• Relatively strong and internation-ally recognized country brand

• Proximity to key export markets such as the US

• Favourable and progressive trade agreements

• Low labour productivity and relatively poor total factor productivity

• Lack of skill set to match current and emerging needs

• Small market deters market seeking FDI (with exception of recently privatised sectors, such as Telecommunications)

• Service deficiencies to the sectors and clients• Many private sector associations and sector

specific associations are weak and in need of institutional strengthening and funding

• Work-force attitude/culture• Inadequate use of e-commerce technology and

the web platform for conducting business• Low rate of international standards certification

especially in the agro-processing sector largely resulting from high cost of certification and inad-equate sensitisation to the need for international certification

• Overdependence on domestic market

• High transaction cost of doing business

• Low access to capital, including venture capital; high cost of capital.

• Restrictive labour laws• Bureaucratic and cumber-

some export procedures• Poor enforcement and

compliance with laws and regulations

• Weak response to trade opportu-nities and risks.

• Changing global trade regime (erosion of preferential access and opening up of markets to compet-itors)

• Limited stretch of (positive) brand reputation across all export goods and services.

• There is inadequate hands-on, sector-focused information and guidance (practical guides) on how to seize market opportunities

• Trade Support Organisations are restricted by limited resources

• Lack of a consistent and widely accepted country brand / trade mark

Table 3Breakdown of Global Competitiveness Index – Jamaica

Source: World Economic Forum – Global Competitiveness Report 2014-2015 and Global Competitiveness Report 2013-2014



Behind the Border (Supply Side)

Border Beyond the Border (Demand Side)

• High levels of FDI facilitate technology transfer and further (infrastructural) development

• Development of Professional services export.• Existing and emerging technological innovations

for improving productivity and efficiency.

• Growing demand for resource-based and other raw materials exports in emerging markets

• Growing urban populations in most developed and developing econo-mies presenting a real opportunity for mining, light manufacturing and agro-processing sectors.

• Growing demand for cultural and creative goods and services that are uniquely Jamaican.

• Trade agreements – CSME, EPA, CARICOM Bilateral Trade Agree-ments signed with Cuba, Venezu-ela, Costa Rica, Colombia and the Dominican Republic, etc.,which may foster increased intra-regional trade

• Poor understanding and tracking of international trends and developments, e.g. new technologies, systems, processes and ways of doing business.

• Investors’ favourable perceptions of other business destinations (for example, Mexico, Puerto Rico, Malaysia, Thailand, Hong Kong, China)

• Low cost of labour in emerging markets

• Inadequate use of the Diaspora Market (no clear understanding or analysis of the Diaspora Market potential)

• Erosion of preference margins under preferential trade agree-ments.

• Not taking advantage of the ready export market in the form of visi-tor arrivals to Jamaica (~3 million persons).

• Inadequate appreciation of the critical role that promotion must play in market penetration and development. Low priority given to budgetary allocations to promotion in the public and private sectors

Funding the National Export Strategy

The National Export Strategy 2015-2019 is expected to cost the country approximately US $24.5 million over a five-year period. Given the fiscal space and the economic constraints, one of the key challenges will be finding ways to finance the implementation of the proposed strategic actions.

9

Priority Area Allocated Budget (USD)

Agro-processing / Agro Business 2,055,500.00

Film and Animation 2,653,000.00

ITES 1,752,000.00

Light Manufacturing 1,003,000.00

Mining 2,355,000.00

Export Financing 850,000.00

Logistics 3,466,000.00

Market Access and Trade Information 5,795,000.00

Standards and Quality 417,000.00

Capacity Building 1,022,000.00

Branding 2,065,000.00

Sustainability 1,040,000.00

Total Budget 24,473,500.00

Table 2 - NES Alignment to Vision 2030 Jamaica

JAMAICA’S NATIONAL EXPORT STRATEGY | 2015-201958

Part 1 – Background and Introduction

Generally, there are three sources of funding for the National Export Strategy. The first and obvi-ous option is the government of Jamaica. However, while the Government of Jamaica is committed to the strategy and its implementation, its other commitments and finite resources dictate that funding must also come from elsewhere.

It is in this regard that the second financing avenue must be considered, namely, funding from interna-tional donor agencies such as, the Commonwealth Secretariat, the World Bank, the European Union, the Inter-American Development Bank and other non-governmental international donor agencies. These donor agencies provide development aid for projects that align with their development agenda and objectives.

In implementing the National Export Strategy, activities need to be identified and grouped (where applicable) into a target project and earmarked for donor funding. At the start of implementation, the required proposals and Terms of Reference need to be developed. Donor agencies will then be approached for funding consideration.

Some activities can also be financed through public private sector partnerships (PPP). The private sector needs to take ownership and responsi-bility for some of the actions. For example, it is proposed that larger, established companies assist some of the micro, small and medium enterprises (refer to strategic action plan on Capacity Build-ing). This is an initiative that can be wholly owned by the private sector.

Part2Priority Sectors

Priority Sectors Priority Sectors Priority Sectors Priority Sectors Priority Sectors Priority Sectors Priority Sectors Priority Sectors Priority Sectors Priority Sectors Priority Sectors

Priority Sectors Priority Sectors Priority Sectors Priority Sectors Priority Sectors Priority Sectors Priority Sectors Priority Sectors Priority Sectors Priority Sectors Priority Sectors


Part 2 – Priority Sector Strategies Part 2 – Priority Sector Strategies

This section entails a review and analysis of the five priority sectors as follows:

Part2Priority Sectors

As the data will reveal, the performance of all of the sectors, with the exception of ITES, has been sluggish at best and in some cases declining. Many of the sectors have not been able to fully recover since the global economic recession of 2008/2009. Revenue earnings have not been able to surpass pre-recessionary levels for the priority commodity export sectors. Non-traditional mining is the only sector that seems to be slowly making progress as it was the only commodity priority sector that expe-rienced growth (18%) between 2013 and 2014. In the case of light manufacturing and agro-pro-

cessing / agro business, these sectors experienced double digit rates of decline between 2013 and 2014. The lacklustre performance of the export sectors calls for strategies to help bring them in line with pre-recessionary levels. Consequently, some of the targets and strategies were designed with export recovery in mind. ITES, on the other hand, is one of the sectors that has been perform-ing well. The ITES sector is poised for growth and is expected to achieve growth rates of 15-20% in terms of employment generation by 2019.

Figure 7Priority Sectors Commodity Exports Performance

Base Year = 2004

Source: Comtrade Statistics, 2015

Agro-Processing / Agro Business Sector10Section 1

Agro-processing/Agrobusiness Sector Analysis

Developing competitive Agro business and Agro-processing, defined here as post-harvest activities involved in the transformation, preserva-tion and preparation of agricultural production for intermediary or final consumption in the form of food and beverage, is crucial for Jamaica’s econ-omy.

The Agro-processing and Agro business sector is responsible for generating employment and income opportunities and contributes to enhanc-ing the quality of, and the demand for, farm prod-ucts. In addition, it can promote decentralised growth and generate non-farm activities in rural areas such as handling, packaging, processing, trans-porting and marketing of food and agricultural

products, particularly in cottage industries. There are clear indications that Agro-processing and Agro business are having a significant global impact on economic development and poverty reduction, in both urban and rural communities. However, the full potential as an engine for economic develop-ment has not yet been fully realised. There are a number of global trends that are creating new opportunities that Jamaica can benefit from.

The increasing importance of processed agri-cultural products is a long-run trend observed in trade across regions and countries. The global food and agricultural industry for 2014 is esti-mated to reach US $7.6 trillion, according to Plunkett Research, or about 10% of global GDP.

Global Trends 10.1



Global food exports totalled US $1.38 trillion in 2012, according to the World Trade Organisation. In the U.S., food accounts for approximately 13% of a typical house-hold’s spending, ranking third behind housing and trans-portation, per the U.S. Bureau of Labour Statistics. In Asia, food ranks first, estimated at 23% of consumer spending, followed by education and housing.

The share of processed food in total food exports increased for all categories of developing countries. Urbanisation and population growth in the context of economic growth have transformed the domestic markets of developing countries into the principal source

of expansion for the global agro-food system. These combined opportunities of export and domestic markets offer a strategic opportunity for the integration of agri-culture into dynamic agro-industrial supply systems with strong regional and employment impacts. However, issues of quality, food safety and logistical considerations have placed a premium on agro-industrial management and supply system coordination, demonstrating that compet-itive advantage needs now to accompany comparative advantage if the new opportunities for development are to be seized. In other words, it is the human value added that creates competitive advantage.

Consumers are Changing10.1.1

Over the past two to three decades, consumers are rising to greater heights of power and control. They are no longer ‘takers’ but are increasingly driving economies. Consumers are becoming more knowledgeable, demanding, educated and sophisticated. With rising income levels and a growing middle class in many emerging econo-mies, consumers’ preferences are becoming more discerning and markets are more heterogeneous. There are fundamental shifts in consumer patterns and behaviour that need to be understood and taken on board. There are three fundamental shifts taking place (Tourism Intelligence Interna-tional, The Paradigm Shift):

1. Demographic shifts – the aging of the popu-lation and the rise of generations X, Y and Z – It is widely accepted that populations in many of the mature economies and the world in general, are aging rapidly. People are living longer because of healthier lifestyles and better healthcare systems. The decreasing family size is another factor driving the aging of populations. China’s One Child Policy for instance is a classic example. Consider that the world’s over 50s market has grown to

an estimated 1.5 billion persons in 2014 – a market size that exceeds the population base of China (1.35 billion), according to United Nations (UN) estimates.

Generations X, Y and Z are very different from their parents and grandparents. They are more educated and are very technology savvy. They spend long hours on social networks and on other online sites. Gen Y and Z are considered digital natives. These generations are online 24/7 via computers, mobile devices, tablets, iPods, etc. Therefore, to stay ahead of the game in these markets, businesses need to focus their marketing efforts on the places and spaces these younger generations spend their time.

2. Psychographic shifts – the emergence of the Creative Classes of consumers. The Creative Class is a group of sophisticated and talented consumers. They are stable income earners and are not afraid of spending to support their demanding lifestyles. Well-educated and savvy to begin with, they feel driven to expand their cultural horizons through authentic experi-

ences and lifestyles. They consume and are dependent on the newest technology. They are city dwellers, who prefer an urban atmo-sphere of tolerance and creativity.

3. Geographic Shift – rise of the emerging markets of Brazil, Russia, India, China, South Africa, etc. These markets are also fundamen-tally different from the traditional markets of North America and Europe. Even within

and among these emerging markets there are fundamental differences along the lines of culture, demographics, ethnicity, income levels, education levels and general consumer tastes and preferences.

Customisation, flexibility and individuality will be a premium because of these radical differences among consumers. Quality, content, originality and variety are therefore critical for success.

There is also an increasing shift in demand from western economies such as North American and Europe to emerging economies, primarily in the east, such as India and China. Consumption by developing economies is expected to increase from US $12 trillion annually in 2010 to US $30 trillion in 2025, according to Urban world: Cities and the rise of the consuming class, McKinsey Global Institute. As developing economies amass more wealth, nearly 2 billion individuals are expected to enter the global consuming class, and 60% of households worldwide with incomes of at least US $20,000 per annum are predicted to be in developing economies. By 2025, it is esti-mated that developing economies could account for nearly 70% of global demand for goods.

Agro-processing and agro business capacity grows where demand grows. For instance, food-process-ing output in Brazil, China, and India has increased

by 8 to 18 per cent annually in nominal terms since 1995, reflecting growth in local consumption. At the same time, annual growth in Agro-processing in advanced economies has averaged 2 to 3 per cent, according to the McKinsey Global Institute.

Demand shifts to emerging markets are being driven not just by large economies such as China, Brazil and India but also by economic growth in Indonesia, Kenya, Vietnam, and other smaller emerging markets. This is a significant implication for the Agro-processing and agro business sector in Jamaica. Rather than focusing attention on the ‘big’ markets such as the USA, UK and Europe and the larger emerging markets such as China and India, smaller markets could be identified for long-term viability. For example, Grace Kennedy has indicated that they have already begun export-ing to some of these smaller economies such as Uganda.

Shift in Demand from West to East10.1.2



Income and Urbanisation

Impact of Technology

10.1.3

10.1.4

The confluence of two megatrends, middle class income growth and urbanisation, is driving increased sales of processed food. According to the OECD, the size of the global middle class is projected to increase from 1.8 billion people (2010 estimate) to 3.2 billion by 2020. Of this projected growth, 85 per cent is expected to come from Asia. Based on analysis of IHS Global Insight data, middle class households in developing countries (households with real incomes greater than $20,000 per year) are projected to increase 54 per cent by 2020 compared to eight per cent

in developed countries.

Many of these new consumers will be living in emerging megacities where convenience, higher protein content, and functional ingredients take centre-stage in dietary preferences. Future demand for high-value processed food items will continue to be propelled by the increasingly urbanised middle class, a phenomenon that Jamai-ca’s Agro-processing exporters stand to benefit from.

Technology and globalisation have revolutionised the way that we grow food, as well as the way that we transport, process, package, purchase and cook it. Waste and spoilage are reduced (but still a prob-lem) thanks to innovations like flash freezing, good highways and refrigerated trucks. Furthermore, it’s an everyday occurrence for consumers in the U.S., Asia or Europe to pick up strawberries from New Zealand, mangos from Mexico or bananas from Costa Rica in the fresh produce section of the local supermarket. Globalisation has led to the rise of massive multinational food processing compa-nies like Nestlé and Unilever, which often sell their foods under local names in local languages, after producing them in regional factories worldwide.

Genetic Modification (GM) technology creates opportunities for pest and disease resistance among crops and better yield in some cases. The

use of chemical pesticides is reduced and creates a better environmental impact. However, GM tech-nology results in higher priced seeds, but savings are experienced because of the lower rates of crop loss and reduced spending on pesticides. As a relatively misunderstood application, GM tech-nology is often shunned by rural farmers who prefer the status quo. There is also a movement of consumers that are anti-GM and in favour of pure organic and natural farming. The increased invest-ment in biofuels, growing populations around the world, and the concern about greenhouse gas emissions suggest that an increase in agricultural productivity is essential. The GM application is one technology that can contribute to produc-tivity gains. In spite of this, the Jamaican scenario suggests that organic farming for the most part is the most practical option and can be a lucrative niche for local farmers.

Food and beverage E-commerce is another trend shaping the future of food retail. Euromonitor esti-mates that the online grocery segment was worth US $42 billion globally in 2013. A joint study of six key markets by PayPal and Nielsen estimates that by 2018, there will be 130 million cross-bor-der shoppers spending more than US $300 billion, compared to 94 million spending US $105 billion today. This presents a tremendous opportunity for U.S. food and beverage exporters to meet the demand of the Internet-savvy, time-pressed urban consumer.

Food “e-tailers”, another term for the busi-ness-to-consumer (B2C) platforms for online grocery retail, have witnessed explosive sales growth in emerging market megacities such as Shanghai, China. To advance the viability of this growth channel, a model partnership was estab-lished between FAS’ Agricultural Trade Office (ATO) in Shanghai and Tmall, China’s largest B2C E-commerce platform.

Together, along with various U.S. co-operator organisations, ATO Shanghai and Tmall have launched several product promotions that featured processed and consumer-oriented items such as cookies, dried fruits and nuts, pork, seafood, and candy. To demonstrate the potential scale of these promotion events, last summer’s promotion of cherries from the North-western U.S. led to sales of 168 metric tons of U.S. cherries to 84,000 indi-vidual shoppers in just over two weeks. According to Tmall, this is the equivalent of nine years’ worth of cherry sales at a medium-sized supermarket.

Websites such as Tmall provide a useful plat-form for American exporters of all sizes and in all sectors to market their products directly to China’s growing number of online consumers. However, the online revolution in food and bever-age e-commerce is not a one-country phenome-non. Globally, more than 150 million new Internet users came online in 2013. Other e-grocery plat-forms in Tokyo, Sao Paulo, Moscow, and London show extraordinary potential for this booming cross-border retail channel.

The E-commerce Trend10.1.5



Health Consciousness

Global Warming

10.1.6

10.1.7

Growing health concerns are significantly impacting all sectors of the food industry, as obesity levels have risen to alarming proportions in the U.S., Mexico, Asia and else-where. In the U.S., where soaring health care costs are a prime concern, US $147 billion in yearly medical costs were linked to obesity in 2008. In the massive health care act passed in 2010, the U.S. federal government set up a requirement that all restaurant chains with 20 or more restaurants post calorie counts for menu and buffet items.

American food processors are dramatically altering their strategies to serve consumers who are concerned about better nutrition and fewer sugars and fats in their foods. Many chain restaurants are likewise seeing excellent sales from lower-calorie foods. McDonald’s’ soaring success with salads is an excellent example. Snack food makers are likewise offering more and more reduced fat items. The Caribbean Region is not far behind in this regard as well.

Meanwhile, the soda industry is going through immense changes due to consumer trends. At one time, soda manufacturers and marketers assumed that there was

limitless worldwide growth to be enjoyed in soda sales. However, the real growth in beverages lately has been in bottled waters, energy drinks and natural juices. As a result, 2009-10 saw dramatic regrouping at PepsiCo and Coca Cola when the firms announced their intent to acquire the massive companies that did much of their bottling under license agreements. These soft drink giants have attempted to cut costs, streamline operations and distribute new products as a result of these mergers.

In North America, Asia, Europe and elsewhere, produc-ers and retailers of foods (including restaurants) are now faced with the challenge of positioning their brands to represent consistent quality and healthier options. Companies that rise to this challenge will have signifi-cant competitive advantage. This health positioning will go hand-in-hand with growing demand to satisfy addi-tional consumer concerns about environmentally-sound food production methods, fair trade, fair use of labour and humane treatment of agricultural animals. However, a focus on such concerns as fair trade can add dramatically to costs.

Not to be overlooked when considering food industry trends is the potential effect of global warming on agricul-ture. While the United Nations predicts that food produc-tion needs to increase by as much as 70% from 2010 to 2050 due to a much larger world population and grow-ing demand for food in nations with increasing house-hold incomes, scientists are predicting much lower crop yields in some areas due to higher average temperatures as global warming worsens. On the other hand, some observers think that rising temperatures could increase the growing season and agricultural output in regions that currently have cold climates. One potential problem is that higher temperatures may lead to increased drought in many agricultural areas. Another potential problem is growing levels of greenhouse gases such as carbon diox-ide and ozone.

There is general scientific consensus that global warming will negatively impact food production. “For the major crops (wheat, rice, and maize) in tropical and temperate regions, climate change without adaptation is projected to negatively impact production for local temperature increases of 2°C or more above late-20th-century levels, although individual locations may benefit (medium confi-dence)… All aspects of food security are potentially affected by climate change, including food access, utilisa-tion, and price stability (high confidence).” Source: IPCC WG2 AR5 Summary for Policymakers - Climate Change 2014: Impacts, Adaptation, and Vulnerability.

The global processed food and beverages indus-try is dominated by a handful of multinational corporations. Among the leaders are Unilever, Cadbury Schweppes, High. J. Heinz, Kraft Foods Group, Mendelez International (formerly part of Kraft Foods, Inc.), General Mills and Nestlé. Unile-ver, for example, estimates that 150 million people per day purchase its products, ranging from Knorr soups to SlimFast diet meals, in 150 nations around the globe. According to Plunkett Research

estimates, U.S. food production of all types from animal processing to packaged foods manufac-turing (but not including the agricultural sector) will total about $881.6 billion in 2014, employing 1.679 million. This includes foods manufactured for export but does not include tobacco products. Nearly 1 million additional people are employed in wholesale food distribution, plus nearly 3 million in food and beverage stores.

The entire food industry, from growing to processing to retailing, is an extremely competi-tive field where profit margins are typically so low that it is often challenging to maintain profitabil-

ity. The processed food industry worldwide has been hindered by high energy costs and chang-ing consumer tastes. High feed costs have been extremely damaging to poultry and livestock firms.

While the processed food category includes a diverse array of prepared and packaged products, all of them benefit from a common trend: rapid growth in global demand. Euromonitor, a market research firm, estimates that the retail value of packaged food (a proxy category for high-value

food products) will increase by US $316 billion over the next five years to US $2.6 trillion. One challenge is to translate this expansion in food retail into export opportunities. Another chal-lenge is steep competition from other principal suppliers.

Competitive Environment10.2

Global Domination by a Few Players

Low Margins and High Costs

Rapid Growth

10.2.1

10.2.2

10.2.3



While there is a wide range of products in the agro-processing sector in Jamaica, those that offer competitive advantage are the ones that are unique, authentic and of superior quality. Jerk seasoning for example, is a product that is uniquely and authentically Jamaican. Similarly products such as ackee are not commonly found across the globe and this gives Jamaica an advantage in these areas. Key gaps that must be bridged in this regard, are the areas of quality standards and proper packaging in order to make products even more competitive.

Europe is the Competitive Leader

How Can Jamaica Compete?

Product

10.2.4

10.2.5

10.2.5.1

The European Union (EU) is the world’s lead-ing processed food exporter, with roughly twice the exports of the United States. EU exports of processed food products reached $91 billion in 2012, growing 28 per cent over five years. Like those from the United States, EU processed food shipments are highly diversified geographically

and categorically. US market share has decreased marginally in the past decade because of top-tier competition, not only from the European Union but from other emerging suppliers like Thailand and China. During this time, U.S. exporters have still managed to tap global demand and expand exports by 143 per cent.

The global market for agro-processed products is growing rapidly with growth stemming predomi-nantly from urban areas. While demand is strong, competition is also fierce. The sector is dominated by large, well-known conglomerates coming out of North America and Europe. Jamaica should not attempt to compete on a large scale basis with the established conglomerates. Instead, Jamaican agro-processers need to focus on what makes their products unique and on the strength

of the Jamaican brand. Agro-processed products also need to be strategically positioned to take advantage of the sector’s natural strengths such as healthy, organic and fair trade. This positioning can help to justify the higher prices of some products. In addition, Jamaican agro-processors need to look for opportunities to integrate into global value chains (GVC), at an increasingly higher level up these GVCs as their engagement deepens.

Possessing unique, quality products is necessary but insufficient for sustained competitiveness in the export markets. In order to drive competi-tiveness products must be strategically positioned to take advantage of the market trends and the natural strengths inherently found in Jamaican products that match these trends. Strategically positioning Jamaican agro-processed products as healthy, organic and fair trade would go a long way in increasing competitiveness especially where competing on price is not feasible. The challenge to overcome is that not all products are organic

or fair trade and those that already possess these qualities are not certified or recognised as such. Implementing an internationally recognised certi-fication programme in fair trade and organic practices will be the first step needed in order for the strategic positioning to be implemented successfully. Once certification is implemented strong branding, marketing and promotions initia-tives need to be carried out to portray the right message needed to create the needed positioning in the markets

The Jamaican brand is one of the most recog-nisable brands in the world. “Made in Jamaica”, the Jamaican ‘mark’ and the Jamaican geographical indicator (GI) are all aspects of branding that add tremendous value to the already excellent prod-ucts that are generated in the sector. However, this area still remains largely untapped as there is no consistency in branding Jamaican products across the board.

Protection of the Jamaican brand will be of critical importance for the sector. The law protecting GIs mandate that only products or the raw materials originating from a particular area and/or meeting certain standards, are allowed to benefit from this special designation. While there is an array of laws and regulations in this regard, enforcement will be crucial in order to truly take advantage of Jamaica’s brand for effective competitiveness.

Positioning

Branding

10.2.5.2

10.2.5.3



The following markets presented in the table below are considered to be priority markets and are ranked in order of importance. The sheer market size, strong demand for agro-processed/agro business products, geographic proximity, taste similarities and the presence of the Jamai-can Diaspora makes the USA, Canada, the Carib-bean and Latin America top markets for Jamaican

agro-processed products. The UK is also import-ant because of the size of the market and strong demand, as well as, a strong Diaspora presence. Europe and Africa are also considered important – both for their sheer size and strong demand, and Africa (Nigeria, South Africa, Uganda) in particular for its relatively similar tastes in foods, e.g. spices, tubers, etc.

While these markets are suited for the agro-pro-cessing / agro business sector in general a look at specific niches/products and the respective target market is important to consider as well. The agro-processing and agro business sector comprises a wide variety of products. To carry out a market assessment for each specific prod-uct will be a lengthy process. Instead the markets

are explored and assessed based on the recom-mended niches – organic, fair trade, fresh produce and ethnic foods. In addition, markets for the beverages and spirits segment (because of its sheer size) are also considered as well as those for the nutraceuticals segment. Using the same crite-ria as above the following markets were selected for the respective products / niches.

Market Assessment10.3

Priority Markets for Agro-processed and Agro-business Products

10.3.1

Market Market Size

Demand for Agro-pro-

cessed/ Agro-business

Products

Geographic Proximity

Cultural / Taste

Proximity

Strong Diaspora Presence

USA High High High Medium HighCanada High High High Medium High

Caribbean

(Trinidad and Tobago, Do-minican Republic, Barbados,

Cuba)

Medium High High High High

Latin America

(Venezuela, Brazil, Colom-bia)

High High High Medium-High Low

UK High High Low-Medium Medium HighEurope High High Low Low LowAfrica

(Nigeria, South Africa, Uganda, Kenya)

High High Low Medium-High Low

Japan High High Low Low Low

MarketOrganic / fair

TradeFresh Produce Ethnic Foods

Beverages & Spirits

Nutraceuticals

USA Medium-High and growing

High High Very High High

Canada Medium-High and growing

High High Very High High

UK and Ireland High High High High High

Trinidad and Tobago Low (but grow-ing)

Medium Medium-High Medium-High Medium

Dominican Republic Low Medium Medium-High Medium-High Medium

Barbados Low Medium Low-Medium Medium Low-Medium

Cuba Low Medium Low-Medium Medium-High Medium

Other Caribbean Low Medium Low-Medium Low-Medium Low

Japan High High Medium-High Medium-High High

Australia/New Zealand High High Medium Medium-High Medium-High

Mexico Low (but grow-ing)

High Low-Medium High Medium-High

Brazil Low (but grow-ing)

High Medium-High High Medium-High

Venezuela Low (but grow-ing)

High Medium High Medium

Colombia Low (but grow-ing)


Other Latin America Low (but grow-ing)


Germany High High Medium-High High* High

France High High High Medium High

Netherlands High High High Medium High

Eastern Europe High High Medium Medium Medium-High

Italy High High Medium Medium Medium

Other Europe High High Medium Medium Medium-High

South Africa Medium High Medium-High Medium-High Medium

Nigeria Low (but grow-ing)

Medium-High Medium-High Medium Medium

Uganda Low Medium Medium Medium Medium

Kenya Low Medium Medium Medium Medium

Table 6Priority Markets for Specific Agro-processing/Agro Business Niches & Segments

First Tier Priority Second Tier Priority

* Germany is a very saturated and competitive market in terms of beverages, particularly beer. This poses a significant challenge. There are however, small pockets/segments that could be explored. Germany is the largest and most sophisticated market in Europe in terms of beverages, the potential is there but not without serious competitive challenges.

Also key to note that mainstream Europe and Japan are among some of the most health-conscious markets in the world. This bodes well for export of organic, fair trade and nutraceutical products. This is however, not without competitive challenges. Jamaica will need to compete with branding and quality.



The Agro-processing / Agro-business Sector is very broad and dynamic. Vision 2030 Jamaica defines the agro-processing sector as the second-ary industry processing agricultural raw material into food and beverages. Agro business (or agri-business) is the business of agricultural production. It includes agrichemicals, breeding, crop produc-tion (farming and contract farming), distribution, farm machinery and seed supply. Based on the definitions of agro-processing and agro-business and for the purpose of this National Export Strat-egy, the Agro-processing / Agro-business sector is determined to comprise the following export products:

• Beverages and spirits• Vegetables, fruit, nuts, roots & tuber prepa-

rations• Sugars and sugar confectionery• Cereal, flour, starch, milk preparations• Coffee and spices

• Meat and seafood food preparations• Nutraceuticals• Other – including cocoa, animal and vege-

table oils, tobacco, dairy products, honey and other miscellaneous edible prepara-tions.

Based on the output value (USD) of exports in 2013, the breakdown of the agro-process-ing/agro-business export sector is largely made up of the beverages and spirits segment, which accounted for 42% of the share of the sector’s export output in 2013, up from 32% in 2004. The second largest segment, comprising vegetables, fruit, nuts, roots & tuber preparations, accounted for 17.1% of export output in 2013, up from 14.8% in 2004. The third largest segment was sugar and sugar confectionary, which accounted for a 13.7% share of agro-processing export output in 2013. This segment notably declined from 27% in 2004.

The Agro-processing / Agro-business Sector in Jamaica10.4

Definition and Composition of the Sector10.4.1

Figure 8Breakdown of Exports from the Agro-processing / Agro-business Sector in Jamaica, 2013

Source: Source: UN Comtrade Statistics, 2014

The Agro-processing / Agro-business Sector has the potential to be a very lucrative export sector. Based on the above definition, the value of exports from the sector accounted for nearly 3% of Jamai-ca’s overall GDP (at current prices) and generated in excess of US $300 million in export revenue in 2014, according to data collected from the United Nations Comtrade Database. However, export output from the agro-processing and agro business sector is not growing as fast as other sectors and has not fully recovered since the global economic recession of 2008-2009. Consider that in 2008 exports from the agro-processing/agro-business sector accounted for nearly 4% of GDP or US

$419 million. However, since the recession the value of the sector’s export contribution to GDP declined to an annual average of less than 3% of GDP and has remained in that vicinity ever since. Similarly, with the exception of 2012, the annual export output of the agro-processing and agro business sector has remained well below 2008-2009 levels, generating some US $194 million less in export output in 2014 compared to 2008 and US $237 million less than 2012. Export output in 2012 spiked largely because of a surge in the beverages and spirits segment, which reached a record high of US $283 million (US $161 million more than the previous year). See figure 9 below.

Export Performance of the Sector10.4.2

Figure 9Historical Performance of Agro-processing/Agro-business Exports 2004-2014

(USD Millions)

Source: UN Comtrade Statistics and United Nations Statistics Division, 2015



Producer prices within the agro-processing sector (Food, Beverages & Tobacco) grew by 6.9 per cent during 2013, according to the Economic and Social Survey Jamaica 2013. This increase was reflected mainly through the higher cost of raw materials and the depreciation of the Jamaica Dollar. The subgroups of the agro-processing/agro business sector with the largest upward movements in price were:

• Beverages & Tobacco – 6.4 per cent.

• Dairy Products – 10.6 per cent• Grain Mill Products, Starches & Starch

Products – 9.5 per cent• Meats, Fish, Vegetables, Oils & Fats – 7.7

per cent

The rising prices have important implications for exports from Jamaica in terms of competitiveness. Competition will therefore need to be focused on other key areas and not only on price.

High Prices in the Sector

SWOT Analysis

10.4.3

10.5

• Brand equity and strong country of origin reputation.

• Unique products

• Diverse product range

• Strong export orientation

• Support programmes in place for the industry

• Presence of industry competition to drive performance

• Standard compliance and quality products

• World-class enterprises within the sector

• Ability to make high quality products

• Established niche markets, brands and products

• Availability of some ‘green’ raw materials

• Water quality

• Established channels to some target markets

with experience to expand reach

• Reasonable and improving product devel-

opment competency exists

• Geographic location

• Weak export focus among many potential and current

exporters as some companies lack the aggressive-

ness to go after new market opportunities.

• Exporters are too USA-focused and gener-

ally too focused on traditional markets

• No foresight and planning related to new

product groups (value creation)

• Continued increase in labour costs without corre-

sponding productivity improvements

• Low uptake of available incentives.

• Poor utilisation of funding and technical assistance.

• Weak knowledge of external consum-

ers and marketing trends.

• Limited innovation and use of technol-

ogy to match evolving market trends.

• Uncoordinated marketing efforts among the industry

• Mistrust, poor networking among stakeholders

and inadequate linkages in the supply chain

• Weak strategic alliances between inter-

nal and external entities

Strengths Weaknesses

SWOT Analysis cont’d

• Weak coordination among policy and services entities that

support or guide the industry (Ministries and agencies)

• Increasing security costs

• Increasing praedial larceny in the industry.

• Weak procurement networks.

• Weak linkages to R&D resources (private

and academic), e.g.: SRC, SIRI, etc.

• Few companies follow best practices and quality standards

– environmental, health, packaging and product standards.

• Inconsistency in quality and supply of domestic raw materials.

• Low utilisation of Quality Management Systems (QMSs).

• High Import content

• Poor supply chain management.

• Limited harnessing of available skills for appli-

cation and impact in the following areas:

• Marketing and branding

• Quality Assurance

• Production Management.

• Technical/Engineering/Maintenance.

• Inadequate systems and new technologies.

• Limited use of environmentally friendly/clean production tech-

nologies and Environmental Management Systems (EMSs).

• Limited of use of waste as a resource.

• Many companies undercapitalised.

• The Issue of praedial larceny

• Outdated policies, legislation and plans

• Resistance of new applications such as GMO technology

• Proximity to main export market (USA).

• Strong demand for Jamaican products,

which is increasing in some markets.

• Research and Development support is available.

• Plant layout and design support available.

• Access to product knowledge.

• Training programmes are available.

• Climate and soil quality conducive to growing certain crops.

• Environmental positioning based on prod-

ucts and processes/ systems.

• Growth in potential linkage industries – such as wellness.

• Tourism market growth - capacity.

• Changing global consumer demand for wholesome

and/or convenience foods – points to potential to

increase value addition of product offerings.

• Exploitation of regional Latin American markets,

(and their Diasporas) yet to be fully explored.

• Genetically modified seed applications

for pest and disease resistance

• Cooperative / Cluster base to be explored

for greater efficiency and output

• Commodities market facilitates forward buying

• Growing food trends such as:

• The fair trade Movement

• Organic food products

• Authentic Ethnic food products

• Gourmet food products

• Exotic / Wild Meats

• Spa, Health and Wellness

• Performance Foods

• The last two points have significant implica-

tions for the Nutraceuticals sector.

Weaknesses (cont’d) Opportunities



• Low growth in the domestic market.

• Low levels of investment in the sector.

• Continued urban migration reduc-

ing the labour force for the sector.

• Poor perception of agriculture as a viable economic sector.

• Inadequate (poor) transportation impacting on prod-

uct quality arriving to processors.• Weather condi-

tions impact raw material (ingredient) supply.

• Increasing numbers of international and

local environmental regulations.

• Exports of Jamaican “knock-offs”.

• Violation of geographic indicators by

foreign manufactured products.

• New product development in competing countries.

• Multiple occurrences of products arriving without proper

labelling, etc. (leaky border and there is insufficient protec-

tion of consumer and the manufacturers/employers).

• Issue of non-comparable treatment of imports – not

same level of diligence as trading partners. Poor

response from domestic authorities to halting prod-

ucts that should not been on the market.

• An unstable FX regime – based on

the rate at which it changes.

• Competitive interest rates to allow for

reinvestment in the sector.

• Competition from subsidised products both

on the local and export markets.

Threats

SWOT Analysis cont’d

There are a number of export opportunities that the Agro business/Agro-processing sector offers to Jamaica. With the growing trend towards more experienced, health-conscious and demanding consumers with sophisticated tastes and prefer-ences, a number of opportunities are opening up that Jamaica can take advantage of. These oppor-tunities include Agro-business and Agro-process-ing development along the following lines:

• The fair trade Movement• Organic food products• Authentic Ethnic food products• Exotic / Wild Meats• Spa, Health and Wellness • Performance Foods

These are further explained in the proceeding sections.

Key Opportunities and Implications for Jamaica10.6

Fair trade is an organised social movement, which aims at helping producers in developing countries achieve better trading conditions and to promote sustainability. The movement advocates the payment of higher prices to exporters, as well as higher social and environmental standards. It also focuses in particular, on commodities or products that are typically exported from developing coun-tries to developed countries. most notably hand-icrafts, coffee, cocoa, sugar, tea, bananas, honey, cotton, wine, fresh fruit, chocolate, flowers, etc.

Global retail sales of fair-trade products such as coffee, sugar and bananas soared by 15% between 2012 and 2013 to reach £4.4 billion (US $6.8 billion). There are currently 74 fair-trade producer countries internationally, while more than 30,000 fair-trade products are on sale in 125 countries across the world. In 2013 sales for fair-trade sugar grew by 22% over 2012, bananas (12%), flowers (16%) and coffee (8%).

Strongest growth markets include the USA, where sales of fair-trade products rose to £258 million (US $400 million) since the introduction of fair trade in 2012. Brand new markets such as India

and Kenya came on stream joining South Africa as fair-trade producer countries with rapidly growing sales of fair-trade products in their own markets.

The largest fair-trade market is the UK, which generated £1.8 billion (US $2.79 billion) in sales and growth of 14% between 2012 and 2013. Germany cemented its number two market position after the UK, with consumer retail sales topping £519 million (US $804 million) following exceptional 23% annual growth. Fairtrade Inter-national reported initiatives to open up more opportunities for the people at the far end of the supply chain – now more than 1.4 million farmers and workers, belonging to 1,210 producer organi-sations, including local co-operatives.

Jamaica already has the right circumstances to benefit from and take advantage of the fair trade opportunity. However, fair trade certification is a critical component that must be implemented. In addition, stakeholders in the sector need to become aware and educated on the importance and benefits of the fair trade opportunity.

The Fair Trade Movement10.6.1



The growth in demand for organic food is strong around the world and little has been done to exploit it in the region, which gives Jamaica an advantage in terms of being one of the first movers from the region in terms of exports. This export opportunity is supported by the fact that consumers are increasingly participating in a grow-ing food culture focused on high-quality gourmet experiences and unique dishes. This trend has been further supported by a rise in per capita disposable income in many developed nations. In the five years to 2014 in the US market for exam-ple, disposable income increased at an average annual rate of 1.2%, according to the US Census Bureau. This bodes well for the Agro-processing sector in Jamaica.

In addition, environmentally sustainable eating environments that serve farm-to-table and locally sourced dishes, will become increasingly common-place. The trend of locally sourcing produce and other ingredients used in restaurants will spill over

into the beverages sector. Many operators within the food-services sector, particularly within both the fast-casual and full-service dining segments, are increasingly seeking out locally-produced and craft beers, wines and spirits to pair with their dishes. These emerging trends are expected to strengthen over the next five years, offering operators within these sectors opportunities to develop new prod-ucts and bolster profit margins, according to IBIS World.

The Grenada Chocolate Company is an excel-lent example of a business that has developed an organic high cocoa chocolate product derived from Grenadian cocoa that commands a large premium in high-end retail outlets in Europe and North America. The opportunity for Jamaica is therefore a real one. However, suppliers will need to comply with the strict international standards for organic products in order to truly take advan-tage of this opportunity.

There is expected to be an explosion in demand for authentic ethnic foods between 2012 and 2017 in the vicinity of 20 per cent, according to the Mintel Group. As the diaspora market grows and the brand name of Jamaica increases in currency, there will be a growth in demand for authentic

Jamaican cuisine. There are also spill over oppor-tunities from other markets such as tamarind and mango based products for the Indian diaspora, for example. The 20% growth prediction is worth over US $10 billion annually.

Organic Food Products


10.6.2

10.6.3

The exotic or niche meat market represents another key opportunity for Jamaica. The meat and poultry sector in many major source markets is large and growing. The meat and poultry sector in the US for example, represents the largest segment of the agriculture sector. Total meat and poultry production in 2012 reached more than 42.14 billion kilograms, up 272 million pounds from 2011. Meat and poultry generates an esti-mated US $864.2 billion annually to the U.S. econ-omy, according to the United States Department of Agriculture (USDA). Furthermore, prospects of economic recovery should leave consumers with more disposable income, allowing for a higher consumption of meat products. Looking at the European market, per capita meat consumption is expected to reach 66.1 kg by 2023, according to European Commission Agriculture and Rural Development (ARD). The per capita consump-tion of poultry and meat in the US is estimated to be 91 kg in 2014, according to the USDA.

Not only is meat and poultry consumption large and growing, there is also an increase in demand for atypical meats as well. In the year ended June 29, 2012, sales of not-so-typical meats like buffalo,

venison, duck and various types of offal (organ meats) grew an average of 6 per cent in the U.S. and generated more than US $350 million in combined sales.

Dr. Gary Garcia at the University of the West Indies, St Augustine has developed a proto-type agouti (a large guinea pig) farming system. Agouti wild meat can sell for US $44 or more per kilogram compared to pork, which retails at around US $3.00/kg. This example, demonstrates the significant niche potential of exotic meats to Jamaica.

As consumers continue to become more health conscious and gain experience with exotic meats in restaurants – where most trendy foods debut – the upward sales growth is expected to continue in the long term. By catering to health-minded consumer demands and an understanding regional, seasonal and cultural preferences in the major export markets, Jamaican meat processors can take advantage of this growing exotic meat trend. However, the sanitary and phytosanitary standards must be aggressively adhered to in order to capitalise this opportunity.

The growing trends in health, beauty and wellness also provide key opportunities for Agro-process-ing in Jamaica. Consumers are looking for healthy options when eating out or purchasing processed foods at the grocery. The demand for more natu-ral-based products, whether for consumption or for external applications such as skin products, is expected to increase. Moreover, the Caribbean is

growing in terms of the spa and wellness sector and many Caribbean based spa products are on the rise using natural products such as coconut, Aloe Vera and a variety of fruits such as papaya and mango. These natural ingredients are used to make essential oils, skin care products, soaps, creams, etc.

Exotic / Wild Meats

Spa, Health and Wellness

10.6.4

10.6.5



As a result of growing health consciousness among US consumers, many industries are developing healthier products to meet rising demand. Added to this is the fame and notoriety of top Jamaican athletes such as Usain Bolt. Many avid followers of Usain are very interested in his “secret” of success,

one of which being his diet. Jamaica can piggyback on the growing health trend and the popularity of its athletes to offer health and high-performance food products such as yams and dasheen, for example.

The frozen food category in past decades estab-lished itself as the “new fresh” and convenient solution to prepared meals through an expanding combination of product and packaging innovation. However, as consumer perceptions of the fresh-ness and healthfulness of frozen foods wanes and the perceived nutrition and convenience of fresh prepared foods accelerates, the frozen prepared food category is facing a long-term declining future relative to the rapid growth of fresh produce, much in line with the canned foods it displaced decades ago. However, this trend is only expected to become mainstream in the very long term and frozen prepared foods still remains a viable opportunity for Jamaican Agro-processors.

The fresh offer is a primary driver of store choice, just behind value and convenience in terms of overall importance. In fact, 70% of US consumers in our recent global study say that “access to the best quality fresh products is the most important consideration” when choosing where to shop, according to Marsh and McLennan, 2014.

While fresh represents a huge opportunity for Jamaican agro-processors, it’s not easy to get right – and getting it wrong could be very costly, both in terms of immediate loss of products and the financial costs attached and also in in terms of customer satisfaction.


Fresh Foods

10.6.6

10.6.7

The global market for nutraceuticals is projected to reach US $250 billion by 2018, according to Global Industry Analysis, Inc. Performance-wise, nutraceuticals registered a steady growth pattern in the post-recession years. An aging population has been a major factor contributing to the growth of the nutraceuticals market. By the year 2020, the number of individuals who are aged 60 years and above is expected to surpass 1.0 billion, with 70% of this populace dwelling in the developing nations.

There are distinct opportunities for growth in the food, beverages and supplements market. Demand for healthy food and drink has increased in recent years, particularly for multi-tasking prod-ucts, which provide additional health and well-be-ing benefits. The term ‘nutraceuticals’ is used to describe products of this nature, including foods, beverages and supplements.

The nutraceuticals industry is geared to meet the rising demand for health foods and products as companies with sufficient capital for scientific research enter the nutraceuticals space. The trend towards personalised health nutrition is expected to provide solutions to successfully prevent, manage, and treat chronic medical illnesses. Also, the availability and accessibility of healthy foods in the developing nations, evolving understanding of the concepts that promote healthy living, and the launch of targeted foods and products scientifi-cally formulated to address disease conditions are expected to support the growth of the nutraceu-ticals market in the near future. These growing trends including the demographic shifts in global populations, increased health consciousness, grow-ing urban populations and the increasing busy and

stressed out lives of the global population present a real opportunity for the nutraceuticals industry in Jamaica.

Although the Nutraceuticals industry is still in its infancy stage, having been officially launched in March 2015, nutritional and herbal / folk medi-cine has been a tradition in Jamaica for many decades. The benefits of many herbs for medicine and performance purposes have been dismissed by mainstream medicine on the grounds that it lacked scientific rigor and evidence. However, many Jamaicans can attest to the benefits of locally indigenous plants for medicinal and performance purposes. At a time when ‘natural is good’, nutra-ceutical products are assuming a middle ground between food and drugs due to the growing body of opinion that supports their role in maintain-ing health and contributing to the treatment of diseases.

A key first mover in the burgeoning industry is the Bio-Tech R&D Institute. Dr. Henry Lowe has been a key shaper of the industry to date. For years, Jamaica has been sitting on a virtual gold mine of locally grown medicinal plants while the world has been developing a lucrative international market in nutraceuticals. Research by the Bio-Tech R&D Institute shows that of the one hundred and sixty established medicinal plants in the world, Jamaica is home to over 80 of these plants including aloe vera, industrial hemp, ackee leaves, cinnamon, God bush (chaney root), Guinea Hen Weed to name a few, not to mention the wide range of naturally grown fruits and vegetables that support general health and wellbeing.

The Nutraceuticals Sub-sector10.7

Definition and Composition of the Sector10.7.1

A key sub-sector of agro-processing is the new and developing nutraceutical industry in Jamaica. The NES global trends and strategies for agro-processing are also targeted towards the nutraceutical sub-sector. There are however, key strategies and actions that are specific to nutraceuticals. A brief analysis of the nutraceutical industry is presented in the sections that follow.



Globally, US and Japan are the most developed markets for nutraceuticals, due to the consumer acceptability achieved in these regions. India, China and Brazil are developing nations which show huge potential for the nutraceuticals market. Germany and Israel have emerged as the key innovation hubs of the nutraceutical industry.

Germany, France and Italy are the key markets in Europe, while UK and Spain have emerged as the key test markets, resulting in a high frequency of

product launches. Germany is the lead European market accounting for 42% market share. France distantly follows Germany with 24% market share. European food and beverage manufacturers are moving towards consolidation, resulting in a high number of acquisitions in the nutraceuticals space.

The US nutraceutical market is valued at US $50.4 billion and is led by dietary supplements (38% market share) and functional foods (34% market share).

While nutraceuticals are available globally, regional differences in consumer preferences, knowledge, and traditions have created a fragmented market environment, forcing global companies to assess and address some processes globally and others locally.

In terms of consumer scope, the nutraceuticals industry offers players an increasing range of consumers to target – from niche consumers (e.g., highly focused “pseudo health experts”), to consumer segments with specific interests or medical concerns (e.g., sports enthusiasts, diabet-

Key Nutraceuticals Markets10.7.2

Figure 10Key Global Nutraceuticals Markets

Source: The Global Nutraceutical Industry, Frost & Sullivan 2014

ics, or heart patients), to mainstream consumers (e.g., those seeking natural cold remedies, and homeopathic solutions, etc.). It is essential that firms in the industry or those wishing to enter the industry recognise and begin to formulate their strategies for those segments in which they are most likely to successfully compete.

While targeting niches is key what is even more important is the distribution of the products. Formerly available only in natural food stores or nutrition centres, nutraceuticals can now be found in drugstores, grocery stores, large discount chains, and through catalogs and the Internet. However, with so many companies entering the market, and with so many products available, there are signifi-cant distribution risks. Trends are already showing the effects of oversupply in the herbal-products segment of the industry, as compounds such as echinacea and aloe vera have been commoditised by the major players. Such products are now avail-able in a variety of outlets and are largely undiffer-entiated in terms of either safety or efficacy. When developing a nutraceuticals strategy, companies

must carefully weigh their distribution options and consider the potential for other channels to safe-guard and enhance their profitability.

Another factor to consider is that since natural compounds cannot be patented, companies are finding it difficult to create intellectual property from their research. This is where branding and positioning of the Jamaican brand will be critical for the success of this industry. Jamaica is already well-known for industrial hemp (cannabis) and this global awareness can be harnessed for success in the nutraceuticals industry using this very essential herb.

The nutrceuticals industry is regulated (as in the case of all other foods) by the Codex Alimenta-rius (an international body regulating food safety recognised by the World Trade Organisation). However, different countries and regions have specific laws and regulations that must also be adhered to.



Section 2Agro-processing/Agro-business Value Chain and Strategic Plan

Key Nutraceuticals Markets

Key Nutraceuticals Markets

10.8

10.9

Agro-processing/Agro-business Sector Strategic Plan10.10

Agro-processing/Agro-business Sector Vision

Agro-processing/Agro-business Sector Objectives

Agro-processing/Agro-business Sector Targets

10.10.1

10.10.2

10.10.3

The Vision 2030 Jamaica incorporated the agro-processing as a sub sector under the broader manufac-turing sector. A vision statement for manufacturing was articulated in that document. The vision for the Agro-processing and Agro-business sector is therefore an adaptation from the Vision 2030 Jamaica and is presented as follows:

To improve the competitiveness and export readiness of the Agro-processing and Agro-business sector

• To grow the agri-processing / agro-business sector by an annual average of 12% for each year between 2015 and 2019

• To reach total output value of US $560 in 2019• To create 8,000 more jobs in the sector by 2019

The objectives, strategies and actions that follow are therefore designed to achieve each aspect of the vision:

• Market led sector• High value-added, world-class products • Appropriate technologies

• Environmentally sustainable processes• Motivated, productive employees • An enabling business and regulatory envi-

ronment

A dynamic, vibrant, market-led sector making high value-added, world-class products… using appropriate technologies and environmentally

sustainable processes, linked to other sectors, with motivated, productive employees, within an enabling business and regulatory environment



Agro-processing / Agro-business Action Plan10.10.4

There are a number of issues and challenges as expressed in the SWOT analysis above as well as in the Vision 2030 Jamaica – National Development Plan. Many of these issues are addressed in the action plan below. A number of issues, however, are crosscutting in nature, e.g. export financing, market access and trade information, capacity building, standards and quality and logistics. These are therefore accounted for under the action plans for the crosscutting areas.

Ref. #

Strategy Activities TargetRespon-sibility

Time Frame

Bud-get

(US$)

Objectively Verifiable Indicators

A.1

1. To move away from traditional and domestic focus only and to cultivate a greater export and market focus for Agro-processing and agro business suppliers through training and market intelligence

2. To improve the commu-nication systems within the sector through effective use of information technology

1. To provide market and export intelli-gence on a timely basis to suppliers using an effective distribution method (text mes-sages, social media, etc.). Information on market intelligence needs to be arranged by products.

Suppliers in the Agro-busi-ness and Agro-process-ing sector – ALL levels

JAMPROEarly 2016

10,000

Market report completed and disseminated to target group and updated annually

A.2

2. To pool and streamline contact databas-es available to RADA and other agencies such as JEA, JMA, JAS, JAMPRO, etc. to create a single database system that is available on an online / intranet platform that is accessible to all key support agen-cies to facilitate the supply of services.

Support agencies and Suppliers in the sector - ALL levels

Collabora-tion among RADA, JEA, JMA, JAS and JAMPRO

Early 2016 and on-go-ing

3,000

Single database system devel-oped and access made available to all support agencies

A.3

3a. To utilise a single database system for distributing market intelligence to end users in the sector.

3. b. To partner with an appropriate service provider to disseminate information (e.g. market intelligence, export-related data, events broadcast, etc.) in an affordable and timely manner, e.g. such as SMS text.

Suppliers in the sector – ALL levels

JAMPRO3rd Quarter 2016

20,000

Database system being used for market intelligence dissemination Partnership developed and preferential rates acquired by Q3 2016

A.4

4. Educate suppliers, through an appropriate training programme, on the social and economic benefits of exporting. Demonstrate the opportunities that exist outside of Jamaica for business growth. (Seminar / Workshop format)

Focus on MSMEs and non-exporting suppliers

RADA 2016 120,000

Two workshops/seminars per year between 2016 and 2019

A.5

5. Review, revamp and update RADA website and Provide pertinent train-ing and export information on the RADA website


RADA / Consultant

Mid 2016

7,500Website updated and new content added

A.6

6. Target the extended family of farmers with training and capacity building (e.g. importance of export, the export process, business management, accounting, ecommerce and online mar-keting.). Classes can take place at schools in targeted areas.


RADA with support from Ministry of Education and local schools

Early 2017

85,000

20 areas targeted 1,000-1,500 MSMEs / farmer families targeted

A.7

7. Expand (quantity) and further develop (type of services provided) the ex-tension officer system at RADA. Extension officers to provide “door-to-door” services including information sharing on key marketing trends and other training and education services.


RADA with support from JAS

End 2017

100,000

Services and reach of ex-tension officers expandedThe number of extension officers expanded to reach more entities in farther rural areas

Ref. #


Time Frame

Bud-get

(US$)


A.8

3. To develop strong partner-ships with support services eg. Bureau of Standards, Scientific Research Council, RADA, Min-istry of Agriculture, to improve the level of efficiency and standards in the sector..

8 Review and revamp the existing moni-toring and evaluation system of extension officers at RADA

RADA Exten-sion Officers

RADAEnd 2017

15,000

New Monitoring & Evaluation system imple-mented

A.9

9. To make becoming export ready more easily accessible/ less bureaucratic. Review process and fill gaps and improve any inefficiencies

Particularly for MSMEs and non-exporting suppliers

JAMPRO, JEA

2017 20,000

- Export regis-tration process reviewed- Inefficiencies identified- Recommen-dations for improvements developed and implemented

A.1010. To review the possibility of re-estab-lishing the Agriculture Marketing Corpora-tion (AMC) and reinstate export brokers.


RADA, JAS with sup-port from JAMPRO

2017 100,000AMC reinstated Export brokers implemented

A.1111. Enhance and promote the JBOS system to facilitate collaboration among suppliers along the value chain


JAMPROEnd 2016

15,000

JBOS re-estab-lishedJBOS promoted to entire sector

A.12

12. For the key markets and priority prod-ucts, prepare a compendium of standards and market requirements and make available to all exporters


Bureau of Standards

End 2016

10,000

Compendium of standards in key markets for prior-ity products are developed and disseminated

A.13

13. Ensure that local standards for priority products are in line with international best practice so that exporters are compliant at the source, e.g. organic and fair trade certification.


Bureau of Standards with sup-port from RADA

End 2016

200,000

Local standards are reviewed and brought into line with international best practice

A.14

14. Educate farmers and agro-processing suppliers on the importance and benefits of fair trade and organic farming and prod-ucts. Consider incentives.

Farmers and agro-process-ing suppliers

RADA / Centre for Excel-lence for Advanced Technol-ogy in Agriculture (CEATA)

End 2017

25,000

Short video Radio pro-grammeOrganic standard distributed

A.15

15. Explore the possibility and feasibility of crop zoning / crop clusters to improve synergies and efficiencies and eliminate the issue of too many farms with small acreage scattered across the country.

Suppliers in the sector – mainly MSMEs

RADA 2017 20,000Crop zoning feasibility study carried out

A.1616. To develop mechanisms to encourage greater collaboration and cooperation among suppliers along the value chain


RADA, JAS with support from JEA, JMA and JAMPRO

Mid 2017 25,000Collaborative Mechanisms in place

A.17

17. Encourage and incentivise suppliers to adopt new technologies in keeping with international standards to improve efficiency and create greater scale econ-omies


RADA, MIIC, MOF

End 2017

-Incentives in place



Ref. #


Time Frame

Bud-get

(US$)


A.18 18. Revamp the Venture Capital Fund for the purchase of machinery for the sector. Machinery to stand as capital.


MIIC / Ministry of Finance

End 2017

- - Venture capital fund revamped and properly functional- New moveable assets law promoted (Se-cured Interest in Personal Property Act)

A.19 19. Partner and negotiate with and incentivise appropriate suppliers of critical machinery for the sector (such as irriga-tion equipment) to supply machinery at preferable rates.


MIIC / JAMPRO

End 2017

50,000 Potential partners identifiedNegotiations carried outOne to two partnerships for each critical area / product developed with suitable incen-tives

A.20 20. Key suppliers for the sector eligible to set up within the Special Economic Zones to make supplies more affordable to the sector


MIIC / JAMPRO

End 2017

Approval for SEZ set up awarded

A.21 4. To improve branding and positioning of Jamaican Agro-processing products (NB: see actions under market access and trade informa-tion for additional marketing initiatives)

21. Ensure that local products bear a consistent and standardised “Made in Jamaica” or similar mark to ensure the authenticity of products originating from Jamaica. Bearing the mark MUST be an export requirement. BSJ has a system in place that should be explored for broader coverage.


BSJ with support from JIPO

End 2016

150,000 Appropriate mark developed or agreed on

Mark implement-ed and its use enforced for ALL exporters

A.22 22. Develop and implement organic and fair trade certification for produce originat-ing from Jamaica


Bureau of Standards with sup-port from JAS and RADA

Mid 2017 75,000 Organic and fair trade certification developed and implemented

A.23 23. Position and promote Jamaican Agro-processing and Agro business products as organic and fair trade certified to justify higher prices and access relevant niche markets


JAMPRO (MIIC)

End 2017

100,000 Suitable promo-tions campaign developed and implemented

A.24 24. Develop a policy framework to deal with pest control


Ministry of Agriculture

Mid 2016

25,000 Policy developed and implement-ed

A.25 5. To effectively use the agro-parks to drive export growth of the agro-processing sector

25. Use at least 3 agro-parks to support and promote organic farming

Farmers – all levels

Ministry of Agriculture

End 2017

300,000 3 agro-parks designated and used to support organic farming

A.26 26. Provide farmers with virgin land for agriculture while existing cultivated land is lying fallow


Ministry of Water, Land, Environ-ment and Climate Change (MWLECC)

End 2017

- 500 acres or more of virgin land provided to farmers for organic farming purposes

A.27 27. Train farmers to monitor fertilisation and chemical levels on farms in order to stay within the requirements of organic farming


RADA End 2017

450,000 3,000 farmers trained

A.28 28. Use agro-parks to supply extension services to farmers on small acreage

Small Farmers Ministry of Agriculture with sup-port from RADA

End 2017

150,000 1,000 small farm-ers supported

Film and Animation Sector Strategy11Section 1

Film and Animation Sector Analysis

The global film industry was projected to gener-ate over US $90 Billion in 2014 and is further predicted to reach US $110 Billion by 2018, according to PriceWaterhouseCoopers. This represents a forecasted average annual growth rate of 4.5% between 2013 and 2018. The rela-tively marginal rate of growth indicates that the global film industry is approaching maturity (a long period in the life cycle of an industry of insignifi-cant growth followed by declines). This type of phenomenon can be targeted head on through extension strategies through new innovations or

new markets. With the absence of any new inno-vations, Jamaica will need to access new markets and market segments. In addition, competing in the mainstream markets and market segments will be very difficult, e.g. mainstream feature film production in markets such as North America will be difficult to penetrate because these markets are highly saturated with mega producers corner-ing market share. Jamaica will need to carve out a niche and seek strategic partnerships in order to remain relevant.

The Global Film Industry at a Glance11.1



Figure 11Global Filmed Entertainment Revenue from 2013 to 2018

(USD Billion)

Figure 12Most Popular Genres in North America by Revenue (Average for 1995-2013)

(USD Billions)

The film industry comprises establishments that primarily produce and distribute motion pictures. Distributors work with theatrical and home media entertainment products, including digital and phys-ical versions. Movie producers also hold distribu-tion rights to movie libraries that receive revenue from cable and network TV. The products that typically make up this industry include:

• Comedy• Adventure• Drama• Action• Thriller/Suspense

• Horror• Romantic Comedy• Musical• Documentary• Western

Comedy was the most popular film genre in North America generating over US $56 Billion in revenues between 1995 and 2013, representing almost one quarter of all film revenues for that period. Comedy is followed by Adventure (US $42.3 billion) and Drama (US $38.9 billion).

Source: Statista, 2014

Source: PriceWaterhouseCoopers and Statista, 2014

Figure 13Global Annual Revenues of Digital Animation Movies (USD Million)

The global animation sector is estimated at US $222 billion in 2013 compared to US $62.3 billion in 2006, according to the Global Anima-tion Industry Report 2014. The digital animation sector is broadly segmented on the basis of sub segments such as, entertainment, interaction and navigation. The most recognized of these sub-seg-ments is digital animation for entertainment. Furthermore, animated entertainment includes segments such as movies, Visual Effects (VFX), TV & Broadcast, Computer Generated Imagery (CGI) and Direct to DVD, according to the Global Insti-tute of Gaming and Animation. Digital animation technique/method for each of these segments is further divided into 2D animation and 3D anima-tion, though CGI is largely accepted to refer to animation using 3D techniques. The global anima-tion market is segmented into four geographies: North America, Europe, Asia-Pacific and Japan, and ROW (Rest of the world). Consider that the

Digital Animation movies segment has been grow-ing at an average annual growth rate of 14.5% between 2002 and 2014, generating in excess of US $1 billion per annum. It is key to note that digitally animated movies constitute 0.5% of the overall animation and gaming sector (globally animation is considered more directly related to gaming). The fact that this segment represents only 0.5% of the total revenue generated by the global animation and gaming industry points towards the necessity of developing a cluster of services/products rather than focusing entirely on feature production/movies. Development of this cluster focus is also an opportunity for growing a mix of outsourcing services in this sector. Therefore, developing skills in key animation niches and forg-ing strategic partnerships to attract investments in animation outsourcing will be crucial for the animation sector.

The Global Animation Industry at a Glance11.2

Source: Nash Information Services, 2015



In addition, the rapid advancement of technology has made the ability to produce digital animation available to the masses and the animation industry is one of the fastest growing industries worldwide (approximately 14.5% per annum). The demand for animated entertainment has expanded with the increase in feature movies, broadcasting hours by cable and satellite TV as well as with the grow-ing popularity of the Internet.

Today, animation products are increasingly used in films, TV programmes and commercials. Animation products also have applications in the non-enter-tainment segment such as the education, medical, architecture, and legal fields. The global non-en-tertainment animation industry, including work in scientific and medical animation, now accounts for revenues in excess of US $15 billion, according to the Institute of South Asian Studies. This is consid-erably larger than the movie segment and points to an untapped opportunity for Jamaica. It further substantiates the need for a strategy that focuses on developing an animation cluster rather than focusing on feature production alone.

Another key global trend to consider is that the global animation sector is highly fragmented and competitive. On the supply side production is dominated by major Hollywood giants such as Walt Disney, Sony and Cartoon Network. Competing directly with these giants is unadvis-able. An approach of partnership is more feasible, however, Jamaica will need to excel in terms of high-level skills in the sector.

In terms of global labour supply and talent in the animation sector, there is a concentration in Asia, particularly India. There are about 7,500 animation companies worldwide, but only a handful of them

reap revenues of US$1 million and above annu-ally. Furthermore, the new world of alternative distribution channels represents both an exciting opportunity and a considerable threat because it increases competition and exposes suppliers to content infringement and piracy. Again, this points to the need to do more to develop the quantity and kind of skills needed to take the industry to a higher level.

The global scenario points out that the industry will continue to be vulnerable to external forces and be required to react to each new stressor. Individually each government initiative appears to be important and useful in supporting the industry. However, while they are necessary, they are not sufficient to achieve the kind of structural changes that will be required for the industry to be inter-nationally competitive. For example, the industry still remains largely informal in nature, even though there are a few established and well-anchored companies in operation. In addition, Jamaica has not been able to significantly penetrate interna-tional markets and develop notable competitive advantage in the global animation sector.

In general the strategic focus of the animation sector should be as follows:

• Create clusters of services• Attract investments in animation

outsourcing • Explore the potential of the non-enter-

tainment animation segment• Build a strong talent base in animation to

serve both local and international needs• Create a more formal and organised

sector

The Global Animation Industry at a Glance cont’d

There are a number of unique trends in the global film and animation industry.

1. Blockbusters outside of the USA have mainly been USA-produced comedies, breaking records all over the world. National produc-tions or co-productions, on the other hand that are not distributed by major Hollywood studios have had little to no traction beyond national borders. This trend points to the need for a strong distribution strategy and in the case of animation, a shift in focus away from feature production to a mix of services as well as the non-entertainment segment.

2. Global film production is very concentrated with 7% of the mainstream film-producing countries making 65% of all feature films glob-ally. India alone accounts for 20% of all films produced worldwide.

3. Mainstream demand is down but reve-nues are on the rise. Between 2005 and 2011, world admissions (mainstream cinema demand) dropped by 12.8%. However, box office revenues rose by 27.8% over the same period (average ticket price increased by 46%, especially since the 3D boom). In other words, the international film screen market is losing demand but increasing revenues – mainly due to higher ticket prices.

4. The BRICs are on the rise. Similar to the trends in global economic developments, the BRIC economies (Brazil, Russia, India and China) are gaining market share in the film sector (both in terms of demand and supply). China is the main player : based on conserva-tive projections, by the year 2020 China will overtake the USA as the main film market in the world in terms of the volume of films produced and consumed.

5. In the context of many large countries, such as China, Russia and India, “lacking cinema screens, the development of their cinema infrastructure could give a push to the world film market” (Miller, 2008). This state of affairs could be the result of a change of paradigm related to audiovisual consumption that is facilitated by the rapid diffusion of technology.

6. The digitisation of screens (a radical change since the beginning of cinema) has rapidly increased, especially since 2010. Neverthe-less, the reduction of many distribution and exhibition costs is not changing the context of screen concentration and vast territories have under-developed cinema infrastructure.

Key Trends in Film and Animation11.3



Technology Changes Everything11.3.1

A growing percentage of viewers are watching movies, television series, shows, clips, shorts, docu-mentaries, etc. mainly through the Internet (in their home, office, or even walking down the street on their mobile device). Nevertheless, the audiovisual industry has not yet received high revenues from these sources, such as the major profits that were generated by home video from the mid-1980s to the mid- 2000s. The potential however, to use these Internet based media as a ‘sampling’ / ‘testing’ ground is enormous.

Historically, rights to sell a film around the world have been split between a “US sales agent” (since the US is the principal market of choice for many film producers) and an “International Sales Agent.” Deals with international buyers have traditionally been generated by foreign sales agents who put together a slate of films and then take them as a package to annual sales marketplaces including the Berlin Film Market, Cannes, miptv (Marché Interna-tional des Programmes de Télévision), the Toronto International Film Festival, and others. This creates cost efficiencies for the sales agent, but today it has become an antiquated approach that no longer works for the individual filmmaker and film.

Today, the reality is that most independent films, even highly successful ones in the United States, have very little to no distribution in the majority of countries around the world.

The rise of the Internet has facilitated globalisation. Consumers are more connected globally through the World Wide Web and can organically form online communities on popular social networks such as Facebook, Twitter and others, which are global in nature, not regional or national. In fact,

up to 40% of the audience that is following an independent film on Facebook is most likely living in a country where the film will never be released (Schiller, 2014).

Today, the most successful (i.e. profitable) indepen-dent films are those that are combining the power of discovery and the sheer volume of customers that popular online marketplaces like iTunes and Amazon have, with the power of a growing suite of digital retail tools and real time analytics that are now being offered by self-serve platforms such as VHX, Vimeo, and Gumroad.

Films that are taking advantage of a strategy that equally supports both the traditional established players like iTunes, and the emerging players like VHX, are benefiting from higher sales on both platforms due to more positive word-of-mouth on social networks like Twitter and Facebook. Each platform caters to different types of buyers, thus increasing overall revenues for the same film when it is available on both.

Technology also brings suppliers and consumers closer together. It allows suppliers to reach, engage and sell to customers in a number of ways – tele-phone, email, social media, website, blogs, instant chat, mobile messaging, video, etc. These addi-tional avenues of reaching and engaging custom-ers give suppliers the power to create ‘high touch’ experiences through ‘high tech’ communication. It also allows consumers to be more knowledge-able and demanding, creating additional pressure on suppliers to meet and exceed their customers’ expectations.

The outsourcing industry has many opportunities and Jamaica already has a footing in this industry. Animation is just one of the services that make up global outsourcing and is largely an untapped area for Jamaica. The global animation industry is also witnessing major structural changes. Impor-tantly, companies are outsourcing animation jobs in a big way. Any animation-related production in the Unites States or Canada is not exclu-sively produced in that country alone. Work is outsourced to many Asian countries like the Phil-ippines, China, Singapore and India. The Animation outsourcing sector in India was worth US 1 billion in 2012, according to British Columbia Trade and Investment. Approximately 70% of India’s animation industry’s total revenues come from outsourced services. The major factor driving the shift towards animation outsourcing in Asia is the

availability of low-cost labour, high quality skills and a strong technology infrastructure in this region. Jamaica already has a good footing in these three critical areas. However, Jamaica also possesses nearshore advantage to key markets such as the US and Canada. It also has a solid English-speaking population, of which many Asian countries cannot boast.

Non-entertainment animation outsourcing services are also in high demand and the reve-nue potential is relatively high (non-entertainment animation generates an estimated 15 times the value of the animated movie segment). Animated products also have applications in the education, medical, scientific, architecture, fashion, aviation and legal fields.

Independent film production is growing rapidly, driven by limited funding options on the main-stream supply side and growing demand for niche content on the demand side. There were more than 12,000 films submitted in 2013 to the Sundance Film Festival competition, 4,057 feature films and 8,161 short films, according to the

Sundance Institute (2014). This is up from a mere 315 submissions in 1994, representing an average annual growth rate of 21%. Over the last 15 years, the US alone has seen nearly 7,000 film festi-vals, the breeding ground for independent films. There are currently over 3,000 active film festivals, according to the Film Festival Survey of 2013.

The Growth in Outsourcing of Animation Talent

Independent Films are Growing in Popularity

11.3.2

11.3.3



Piracy is on the Rise

The Influence of Incentives and Subsidies

11.3.4

11.3.5

While the Internet provides an easy-to-use and very accessible platform for promoting, distributing and consuming films the issue of piracy continues to be a challenge. As fast as new technologies are being implemented to stem the problem of piracy, newer ones are coming on stream that makes it easier to copy, share and download content. One school of thought, (though anecdotal in nature), suggests that the pirate market is very different

from the legitimate market, in that the majority of persons who are illegally consuming content would not have otherwise paid for that content. In other words, they are only consuming because it is free. The majority of those who are willing to pay will pay. Nevertheless, piracy is an issue that must be considered in any online selling and distri-bution activities.

Several countries subsidise their national film industries, including animation, and therefore, strat-egies such as co-production have been adopted to explore global market opportunities and produc-tion subsidies.

Direct subsidies can be received from national cinematographic agencies, the national film commission in charge of financing national films, or special funds dedicated to national film produc-tion. Indirect subsidies can take the form of screen quota or censorship directed towards foreign films

to control foreign supply in an attempt to give local content a boost. Tax incentives are also forms of indirect support.

Nevertheless, the film and animation sector does not benefit from public support in the main producer of the world, India, and the fourth producer Japan. In the case of USA, the cinema sector receives tax exemptions, deferred payments or accelerated amortisation.

The market demand for film is highly concen-trated. The top 10 countries represent approxi-mately 75% of world box office revenues. The top

three markets alone account for nearly US $17 billion in revenues.

While North America produced the highest demand in terms of revenues (value) in 2013, it was the emerging markets of China and India that generated the highest demand in terms of admis-sions (volume), this is largely due to the sheer size of these markets. Consider also, that the infra-

structure, i.e., available screens, is less significant (per capita) in these markets. These two coun-tries alone accounted for over 60% of total global admissions. The US accounted for a further 20%, according to the European Audio visual Observa-tory. See Figure 15 overleaf.


Global Domination by a Few Players11.4.1

Figure 14Top Ten Markets by Box Office Revenues, 2013

(USD Billions)

Source: Motion Picture Association of America (MPAA), 2014



Figure 15Top Ten Markets by Demand, 2013 (Millions of admissions)

Table 7Market Assessment for the Film and Animation Sector in Jamaica

Source: European Audiovisual Observatory, 2014

Global Markets for Animation

Priority Markets for Jamaica Film and Animation

11.4.2

11.4.3

The major animation markets in particular, include the United States, Canada, Japan, China, France, Great Britain, Korea and Germany, according to Research and Markets. The outsourced computer

animation production market is increasingly being tapped by North American and European film and television program producers.

The global markets for film and animation are highly saturated and therefore the recommended approach that Jamaica should adopt is a targeted

/ niche approach. In particular Jamaican film and animation producers should target the Jamaican Diaspora and the Independent Film markets.

MarketMarket

Size

Demand for Film and

Animation Content

Demand for Independent

Film and Documenta-

ries


Lan-guage

Proxim-ity

Cultural Proximity


USA High High High Highigh High High High

Canada High High High High High High High

UK High High High Medium -Low

High High High

Asia (Japan, Korea) High High High Low Low Low Low

Europe (France, Germany) High High High Low Low Low Low

Caribbean Medium Low Low High High High High

Africa (Nigeria) High Medium Low Low Medium Medium Low

Table 7Market Assessment for the Film and Animation Sector in Jamaica

Within the context of this NES document, the Diaspora is defined as the collective of long-term emigrants and the descendants of long-term emigrants (up to the third and fourth genera-tions), who are currently living abroad. Data for this subsection are drawn from the Ministry of Foreign Affairs and Foreign Trade (MFAFT), the World Bank, the International Organisation for Migration (IOM) in its World Migration Reports and the US Census Bureau.

The most recent report on Migration and Remit-tances Factbook 2011 published by the World

Bank provides an estimate of the stock of legal, first generation Jamaican emigrants abroad as 985,500 persons in 2010. This represented 36.1 per cent of the national population at that time. This is not greatly dissimilar from the estimated figure of 949,000 Jamaican emigrants worldwide reported by the 2010 World Migration Report (IOM, 2010). These figures are largely based on the number of legal emigrants of Jamaican origin.

The top three Diaspora markets (up to third and fourth generations) are as follows:

Not only is demand highly concentrated, but also when analysed at the country level, one observes that global film and animation production is also highly concentrated. Average worldwide film and animation production (2005-2011) was predomi-

nantly dependent on the Top 10 producers, which accounted for nearly two-thirds (65%) of produc-tion. The top five countries alone produced over 3,000 films on average per year. See Figure 16 below.

Jamaica Diaspora

Competitive Environment

11.4.4

11.5

Geographic Location Estimated Size Information Source

United Kingdom 800,000International Organisation for Migration –

Jamaica Mapping Exercise, 2010

United States 740,000 US Census Bureau, 2008

Canada 257,000 Statistics Canada, 2008



Figure 16Top Ten Film Producing Countries – Average Production 2005-2011

Figure 17Global Distribution of Film Production, 2011

Source: UNESCO Institute for Statistics, 2013

The major animation markets in particular, include the United States, Canada, Japan, China, France, Great Britain, Korea and Germany, according to Research and Markets. The outsourced computer

animation production market is increasingly being tapped by North American and European film and television program producers.

Source: UNESCO Institute for Statistics, 2013

The highly concentrated competitive environment indicates that in order for Jamaica to gain ground in film production it needs a focused niche approach. Competing directly with the established giants

such as North America and Europe in the devel-oped world, and India and Nigeria in the emerging world, may prove futile. The real opportunity for Jamaica lies in niche / independent films.

The three core areas of competitiveness for Jamaica in the film and animation sector are talent, technology and branding based on the authentic Jamaican culture. Marrying what makes Jamaica unique and special with the precise requirements

of the markets and facilitated by a strong talent base and adoption of advanced technology are the ingredients for competitive success of the film and animation sector.

The film and animation sector is built on ideas, content and intellectual property. Therefore, the main driving force of the sector is talent. Attract-ing, retaining and developing a diversified talent

pool with high-level skills pertinent to the film and animation sector will be crucial for competitive-ness.

Competitiveness in the film and animation sector is significantly facilitated by technology. Many developed markets in film and animation are moving ahead and creating competitive clout by adopting the latest technologies, such as in the case of 3D animation. Jamaica recognises the important role that technology plays in increasing productivity, reducing costs, improving quality and targeting customers.

The government has been providing tremendous support in assisting the economy to advance in technology such as the implementation of the

Technology Enrichment Programme. The stra-tegic decision to support the film and animation sector is a signal from the government of Jamaica in this regard. In addition, Science, Technology and Innovation initiatives continued to support the country’s drive to create more competitive business structures, in keeping with Vision 2030. The private sector needs to play its role and keep up with the latest technology in order to remain competitive.

How Can Jamaica Compete?

Talent

Technology

11.5.1

11.5.1.1

11.5.1.2



In order to make competitive progress in the film and animation sector it is necessary to differen-tiate Jamaica from the ‘crowd’. This can only be accomplished through the Jamaican brand and the

country’s unique and authentic story. Animators and filmmakers need to be able to ‘piggy-back’ on the strength of the Jamaican brand in expanding existing markets and penetrating new ones.

Branding – the Authentic Jamaican Story11.5.1.3

Global Markets for Animation

The Internet Should not be Ignored

11.6

11.6.1

The Internet is continuing to transform and drive dynamism in the way we conduct business today. IT has influenced the way consumers’ research, plan, purchase goods and services, and entertain themselves. The vast number of Internet users, the rapid rate of growth worldwide, the high level of penetration in developed and emerging econ-omies and the widespread distribution across the planet, makes the Internet a force to be reckoned with. Moreover, the Internet virtually brings the entire global market to the doorsteps of suppliers and at the fingertips of consumers.

In fact, the Internet cannot and should not be ignored. If the sheer number of Internet users in the world is not testimony to the importance of this useful marketing tool, then nothing else will be convincing.

There were approximately 3 billion Internet users worldwide in 2014, according to Nielson Online. This represents 2.6 billion more Internet users in 2014 than in 2000. The majority of Internet users are located in Asia (1.4 billion), Europe (582 million), Latin America and the Caribbean (320 million) and North America (310 million). Together, these three regions account for nearly 87% of the total number of worldwide Internet users in 2014.

For the film and animation sector, that is signifi-cantly dependent on digital technologies, the Internet has virtually brought 3 billion people to their fingertips. This is a virtual market place that cannot be ignored.

Unique and Authentic Content

Niche Content is the New “Mainstream”

Crowd Funding is More about Raising a Community not Money

11.6.2

11.6.3

11.6.4

The film and animation industry is primarily influ-enced by dominant markets, such as the United States and Europe. The principal challenge is how emerging sectors such as Jamaica, can stand out and adequately showcase their craft. The key is to showcase the unique and authentic Jamaica story to the world. The Jamaican stories are different from the stories of the dominant markets, and at its purest heart, that is what film is about: telling a story.

However, with the impact of digital technology, more and more stories are starting to emerge from lesser-seen film industries. Nigeria, Serbia, Croatia, Russia and South Africa, for example, are becoming more prevalent in American and Euro-pean art houses and film festivals. In India, inde-pendent filmmakers are bucking Bollywood’s influ-ence and returning to the roots of Indian cinema as defined by films from legendary Indian directors.

As more and more films are available on demand at any time, and the available catalogues on marketplaces like iTunes and Amazon continue to grow, more and more movie fans are seeking out films that cater to their specific passions and inter-ests. Today, they know that if a film exists, they can most likely find it. One only has to look at the Top Ten highest selling documentaries each week on iTunes to know that niche content is what’s selling. And this content is not coming from the estab-lished distributors or the box office successes. It’s coming from smaller, mostly under the radar

companies, who are realizing that films that cater to specific passion points and communities are the most profitable films to release. The key to success with these films is the fact that traditional adver-tising and marketing costs can be greatly reduced without decreasing sales and income. These more niche films that tap into built-in communities online are now outselling their more heavily promoted studio films that are being released by established players with heavy marketing after coming off of high grossing - yet often unprofitable - theatrical releases.

The Internet has not only made it easier to reach markets it is also making funding more accessible. One such Internet-based funding opportunity is in crowd funding. However, crowd-funding sites are taking on a greater social role and should not be viewed as merely a source of raising funds. The real power of these platforms is about creating fans and enrolling loyal ‘investors’. Someone who is willing to part with even $1.00 to fund a film is more than a financier but has become a loyal fan. Crowd-funding campaigns filter out fans for the filmmaker.

More than any previous digital or social media destination (including popular sites such as, Face-book and Twitter), crowd funding sites such as, Kick-starter and Indiegogo, create the most important and impactful communities for content creators on the Internet.

Producers who take full advantage of the commu-nity tools and analytics offered by these social crowd-funding platforms will benefit from them in ways that overshadow the value of the money raised.



Focus on Outsourcing 11.6.5

Jamaica’s animation industry will need to move swiftly up the value chain if it is to avoid the down-sides of being caught in an increasingly commodi-tised market.

The animation industry offers significant potential for specialised outsourcing services. “According to leading international animation companies, there is a demand gap of about 30,000 animators in the outsourcing of animation production – of which about 5,000 could possibly be sourced in the Caribbean.” (World Bank 2014).

Outsourcing of animation has become wide-spread. Many entertainment giants such as The Walt Disney Company and IMAX are beginning to outsource an increasing amount of their anima-tion production to Asian countries, particularly India. A positive factor making Jamaica a poten-tial outsourcing destination for animation films is its vast base of English speaking workforce as well as its cultural and geographic proximity to major markets such as North America. Animation, which requires understanding of the English language in order to lip-sync the animated media to the audio dialogue, benefits from this particular talent that the Jamaican workforce possesses. There is a

critical need for Jamaica to develop highly skilled manpower for the animation industry through various training programs.

Jamaican animators will need to be highly cost competitive to be able to match up with other main animation outsourcing economies such as India. In the US, an average animator could cost in the vicinity of US $125 per hour. Jamaica will need to better this price to stay competitive. In India the average cost is US $25 per hour as a point of reference.

As a technology based industry, animation outsourcing could benefit from the initiatives that the GoJ is developing to support and promote the outsourcing sector in Jamaica. This is an opportu-nity to attract investors in this type of outsourcing. The infrastructural groundwork has already been laid and capacity is available, such as the Naggo Head Technology Park. Some of the available acreage could be assigned for animation outsourc-ing and the proper incentives could be put in place to attract animation-outsourcing companies. This will present a real opportunity for employment creation and skills development.

Trading in Intellectual Property

The Jamaican Film Sector

11.6.6

11.7

Ideas and knowledge are an increasingly important part of trade. For the film and animation sector intellectual property (IP) can become a high value source of revenue for the sector. Movies are bought not because of the DVD packaging or the layout and design of a website but because of the content and creativity that goes into the produc-tion. Therefore it is the IP that is the main value added to a production.

Jamaica needs to position itself to take advantage of this high value source of revenue. Capacity building in script writing for example, will be essen-tial in order to take advantage of this opportunity.

Protection and enforcement of IP rights will become a crucial issue for the sector moving forward. The WTO’s TRIPS Agreement provides

some benefits in this regard as it attempts to narrow the gaps from one market to another in terms of IP protection and promote international standards in this regard.

In addition, as it relates to trade of IP as well as film and animation products there is a further provi-sion under the CARIFORUM-EU EPA, which has a cultural Protocol that provides for co-production agreements between the EU Members and CARI-FORUM States in the Audio-visual sector including cinematography (including intellectual property in this area). The Protocol also provides for coopera-tion and technical assistance in a number of areas in the cultural sector. This is an opportunity that the film and animation sector needs to pursue and take advantage of.

Jamaica’s film sector is usually defined as a creative industry. The local film sector began emerging in the late sixties and by the late seventies, there were a handful of local productions, both feature film and television. Along with our geographic location, the country possesses resources for the production of feature films, with a developed theatrical community, playwrights and experienced production crews. The components of the local film industry are:

• Creative Content - screenwriters, film directors, art directors, actors, direc-tors of photography, music composers, editors;

• Production - producers acquire the rights for a property, assemble the creative team, secure financing, develop the prop-erty and arrange distribution;

• Distribution - local, regional and interna-tional; Exhibition - theatrical (cinemas, DVD video outlets) and non-theatrical (schools, Government and other institu-tions); Broadcasting - television, direct television, cable, pay-per-view, specialty and conventional channels.

Products of the local film sector include feature films, documentaries, television dramas and sitcoms, entertainment programs, commercials, corporate productions, Government productions, educational programs and music videos.



Film and Animation SWOT Analysis11.8

• A well-educated and highly literate talent pool

• Varied and valuable cultural and heritage resources

• Increased collaboration between tourism,

cultural, entertainment and sports sectors

• Strength of “Brand Jamaica”

• Modern copyright regime in place; Jamaica party

to relevant IP agreements/international treaties

• English-language speaking

• Strong IT base

• Close proximity to the major North American market

• The sector is now receiving greater atten-

tion, particularly through the NES

• Shortage of technical skills, particu-

larly higher up the value chain

• Inadequate intellectual property framework for protection,

valuation and management of works resulting in limitations in:

(i) monitoring and penalising for infringements

(ii) valuation and use of collateral

(iii) commercial management for optimal revenue.

• The absence of a listing of qualified professionals.

• The absence of a database of players in the sub-sec-

tors, e.g. no one is able to officially quantify how

many firms operate in the animation sub-sector.

• Absence of capacity building opportuni-

ties, particularly in script writing

• Insufficient measurement and monitor-

ing of the sector, particularly animation.

• Insufficient capacity and financial support for the sector.

• Lack of market intelligence to inform decision-makers.

• Insufficient regard and respect for the worth

and economic value the sector.

• Insufficient knowledge of, support by and benefit to

stakeholders of existing rights management systems.

• Insufficient business management capacity

• Inadequate institutional financing for

film and animation projects.

• Poor perspective of the sector from the financial services.

• Insufficient budgetary allocation for devel-

opment of the sector.

• A lack of organisation in both the film and anima-

tion sub-sectors – industry associations are either

poorly organised, defunct or non-existent.

• Insufficient incentive for retention/holding earnings in Jamaica.

• Inadequate linkages with other economic sectors.

• Fragmentation, lack of coordination and dupli-

cation of roles among agencies.

• Inordinate delay in implementing some treaties through

domestic law and reform of other relevant laws.

• Lack of incentives/systems to promote Jamaica as a favoured

destination for film-makers. Thereby lost revenue to country

and lost opportunity to develop skilled technicians

Strengths

WeaknessesThe SWOT analysis for the Film and Animation Sector is based on the first NES and stakehold-er consultations that took place in November/December 2014 and January 2015. • Growth in the economic value of global

cultural industries and markets.

• Growth of media channels and demand for content.

• Development of bilateral and international agreements for

intellectual property rights and support for creative industries.

• The opportunity that the Internet provides in terms

of reaching new markets, business opportunities

and channels for exposure, promotion, distribu-

tion and sales of film and animation products.

• Widening of the regional market through CSME

• Existence of West Indian and Jamaican Diaspora as a

market for local film and animation products (this is a small

market but could be a starting point for other segments).

• High awareness of and demand for “Brand Jamaica”.

• Increased technology making production

simpler and easily accessible by MSMEs.

• Changing preferences of consumers for

niche products – the Jamaica ‘story’.

• Growing need for visual effects is a key opportu-

nity for the animation industry in particular

• Increase in outsourcing of animation of talent and services

• Growth of e-learning applications is a major

opportunity for the animation sector

• The copying and adaptation of the Jamaican

style by non-Jamaicans that is eroding Jamai-

ca’s share in formerly indigenous areas.

• Potential loss of comparative advantage

through increased quality and use of Jamai-

can symbols and arts by other countries.

• Potential erosion of geographic indicators for Brand

Jamaica through imitation by competitors.

• Low degree of local ownership and control of creative

industries resulting in low retention of value-added.

• The negative implications of including creative

industries in the WTO trade regime

• Impact of negative activities on the image of Jamaica

• Growing threat of piracy

• A highly competitive and saturated market

• The largest and fastest growing markets are

non-English, e.g. India and China

Opportunities Threats



Section 2Film and Animation Value Chain and Strategic Planning

Film Value Chain

Animation Value Chain

11.9.1

11.9.2

Film and Animation Sector Strategy11.10

Film and Animation Vision

Film and Animation Sector Objectives

Film and Animation Sector Targets

11.10.1

11.10.2

11.10.3

The overall vision for Jamaica as articulated in the National Export Strategy 2010-2013 is as follows:

A specific vision for the film and animation sector has not been previously or formally articulated. However, for the purpose of the NES, the vision for the wider creative industries sector, which encompasses the film and animation sector, will be used in this regard.The vision for the creative industries, that is articulated in the National Export Strategy 2010-2013, is as follows:

• To improve the competitiveness of the film and animation sector.• To create higher value outputs in film and animation• To create greater market access through a sound distribution strategy

• To grow film exports by 15% for each year between 2015 and 2019• To grow animation exports by 15% for each year between 2015 and 2019 with focus on

attracting more animation outsourcing investments and developing higher value outputs• To get the film and animation sector completely formalised and organised in terms of

structure of each sub-segment, number of firms/individuals in operation in the sector, output (value and volume) generated by the sector.

Strategies and actions to achieve this objective are presented in the matrix in the proceeding section.

To make Jamaica a leading per capita export country known for its commitment to creativity, innovation and exceptional quality.

To establish “Jamaica’s Creative Industries as a major contributor to sustainable economic development; with respect for our intellectual

property from which we optimise financial benefits globally.



Film and Animation Sector Action Plan11.10.4

There are a number of issues and challenges as expressed in the SWOT analysis above as well as in the Vision 2030 Jamaica – National Development Plan as it relates to the Creative Industries. Many of these issues are addressed in the action plan below. A number of issues, however, are crosscutting in nature, e.g. export financing, market access and trade information, capacity building, standards and quality and logistics. These are therefore accounted for under the action plans for the crosscutting areas.

Ref. #

Strategies Activities TargetRespon-sibility

Time Frame

Bud-get

(US$)


B.1

1. To recognise, strengthen and further develop the film and animation sector for growth, production and increased revenues.

1. Government to identify film and animation as a key sector for economic development through its inclusion in the to-be-developed Creative Industry Policy and Masterplan.

Creative Industries

PIOJ, MIIC, JAMPRO, JEA, TBL

End 2016

40,000Policy for Cre-ative Industries developed

B.2

2. Carry out a baseline study and needs assessment on the film industry and the animation industry to measure size, struc-ture and to identify key skills gaps

Film and Animation Players

JAMPROMid 2016

60,000

Baseline study and needs assessment completed for each of the seg-ments (film and animation)

B.33. Create an inventory/database of film and animation resources along the value chain


JAMPROEnd 2015

15,000Database com-pleted and being utilised

B.4

4. Encourage, promote and incentivise the development of a mix/cluster of skills and services to support the various segments in the animation sector to ensure long-term viability, particularly as it relates to outsourcing services and revenue generation. Focus on feature films alone will not generate the required revenues to advance the sector. Also see 11c below.

Animation stakeholders

MIIC, MOE, Heart, JANN

End 2017

45,000

A mix/cluster of skills and services in animation developed

B.5

5. Enhance the current investment pro-motion initiatives in the animation and film sector.


JAMPROEnd 2018

100,000Investment promotions developed

B.66. Attract, encourage and incentivise for-eign animation outsourcing companies to set up in the designated technology park.


JAMPROEnd 2018

200,000Incentives developed

B.7

7. Develop and promote incentives for the sector such as, the removal of taxes (im-port and GCT) on computers and similar devices and all equipment in general that are needed for the sector

All JamaicansMIIC / MFAFT

End 2017

- Tax incentive developed and promoted

B.8

8. Animators and film makers to be made fully aware of and educated on the respective Co-Production Agreements already signed by GoJ.

Animators and film makers

JAMPROMid 2016

10,000

Awareness/training on co-production agreements developed and implemented

Ref. #


Time Frame

Bud-get

(US$)


B.9

9. Fully implement and optimally utilise the co-production agreements for maximum benefits to animators and film producers

Animators and Film Producers

MIIC / MFAFT

End 2017

-

Co-production agreements are fully being utilised

B.1010. Carry out a study to determine the potential, viability and relevance of the non-entertainment animation segment

Animators JAMPROMid 2016

40,000 Study carried out

B.11

2. Develop the technical skills needed to move the film and animation industry to higher levels of the value chain

11. Develop and deliver capacity building initiatives to enhance skills in key areas of need, such as script development, sound design, editing, screen writing, etc.

See specific actions below:

See below

B.11aa. Develop a mentorship programme in script writing for 5 selected persons in the film industry per year

Employees in the F&A sector

JAMPROMid 2016

68,000

- Mentorship programme developed

- At least 20 per-sons benefit from 2016 - 2019

B.11b

b. Deliver annual international workshops facilitated by top script writers, editors, etc. to allow information sharing, networking and learning in film and animation

Employees in the F&A sector

JAMPRO 2016 200,000At least 4 work-shops delivered by end of 2019

B.11c

c. Establish a mix of professional and accredited courses in high value film and animation areas. Courses to be held at the Caribbean Institute of Media and Communication (CARIMAC) and the Edna Manley College of Visual and Performing Arts (EMCVPA). Courses to be agreed on through partnership with stakeholders in the sector, based on the needs assessment carried out above.

Tertiary level Students and Schools

Ministry of Education

Sep 2017 70,000

Courses devel-oped based on the needs of the sector

B.11d

d. Identify, encourage and promote film and animation apprenticeship pro-grammes both nationally and globally to focus on key areas of need such as script writing, production, etc.

Tertiary level Students and Schools

JAMPROEarly 2016

450,000- 10 apprentices selected each year over 3 years

B.11ee. Continue the implementation of the ‘Youth Employment in Digital and Anima-tion Industries’

Youngsters aged 15 to 30 years in both urban and rural areas

MSTEM & MOE (with HEART sup-port)

2019

Fund-ed by World Bank

- 15,000 persons involved

B.11f

f. Carry out training on the Fiscal Incentive Regimes so that players in the sector can fully take advantage of an benefit from established incentives.

Producers Film and Animation

JAMPRODec 2016

20,000- training carried out

B.12

3.Strengthen the support organisations in the film and animation industry including the Film Commission, Jamai-ca Animation Nation Network, The Jamaica Film Producers Association and the National Film Association

12. Develop mechanisms to formalise the sector, such as offering incentives (such as referenced at 12, below) and benefits for registering with support organisations.


MIICMid 2016

-

- Mechanisms developed

- Greater up-take of registration or memberships of associations



Ref. #


Time Frame

Bud-get

(US$)


B.1313. Reinstate, re-organise and capacitate the National Film Association


JAMPROEnd 2015

10,000

National Film Association reinstated and operating on a regular basis

B.14

14. Assist the National Film Association to define a corporate plan/ strategic plan to develop their organisation, coordinate and serve their members. Assistance to be provided to review and strengthen JANN’s strategic plan if needed.


JAMPRO 25,000

- A strategic plan for National Film Association developed

- JANN’s plan reviewed with a view to making stronger if nec-essary

B.15

3. To develop tools to pro-mote the film and animation industry

(Refer to action plan under Market Access and Trade Information for further actions to support this strategy).

15. Carry out an analysis of the type of niches that Jamaica needs to focus on based on current market demand for both film and animation


JAMPRO / Consultant

Sep 2016 40,000

Analysis for ani-mation as well as film completed and disseminated to decision-mak-ers in the sector

B.16

16. Carry out a distribution analysis per market to determine what content should be sold to which screens and filmmakers, both regionally and internationally. (See attached detailed Scope of Works for this exercise overleaf).


JAMPRO / Consultant

March 2017

50,000

- Distribution analysis for film completed

- Distribution analysis for animation com-pleted

B.17

17. Develop samples/teasers/ trailers/shorts (10 films and 10 animation pieces) of varying genres (e.g. comedy, reality, documentary, musical, etc.) to showcase the cadre of talent that Jamaica has in film and animation design and development.


MIICMid to End 2017

600,000

20 sample films created under various genres to include film as well as animation features

B.18

18. Develop a cohesive and focused Inter-net marketing and distribution campaign to target the online Independent film markets and the Diaspora – to include social media, Pay-per-click advertising campaigns, website, search engine opti-misation (SEO).


JAMPRO / Consultant

End 2017

65,000

Campaign devel-oped and actions implemented to include website development, social media site and advertis-ing campaign, organic and paid SEO

B.1919. To educate players in the sector on crowd-funding opportunities and how it works


JAMPROJune 2017

5,000

- Education initiative im-plemented and promoted

B.20

20. Identify and participate in 3 film festivals per year as a key promotional and marketing tool to cover the main markets – (Sundance/Tribeca) USA, (Toronto Film Festival) Canada, (Cannes/Berlin Film Festival) Europe or any other festivals of relevance. Sponsor at least 1 represen-tative from each segment to represent the sector (preferably from the sector associations).

Producers in the sector

JAMPRO – Film Com-mission

Start 2017

540,000

- 1 film produc-tion / company per year spon-sored per year

-1 animation pro-duction / compa-ny sponsored per year

This is an expansion of Activity B2 above. Given the outlined constraints, the film and animation community encourages and welcomes a study to ascertain the following for both film and anima-tion projects for Jamaica :

1. SPECIFICALLY IDENTIFY THE FOLLOWING PERSONS/ORGANISA-TIONS WITH CURRENT CONTACT INFORMATION

• Sales agents• Aggregators• Distributors

NOTING THEIR NICHE AREAS TO INCLUDE: • genre• territory• percentage commission or other fees applicable

II. WHAT ARE THE DISTRIBUTION CHANNELS AVAILABLE IN VARIOUS TERRITORIES? THIS SHOULD INCLUDE:

• The Caribbean• North America• UK• Europe• Japan• South Africa

III. SPECIFICALLY IDENTIFY WITH CURRENT CONTACT INFORMATION AND DETAILS SUCH AS SIZE OF THE CINEMA OR POTENTIAL AUDI-ENCE, SCREENING FORMAT ETC FOR:

• Theatrical outlets - chain and independent• Non-traditional venues – churches, community centres etc• Cable channels – genre and general• Video on Demand – genre and general• DVD • Free to air television

Action Plan – Film and Animation Baseline and Distribution Study Project Scope

11.10.4.1



IV. IN ORDER TO DETERMINE WHAT BUDGET LEVEL FILM AND TELEVI-SION SERIES NEED TO WORK WITH, WE ALSO NEED TO KNOW

• What are distributors willing to offer as a minimum guarantee?• are there pre-sales available?

V. FILM FESTIVALS ALSO NEED TO BE IDENTIFIED AS THEY CAN BE AN ESSENTIAL PART OF THE SALES PROCESS SO FESTIVAL INFORMA-TION IS NEEDED SUCH AS:

• Dates and frequency• Location• Prestige• Genre if applicable• Submission dates • Submission cost• Submission restrictions i.e. premieres only etc.

VI. ALSO THE POTENTIAL AUDIENCE ALSO NEEDS TO BE QUANTIFIED FOR EXAMPLE:

• Jamaican audience• Caribbean audience• Caribbean diaspora in other territories

• Exact location for example Hartford, Connecticut or Brixton, UK • how many are they in each area?• what entertainment channels do they watch?• what magazines/ newspapers/radio stations do they consume?• what is the demographic – age, gender, income bracket?

VII. THE SAME INFORMATION IS NEEDED FOR THE FOLLOWING CATE-GORIES OF PERSONS AS WELL

a. Consumers of Jamaican /Caribbean musicb. Visitors to Jamaica / Caribbeanc. Consumers of “third world cinema” e.g. Brazil, Mexico

Total Budget for the Film and Animation Action plan: US $2,653,000.00

Action Plan – Film and Animation Baseline and Distribution Study Project Scope cont’d

11.10.4.1

Information Technology Enabled Services (ITES) Strategy12

Section 1ITES Sector Analysis

International trade in goods and commodities continue to dominate global trade. However, trade in services is making significant inroads and is growing rapidly. In 2000, the World Trade Organisation valued exports of commercial services at US $1.49 trillion, representing 18% of global commercial trade. By 2013 trade in commercial services grew to US $4.64 trillion, representing a compounded average annual growth rate of 9.1% between 2000 and 2013. In the period 2000-2013, merchandise exports aver-aged growth of 8.6% per annum. Services today represent approximately two thirds of the GDP of the developed countries and almost half the GDP

of the developing world. The sector accounts for 70% of jobs in developed countries, but only a third of jobs in emerging economies. The services sector also employs a large percentage of women, positively contributing to the empowerment of women and poverty alleviation. According to the United Nations Department of Economic and Social Affairs, the service sector in Latin America and the Caribbean is made up of 80% women. This compares to 56% in Asia (excluding China) and 46% in Africa.

Importance of the Services Sector12.1



Figure 18Export of Commercial Services from Jamaica (USD Billions)

Commercial trade in services (excluding Govern-ment related services) from Jamaica has been growing at a lower rate than the global average. While global trade in commercial services grew at a compounded average annual rate of 9.1% between 2000 and 2013, exports of commercial services from Jamaica grew at a compounded aver-

age annual rate of 2.1%. Furthermore, recovery has been slow since the decline in service exports in 2008/2009 because of the Global Economic Recession. To date the sector has not been able to reach output levels prior to the recession. See Figure 18 below.

Emerging economies have expanded their service exports at a rate exceeding that of developed countries. Services are essential inputs for many activities and play a crucial role in increasing economic growth and productivity by improving financial intermediation, infrastructure, and the use of information and communication technologies (ICTs), education and health.

A notable global trend is that the world econ-omy is increasingly knowledge-based. In terms of economic activity, the world’s major economies have already moved from being dominated by the primary and secondary sectors to tertiary services, with these now accounting for between 60-70% of the GDP of developed nations. Jamaica is on a similar trajectory. The dawn of the 21st century has coincided with a move from process-oriented services such as transport and travel or wholesale and retail trade to knowledge-based services.

Jamaica Services Sector Exports

Importance of the Services Sector cont’d

12.2

Source: Nash Information Services, 2015

The world economy is in the heart of the fourth economic wave - the information technology wave. It is important that labour-intensive and knowledge-driven sectors view themselves as leaders in this fourth wave. The first three “long waves” of development (1. early mechanisation, 2. steam power and railway, 3. electrical and heavy mechanisation) bypassed much of the developing world. Jamaica, with its state-of-the-art technolog-ical platforms, e.g. fibre optic cables and a strong telecommunications sector, has the opportunity to ‘ride’ this fourth wave and services will play a key role as it is very IT dependent.

Information Technology is a key driver of growth of the services sector. IT facilitates innovation and supports productivity, which are both critical for the services sector. Since the beginning of the 1990s productivity growth in European countries decreased whereas it increased in the US, accord-

ing to McKinsey Global Institute. One important reason for this development is that the US has been better in reaping the benefits of using IT to increase productivity compared to Europe. The contribution of ICT capital per hour worked to productivity is 0.8 percentage points in the US, compared to 0.5 in the EU.

IT has also been a significant facilitator of trade in services across borders. With the dawn of the Internet and telecommunication in general, busi-nesses are now able to use IT as a key distribution and communication tool for the marketing, sale, delivery and eventual consumption of commer-cial services. The introduction of new technolo-gies such as cloud computing, Big Data analytics and mobile technology, to name a few, are creating significant opportunities for the services sector.

The services sector has been identified as a prior-ity sector by the Government of Jamaica (GoJ). The GoJ already developed a Services Sector Strategy and Expansion Plan in 2013 that was funded by the United Kingdom’s Department for International Development (DfID). In addi-tion, the Caribbean Development Bank is funding the development of a ‘Gender Responsive and Results-Based Services Sector Policy, Strategy and

Action Plan that has been carded for launch in early 2015.

In the context of the National Export Strategy 2015-2019, the GoJ has identified two priority sectors for development within the overall services sector. These are – Information Technology Enable Services (ITES) and Film and Animation.

Information Technology Drives Services

Target Services Sectors of NES 2015-2019

12.3

12.4



The Information Technology Enable Services (ITES), also called web enabled services or remote services or Tele-working, covers the entire gamut of operations that exploit Information Technology for improving efficiency of an organisation. ITES are those services that have been transformed by information and communications technology, enabling them to be digitised, codified, and frag-mented and therefore able to be undertaken at any distance from the core business and final customer. It is for this reason that ITES is mostly referred to as outsourcing. Two of the key components of outsourcing are Business Process Outsourcing and Knowledge Process Outsourcing services.

ITES has evolved from its pure play call centre roots in the 1990s. Once used as a remote tactic for businesses to generate immediate cost-sav-ings, modern day outsourcing is now a critical strategic tool for businesses both large and small. Outsourcing providers have expanded their busi-ness models to incorporate shared services, global delivery and Cloud-based technologies. The unilat-eral arrangements of the past have been replaced with models that incorporate hybrid work-flows that may include offshore, near-shore and on-shore combinations. Ultimately, today’s clients consider outsourcing provides strategic “collabo-rators” that augment the capacity levels of their existing in-house teams.

The IT Enabled Services Sector12.5

Figure 19 - Global Outsourcing Economic Activity, 2000-2015 (USD Billions)

The global outsourcing industry has been steadily growing. From a base of US $184 billion in 2000, the global outsourcing industry is poised to reach US $443 billion in 2015, an average annual growth rate of 5.9%. The BPO sub-sector of the global

outsourcing sector is growing at an average annual rate of 6.3%, slightly faster than the overall indus-try. Global BPO is expected to generate US $162 billion in economic activity in 2015, according to Gartner, Inc.

Key Global Trends and Implications for the ITES Sector

12.6

Source: Gartner, Inc., 2015* 2015 is a forecast

There are a number of global trends that are creat-ing new opportunities that Jamaica needs to moni-tor. On the heels of the recent Global Economic Recession (2008-2010), the worldwide economy has experienced a volatility and uncertainty that have created challenges for many sectors. Even

as the global economy recovers, companies face long-term shifts. The rapid and radical transfor-mations taking place in the ITES sector are largely driven by the consumer and significantly facilitated by technology. A summary of these key shifts or trends are presented in the sections that follow:

Key Global Trends and Implications for the ITES Sector cont’d

A by-product of rising wealth and productivity in developing economies is rising wages. From 2006 to 2013, real wages in the group of advanced economies grew at about 0.3 to 0.9 per cent per year, according to the International Labour Organ-isation Global Wage Database, 2015. For the same period, real wages in emerging economies grew by 5.9 to 9.2 per cent annually. In Latin America, real wage growth ranged between at 0.2 to 4 per cent annually from 2006 to 2013. Rising wages remain a mark of success for developing nations, the result of economic development and rising prosperity.

Today, this presents opportunities for “next frontier” developing economies to capture any labour-intensive work that leaves countries with

rapidly rising wages such as India and the Philip-pines. Countries such as Bangladesh, Cambodia, Indonesia, Vietnam, and other developing econo-mies are already experiencing growth in labour-in-tensive industries because of their cost advantages. While Jamaica still remains on the higher end compared to main players such as India and the Philippines, Jamaica can still take advantage of this trend by strategically positioning itself as a higher quality ‘product’ rather than competing merely on cost alone. Jamaica’s labour cost is still consider-ably lower than key markets such as USA and the UK, which still bodes well for the country from a cost perspective.

Consumers today, are more knowledgeable, demanding, educated and sophisticated than ever before. With rising income levels and a grow-ing middle class in many economies consumers’ preferences are becoming more discerning. Their tech-savvy characteristics married with radical and rapid advancement and diffusion of technology significantly shifts greater power to the consum-ers’ advantage. There is not just one form of tech-nological change that is taking place. Technology has had impacts in many areas – devices (mobile phones, tablets, etc.), channels (Internet, social

media, etc.). Today’s tech-savvy customers show an increased preference for multiple communica-tion channels on multiple devices with an appetite for always-on, personalised service. Consequently, traditional channels fall short of modern custom-ers’ nuanced expectations. A majority of organi-sations are now leaning towards a multi-chan-nel customer relationship management (CRM) strategy. Leading solution providers are creating, implementing and optimizing these strategies for a consistent, quality customer experience.

Rising Wages in Competitor Markets

Customers are Becoming More Demanding and Tech-Savvy

12.6.1

12.6.2



A recent study by LinchpinSEO found that custom-ers like to engage with their banks on social media on Sundays, a day when brick-and-mortar financial services are typically closed. Customer relation-ship managers will have to break away from the “closed for business” mind-set and post in social

media networks every day of the week, every time of day, even on Sundays. Competitive BPOs will leverage global centres and customer-contact representatives with multiple language skills to deliver 24/7/365 customer service via Facebook, Twitter and other channels.

Big Data is arguably the biggest opportunity, in a generation. The Internet has changed the way businesses operate tremendously. How consumers look, buy, pay for and even consume services, have changed dramatically. With that change has come entire new ways of tracking and measuring consumers’ intent, behaviour, thought patterns, sensitivities, sensibilities, desires, fanta-sies and needs. This means that, more than ever before, suppliers are better able to understand the behavioural patterns of their customers and competitors. In addition, these data are easier than ever to produce, capture, collect, analyse, integrate and use.

With regards to ITES, the frequent, always-on nature of customer contact on multiple commu-nication channels can generate a vast amount of data. Rapidly developing contact centre analytics can be used to derive actionable insights from this data – a move that holds immense potential for the sector. Leading solution providers will employ a 360° approach to Big Data analytics, and even-tually predictive analytics, to provide organisations with deep customer insights that can help them improve products and processes virtually in real-time. This could significantly alter the outsourcing industry to one that is significantly more data-driven.

Automated systems, such as forms classification and data capture, have been around for years, but these new platforms purport to be the second-generation of business process automa-tion, namely, robotic process automation (RPA), “software robots” that integrate with legacy busi-ness process systems to handle mundane, repeti-tive, rules-based tasks. These ‘robots’ are designed to free IT and business process staff from dull, low-skill, repetitive tasks. These software robots operate at a fraction of the cost of a human being and can work 24 hours a day, year-round, without any breaks. This technology is poised to conse-

quently completely transform the ITES sector, particularly BPOs and KPOs. For instance, there will no longer be a need to go offshore if many of these processes can be handled onshore and in-house by advanced software robotics. However, this robotic automation and autonomics is expected to take root in the medium to long-term, giving the sector sufficient time to get up to speed. A lack of industry standards and the novelty of this trend means that companies will take their time adopting these technologies, according to analyst firm Ovum.

Outsourcing goes Social

Big Data is a Big Trend for ITES

Robot Technology is poised to Dominate the Sector

12.6.3

12.6.4

12.6.5

Several factors continue to work together to shift outsourcing activity back to or near to the home markets such as, the US. Some of these factors include: rising wages in emerging markets such as India and China; consumers demanding contact-centre service from agents who speak American-accented English and Latin American Spanish; and companies preferring to work with outsourcers who are geographically close and within familiar time zones.

Fourteen per cent of electronics companies indi-cated they were planning to bring operations back or start new operations in North America through 2014, according to IPC (a research company in the manufacturing sector). Also, an AlixPartners study

reports the US has reached parity with Mexico in terms of attractiveness as a ‘nearshore’ manufac-turing destination and is on track to achieve cost parity with China by 2015. Given this environ-ment, and if robotic process automation systems take root in BPO and KPO, there will be no need to have a human being halfway across the globe handling mundane processes – they will be done by a computer in the U.S., freeing up funds for use in other areas such as in innovative, high-skill pursuits.

Another possible trend that onshoring / nearshor-ing could lead to, is a balanced-shore approach, a hybrid combining offshore, nearshore and onshore activities.

Cloud computing is gaining ground and has key implications for the ITES sector. In 2013 Google joined Amazon, Microsoft and IBM as a major provider of cloud computing services for the corporate market. Google made significant inroads in cloud computing by indicating that it was cutting prices for processing and storage, while guaran-teeing uptime of 99.5 per cent, making it more cost effective for businesses. The addition of a new competitor in the public cloud means more available infrastructure and lower costs for ITES service providers looking to provide solutions beyond offshore labour arbitrage models. These companies foresee a future of automated business process as a service (BPaaS) applications over the

web, shared by multiple clients and paid for on a consumption or subscription basis.

Cloud-facilitated alternate delivery models are enabling organisations to develop a vendor eco-system where individual solution providers are chosen for specific services. Consequently, ITES service providers will endeavour to build differen-tiated, standalone services alongside comprehen-sive service offerings. In addition to facilitating busi-ness from organisations favouring a multi-sourcing strategy, this will also allow ITES service providers to market these cost-effective service offerings to SMEs and start-ups, representing a significant area of opportunity.

‘Onshoring’ and ‘Nearshoring’ will Grow in Importance

Cloud Computing is Gaining Significance

12.6.6

12.6.7



A recent study by LinchpinSEO found that custom-ers like to engage with their banks on social media on Sundays, a day when brick-and-mortar financial services are typically closed. Customer relation-ship managers will have to break away from the “closed for business” mind-set and post in social

media networks every day of the week, every time of day, even on Sundays. Competitive BPOs will leverage global centres and customer-contact representatives with multiple language skills to deliver 24/7/365 customer service via Facebook, Twitter and other channels.

Data Breaches leads to Greater Need for Security12.6.8

Jamaica’s trade in ITES services is strengthened but simultaneously limited by two key factors – proximity and language. The geographic proximity to the US and Canada and the cultural proximity to these two markets and to the UK because of its history (Jamaica is a former colony of the UK and has a long history of trade with the UK); and the existence of a thriving Diaspora in the UK, USA and Canada, makes access to these markets relatively easier for Jamaica compared to other competitors. In addition, Jamaica’s official language is English, which is also the official languages of the USA, Canada and the UK. However, the lack of geographic and cultural proximity to Europe compounded by the language barrier makes the EU a difficult market to penetrate. This also holds true for Latin American and Asian markets. There-fore, based on these strengths and limitations the natural markets for ITES services from Jamaica will continue to remain the USA and the UK. Greater focus could be placed on the Canadian market.

(See Table 9 below). There are however, oppor-tunities to be had from non-English speaking markets as many of these markets offer products and services to English-speaking customers and will need English-speaking business and knowledge processing outsourcing services from time to time.

In addition to call centre services the areas of growth generally emanate from the Finance & Accounting and Legal segments and therefore presents an opportunity for Jamaica. However, there are restrictions in terms of different account-ing and legal practices in the main markets of USA and Canada. There are however, international standards such as the International Accounting Standards that assist in this regard. The similarity of the UK legal and financial systems bode well for the growth of these segments in the UK market. The same holds true for some commonwealth and CARICOM markets.


MarketMarket

SizeITES

Market Demand

Economic Output


Language Proximity

Cultural Proximity

USA High High High High High HighCanada High High High High High High

UK High High High High High HighAsia-Pacific (Japan,

Australia, New Zealand)High High High Low Low Low

Europe (Germany, France, Spain, Italy)

High High High Low Low Low

English-speaking Caribbean(Trinidad & Tobago, Barbados,

Guyana)

Low-Me-dium

Low Low High High High

Jamaica has been making great strides in the BPO sub-sector. Growth trends in higher value services such as IT and knowledge process outsourcing are also increasing. This presents a real opportunity for Jamaica to offer ITES services higher up the value chain and increase revenue-earning poten-tial. The following three sub-sectors are recom-mended starting first at the higher end of the value chain.

• Knowledge Process Outsourcing• Legal processing• Professional services• Software development• Big Data analytics (long-term)

• Information Technology Outsourcing• Network administration• Internet support services• Tech support services

• Business Process Outsourcing • Finance and accounting• Human Resource and payroll services• Insurance processing• Health customer care• Call Centre Services• Customer Support Services

In order to pursue a number of these sub-sectors Jamaica will need to ensure security of third party data, through updating of relevant laws eg Cyber laws to protect ITES- BPO investors from viruses/hackers, particular relevance to protection of private data. But also, strong and stable commercial contract law is important and needs to be under-stood by the parties involved in these contracts – particularly thinking about Non Equity Modes (NEMs) in this regard. Promotion and facilitation of NEMs requires a strong enabling legal and insti-tutional framework, as well as the involvement of investment promotion agencies such as JAMPRO, in attracting transnational partners and investors. In addition, it is necessary to focus on building the capacity of businesses in the ITES sector to access global value chains and negotiate NEM contracts.

Priority Sub-sectors12.7.1



Jamaica’s trade in ITES services is strengthened but simultaneously limited by two key factors – proximity and language. The geographic proximity to the US and Canada and the cultural proximity to these two markets and to the UK because of its history (Jamaica is a former colony of the UK and has a long history of trade with the UK); and the existence of a thriving Diaspora in the UK, USA and Canada, makes access to these markets relatively easier for Jamaica compared to other competitors. In addition, Jamaica’s official language is English, which is also the official languages of the USA, Canada and the UK. However, the lack of geographic and cultural proximity to Europe compounded by the language barrier makes the EU a difficult market to penetrate. This also holds true for Latin American and Asian markets. There-

fore, based on these strengths and limitations the natural markets for ITES services from Jamaica will continue to remain the USA and the UK. Greater focus could be placed on the Canadian market. (See Table 9 below). There are however, oppor-tunities to be had from non-English speaking markets as many of these markets offer products and services to English-speaking customers and will need English-speaking business and knowledge processing outsourcing services from time to time.

In addition to call centre services the areas of growth generally emanate from the Finance & Accounting and Legal segments and therefore presents an opportunity for Jamaica. However, there are restrictions in terms of different account-ing and legal practices in the main markets of USA


Table 10ITES Market Assessment – Priority Markets by Sub-Sector


* Although the prospects are reasonable, specialised training would be required to target these markets in this area.

Market

Business Process Outsourcing

IT Outsourcing

Knowledge Process Outsourcing

Finance & Accounting

Customer / Call Centre

Support

Internet / Tech

Support

Professional Services

Legal Outsourcing

Software Development

USA Medium-High* High High High Low-Medium* High

Canada High High High High High High

UK High High High High High High

Japan Low Low High High Low High

Australia, New Zea-land

MediumMedi-

um-High Medium Medium-High Low Medium-High

Europe (Germany, France, Spain, Italy)

Low Low Medium Medium Low Medium-High

English-speaking Caribbean

(Trinidad & Tobago, Barbados, Guyana)

Low-Medium Medium Low Medium Medium Medium

The ITES sector is influenced by four key compet-itive characteristics (the four Ps of ITES compet-itiveness) – proximity, people, price and product. Proximity can be broken down into three areas – geography (physical distance to the market), culture (similar history or culture) and language (the language of the market). People relates to the talent and capabilities of the population/work force. Price refers to the cost of labour and the cost of conducting business such as real estate and energy costs. And product refers to the quality of IT and other infrastructure and the general ease of doing business.

In order to determine Jamaica’s competitiveness in the context of the outsourcing sector, it is

necessary to make comparisons with key global competitors such as India and the Philippines. This will also assist in determining the key strategies and actions to grow the sector. The four Ps will be used for this purpose.

Measured by proximity, quality people, price and product, Jamaica’s competitiveness relative to its main competitors, is notably high. However, Jamaica does not stand up well to its competitors only in the area of price. See Table 11 below. This gap may be closing as trends indicate that many emerging markets such as India are experiencing rapid growth in wages. This bodes well for Jamaica.

and Canada. There are however, international standards such as the International Accounting Standards that assist in this regard. The similarity of the UK legal and financial systems bode well for

the growth of these segments in the UK market. The same holds true for some commonwealth and CARICOM markets.

How Can Jamaica Compete?12.8.1

Key CharacteristicOverall Rating compared to

Competitors

1. Proximity High

2. People High

3. Price Medium

4. Product High

Table 2 - Overall Competitive Rating of Jamaica in the ITES Sector

Source: Tourism Intelligence International research, 2015



Jamaica fares well on all aspects of proximity compared to its main global rivals. With the trend in near-shoring, Jamaica’s geographic proximity to the USA and Canada compared to its competi-tors bodes well for the ITES sector. , With nearly 1 million Jamaicans living abroad and many more travelling to and from the US creates strong ties with this key market. In addition, compared to its competitors, Jamaica’s English may be consid-

ered preferred, as English is the official language of Jamaica, whereas English is a secondary language in India and the Philippines. Jamaica’s English is also the closest to the US English compared to its competitors. However, there is the challenge of many Jamaicans speaking ‘Jamaican Creole’ which points to the issue of training in Standard English for the Jamaican work force, which is currently being successfully met to date.

Carving a niche in the services globalisation indus-try is highly dependent on the required supply of talented labour equipped with skills and rele-vant industry knowledge to deliver outsourced services. In addition to this, a steady and stable output of capable talent from the academia serves to continuously augment the existing labour force and supply outsourcing services demand in a loca-tion.

Jamaica is an island of around 2.7 million people, joining the profiles of Uruguay and Puerto Rico in terms of population. The country’s labour force numbers around 1.3 million or around 45% of the population. Jamaica shares its place with near

shore countries like Costa Rica and Panama in having a small-scale labour force in the region. It is important to note that the country’s labour pool has evolved into a services-centric sector.

Compared to its global competitors in the ITES industry, Jamaica scores well in terms of the quality of its workforce. Using education and literacy as a measure of the quality of the workforce, we see that Jamaica scores higher than both India and the Philippines in terms of secondary and tertiary level education enrolment. It scores higher than India but lower than the Philippines in terms of literacy rate. Generally, Jamaica is competitive in terms of its human resource and people characteristics.

Proximity

People

12.8.1.1

12.8.1.2

Table 12- Competitive Proximity of Jamaica to Key Global ITES Competitors

CompetitorGeographic

Proximity (USA)Cultural

ProximityLanguage Proximity

JamaicaHigh

(2,530 km from New York)

High(965,355 Jamaicans live in USA / 35.5% of Jamaican population)*

High(English is main language)

IndiaLow


High(2.6 million Indians live in USA 0.2%

of Indian population)**

Medium(English is secondary language)

PhilippinesLow


High(2.8 million Filipinos live in USA 2.6% of Filipino population)**

Medium(English is secondary language)

Source: Tourism Intelligence International, 2015* US Census Bureau, 2010** Migration Policy Institute, 2014

Jamaica cannot compete in terms of labour cost. Jamaica’s salary levels are double that of India and Philippines. However, the cost of social security contributions is lower than competitors – 2.5% compared to 12% for India and 7.5% for the Phil-ippines. See Table 14 below. In addition, Jamaica’s energy cost is quite high compared to India but comparable to the Philippines. Where Jamaica fares well is in terms of the cost of rent, which is considerably lower than its competitors (nearly four times lower).

In terms of salary levels, this cost comparison is provided to remind local stakeholders that compe-

tition for the same target markets will come from all sections of the global ITES industry. Likewise, comparisons with these larger delivery destina-tions can also be useful to Jamaica by providing a benchmark of local costs with respect to mature services outsourcing locations. Compared to the lead countries, Jamaica has particular advantages in office rental costs and social security contributions. India‘s rental costs are four times higher, while the Philippines‘ are thrice higher than those of Jamaica. Jamaica can leverage on these two aspects in marketing its cost competitiveness compared to these two established locations, according to the Tholons Study on the Outsourcing Market.

Price12.8.1.3

Table 13 - Level of Education and Literacy in Selected ITES Competitor Countries

Table 14 - Cost of Doing Business in Selected Countries offering ITES Services

CompetitorSecondary Education

Enrollment Rate

Tertiary Education Enrollment Rate

Literacy Rate **

Jamaica88.6

(rank 74th)30.8

(rank 79th)87.9

India68.5

(rank 106th)24.8

(rank 87th)74.4

Philippines84.6

(rank 89th)28.3

(rank 82nd)95.4

CountryEntry Level BPO

Salary (US$/month)

Entry Level ITO Salary (US$/month)

Electricity (US$/kWh)

Rent (CBD Class A, US$/

Sq.ft./yr.)

Electricity (US$/kWh)

Jamaica 600-700 1,000-1,100 0.32 6-7 2.50%

India 280-320 320-390 0.06 25-28 12%

Philippines 235-430 310-679 0.3 20-22 7%

Source: * Global Competitiveness Report, 2014** United Nations Human Development Report, 2013

Source: Jamaica Carving a Niche in the Global Outsourcing Market, Tholons, 2012



In services outsourcing, a necessary component complementary to a competitive labour pool is the physical infrastructure of the country. While available talent provides the medium for delivery of the outsourced process, a strong infrastructure base serves as the critical medium in delivering the output of the finished service.

A strong outsourcing infrastructure base corre-sponds to the availability of technological facilities such as continuous and reliable Internet connec-tions and leased lines service providers across service delivery locations. Also, a functioning and well-maintained transport system would serve as an effective funnelling means for talent to move across locations – allowing for scale and better utilisation of talent across the entirety of the island

country. Aside from this, a strong infrastructure base also conveys the availability of dedicated locations that can support outsourcing activities, like SEZs and technological parks.

Compared to its top global competitors, India and the Philippines, Jamaica’s performance in terms of infrastructure and technology is superior. In terms of the quality of overall infrastructure and roads Jamaica performed better than both India and the Philippines but was comparable in terms of the quality of electricity supply. Jamaica is far superior too when it comes to the availability of the latest technology, outranking 101 countries in this area, including India and the Philippines. See Table 15 below.

Product12.8.1.4

Table 15 - Quality of Infrastructure in Selected ITES Competitor Countries

CompetitorQuality of Overall

InfrastructureQuality of

RoadsQuality of

Electricity SupplyAvailability of Latest

TechnologiesJamaica 4.2 (rank 70th) 3.7 (rank 84th) 4.4 (rank 83rd) 5.4 (rank 43rd)

India 3.7 (rank 90th) 3.8 (rank 76th) 3.4 (rank 103) 4.1 (rank 110th)

Philippines 3.7 (rank 95th) 3.6 (rank 87th) 4.2 (rank 87th) 5.1 (rank 58th)

Source: Global Economic Forum Global Competitiveness Report, 2014

The ITES Sector in Jamaica began as early as 1960s, when companies such as IBM, Burroughs, and ICL established offices in the Free Trade Zones (FTZ) in the country. By 2001 there was renewed inter-est in the ITES capabilities of the country, driven largely by the GoJ’s focus on improving the coun-try’s IT infrastructure and in growing the services sector.

The country’s deregulation and liberalisation of the ICT sector offered increased connectivity across locations within the country. In addition, the growth from the liberalisation of the Telecommu-nications sector as well as increased investments in the country’s FTZs attracted more international companies and service providers to invest in the country and set up offices.

The ITES sector employs an estimated 14,000 agents and generates over US $230 million in reve-nues, according to JAMPRO, 2014. At least 75% of the sector is focused on voice-driven services. In

addition to call centre services the areas of growth generally emanate from the Finance & Accounting and Legal segments.

The ITES sector in Jamaica comprises over 30 companies performing a range of services, accord-ing to JAMPRO, 2014. These companies range in capabilities and offer the following services:• Finance & Accounting• Receivables & Debt Collection• Inbound Customer Service• Tele-sales/marketing• Tech support• Graphics

The ITES sector is concentrated around three main areas in Jamaica. Over two-thirds of businesses are located in Montego Bay and the remaining almost equally divided between Portmore and the country’s capital, Kingston. See Figure 20 below.

ITES Sector in Jamaica12.9

Figure 20 - Geographic Distribution of ITES Companies in Jamaica, 2014

Source: JAMPRO, 2014



ITES SWOT Analysis12.10

• Highly skilled, English-speaking workforce.

• Relatively stable and competitive ICT infrastructure.

• Competitively priced workforce

• Dedicated workforce aiming at making

a long-term career in the field.

• Geographic proximity to the main ITES market – USA

• Cultural affinity to the US and UK markets

• Same time zone as the US market

• Adaptability of workforce (can easily imitate

US accents – based on anecdotal evidence)

• Lower response time with effi-

cient and effective service.

• Operational excellence

• A strong female presence within the workforce

• Three areas have been earmarked

as clusters for BPO space:

• Naggo Head Tech Park – Portmore

• Caymanas ICT Park – Caymanas

Economic Free Zone

• Barnett Tech park – Montego Bay

• Focused facilitation of Investors

• Established institutions for talent development

• Availability of skilled and trainable workforce

• Exporters are too USA-focused

• Uncoordinated marketing efforts among exporters

• Limited networking between firms

• Lagging behind in some of the ICT

trends, e.g. Big Data and Robotics

• Limited coordination among policy and services

entities that support or guide the sector

• Limited knowledge of external consum-

ers and market trends.

• Some companies lack the aggressiveness to

go after new market opportunities.

• Lack of information on the sector – no needs

assessment carried out recently for the sector.

• Limited availability of credit and financing

• High of costs of some inputs – e.g. energy and labour.

• High employee attrition rate – 33% accord-

ing to Heart Trust/NTA, 2014

• The cost of telecom and network infrastructure is

relatively high in Jamaica (imported inflation).

• Need for improved local infrastructure on all fronts

• Lack of certification of staff

• High cost of entry for new starters/investors and/

or existing providers wishing to expand, particu-

larly square footage cost of site development.

Strengths

Opportunities

Weaknesses

Threats• A stable global sector

• Growing trend towards outsourcing

• Rising wages in competitor markets

• Customers are becoming more tech-savvy

• Opportunities in Big Data and Robotics devel-

opment to put Jamaica on the leading edge

• The growing nearshoring trend

• The growing significance of cloud computing

• Opportunities to tap into the SME markets

(large volume of smaller players)

• Outsourcing of higher value services such as KPO

• Strong government support to grow the industry

• New product/process develop-

ment in competing countries.

• The threat that robotics technology can

replace people in some areas

• Many companies are bringing back certain aspects

of business process outsourcing to home base

• Continued increase in labour costs without

corresponding productivity improvements.

• Constraints in the macroeconomic and business envi-

ronment, particularly complex regulatory processes.

• High crime and security issues.

• Risk of data breaches and hacking

• Strong competition from India, Paki-

stan and Philippines as well as others.

• Growing regional competition

• Inability to show higher value in product differ-

entiation with regional competitors such as the

Dominica Republic, Trinidad and Tobago, etc.

Section 2ITES Value Chain and Strategic Planning

ITES Value Chain12.11

ITES Strategy and Action Plan12.12

To date, no official vision has been developed specifically for the ITES sector. The proposed vision presented below was adapted from the overall vision for the ICT sector of which ITES forms a part. The ITES vision is proposed as follows:

The linchpin of this vision is competitiveness and economic and social contribution.

ITES Sector Vision12.12.1

A globally competitive ITES sector that is widely accessible and makes the greatest possible contribution to the social and economic development of Jamaica



Based on consultation with stakeholders and feedback at the Validation Workshop the overall objec-tive for the ITES sector was identified as follows:

1. ITES to grow by 15% per annum with focus on the higher value added areas such as KPOs2. ITES to add 18,000 new jobs by the end of 2019

ITES Sector Objectives

ITES Sector Targets

12.12.2

12.12.3

To make Jamaica a globally recognised supplier of high value ITES services by 2019.

ITES Action Plan12.12.4There are a number of issues and challenges as expressed in the SWOT analysis above. Many of these issues are addressed in the action plan below. A number of issues, however, are crosscutting in nature and accounted for under the action plans for the crosscutting areas. Some areas include export financing, standards and quality, capacity building, market access and trade information and logistics.

Ref. #


Time Frame

Bud-get

(US$)


C.1

1 Nurture a culture of inno-vation and human capital development to support the competitiveness and growth of high value ITES services

1. Develop and support existing ITES related programmes and develop a mechanism to identify which programmes are necessary and what they should focus on. It is important to have market driven programmes.

To take on the form of seminars and workshops. Three workshops per annum.

- Students from fourth and fifth forms as well as Vocational Training Insti-tutions

- Industry employees

Ministry of Education, Heart Institute

2017 170,000

- 9 workshops delivered in 3 years- At least 1,000 students partic-ipate between 2017 and 2019- At least 2,000 industry em-ployees between 2017 and 2019

C.2

2. Develop a National policy to establish Spanish as a second language to support trade with Latin America. Possibly a bilateral agreement for foreign language training in relevant countries such as Venezuela, Columbia, Cuba. The language barrier is a major impediment to trade, particularly for the ITES sector.

- Vocational Training Insti-tutions

- Industry employees

Ministry of Education, MFAFT

Sep 2018

80,000

- Policy de-veloped and implemented throughout the education system

C.3

3. Develop scholarship program for training in knowledge process outsourcing based on services for which there is a high international demand, e.g. Big Data analytics, machine learning applications, software development. There are 1-year programmes in these areas.

A-level and University graduates


Apr. 2016

232,000- Two scholar-ships delivered each year

C.4

4. HEART and other universities to expand curriculum to offer additional interna-tionally accredited courses that will give potential investors the comfort and con-sistency in their recruitment strategy.

Students / employees in the sector

Ministry of Education (HEART

End 2017

100,000

- Internation-ally accredited courses added to curriculum

C.5

5. Provide training programmes for high-level KPO, ITO and BPO skills at a technical and management level. E.g. finance and accounting, legal outsourc-ing, software development and Big Data Analytics.

Students / employees in the sector


Early 2017

100,000

- Training programmes identified and developed

Ref. #


Time Frame

Bud-get

(US$)


C.6

6. Promote the development of finishing schools to supply high-quality graduates in specialised outsourcing areas. This would be akin to the Workforce Colleges concepts being implemented by HEART across the island. In addition, HEART and finishing schools should be allowed to fully utilise the apprenticeship method to provide hands-on training in GoJ as well as private sector outsourcing and call centre operations.

Students, col-lege graduates, employees

Ministry of Education(Including HEART)

Mid 2016

35,000Finishing school promoted and incentivised

C.77. Develop local capacity to provide train-ing in use of software and technologies required by BPOs, ITOs and KPOs

Government tertiary level institutions(17 registered by MOE and 6 HEART)


Sep 2016 150,000

10 tertiary level institutions to adopt relevant IT programme by 2018-19

C.8

8. Encourage and support the develop-ment of education in high-end technol-ogy for application by sector (Big Data Analytics, machine learning/robotics)

Universities and some colleges


Sep 2016 -

UWI, UTECH and CIC carrying high-end IT programmes of relevance to ITES

C.99. Develop local capacity to deliver en-abling products (e.g. software) in order to supply required input to ITES industry

Universities and some colleges


Sep 2016 -

UWI, UTECH and CIC carrying high-end IT programmes of relevance to ITES

C.102. Create an enabling environ-ment for growth in the ITES sector

10. Review and revamp ITES related regulations and policies and sensitise the sector to the implications of these policies and regulations once they are established.:

-The Cyber Crimes Act (now being reviewed)- Proceeds of Crime Act- Commercial contract law as it relates to Non Equity Modes that affect services out-sourcing relationships with transnational corporations- Data Protection law (see http://tinyurl.com/Vision-2030-ICT for ICT sector plan)- Taxation laws – amended to reflect: the need for Tax credits e.g. in relation to marketing expenses incurred by industry players as they seek to promote services; provision of tax breaks- Intellectual Property Protection laws

IT and ITES sector

Ministry of Justice, PIOJ, Con-sultancy

mid 2017

80,000

All relevant regulations and policies reviewed and recommen-dations made by mid 2017

Sensitisation on policies to be determined

C.11

11. The continuation of benefits from the Export Freezone Act to the Special Eco-nomic Zone Act is integral to the mainte-nance of the current levels of outsourcing in Jamaica. Careful consideration must be given in the policy on grandfathering of freezone benefits and the transition of single-entity freezones. This will help to ensure that the ITES sector is seamlessly integrated into the wider Logistics Hub Initiative, aspects of which are pegged on telecommunications infrastructure.

IT and ITES sector

MIICEnd 2017

-Benefits from the SEZ Act actualised

C.12

12. Draft best practice policies and reg-ulations reflective of those in high end supplier markets (e.g. Singapore) suited to Jamaican needs/conditions (including legislation that addresses data protection and security breaches)

IT and ITES sector

Ministry of Justice

mid 2016 – mid 2017

40,000

All relevant regulations and policies updated to international best practice by mid-2017

C.1313. Provide readily available sources of ITES industry information and trends. One stop point of reference.

ITES sector JAMPROEnd 2015

-At 2 market re-ports published / updated annually



Ref. #


Time Frame

Bud-get

(US$)


C.1414. Develop quality infrastructure through licensing and certification programs for ITES providers

IT and ITES sector

Ministry of Science, Technolo-gy, Energy and Mining / Ministry of Industry Investment and Com-merce

End 2016

150,000

- Licensing and certification programmes in place by end of 2016- All relevant agencies such as bureau of standards are trained and systems in place to implement

C.153. Incentivise establishment of ITES suppliers in Jamaica

15. Inclusion of outsourcing activities un-der the Income Tax Relief (ITR) Act (2013) as large projects (based on job count) or as pioneering industries (particularly for KPO and ITO) to incentivise investments.

ITES sector MIICEnd 2017

-

- Outsourcing activities includ-ed as part of the ITR Act

C.16

16. Nudge Small and medium enterprise operators to enter the Knowledge process Outsourcing market through the creation of:

i. Incubator facilities that provide support services

ii. Provision of research driven information on markets

iii. Stage biennial expo for ITES sector

MSMEs in the ITES sector

“

“

MIIC

JAMPRO

MIIC/JAM-PRO with support from Private Sector

2016

“

“

200,000

-

150,000

At least 25 MS-MEs targeted and assisted

At 2 market re-ports published / updated annually

1 expo every 24 months targeting all players in the sector

C.17

17. Research opportunities and create a network of local and overseas investors in ITES e.g. BPO, Knowledge process outsourcing (KPO)

ITES sector JAMPRO 2016 -

Set up a simple database to collate the infor-mation

C.1818. Increase exposure of industry players through participation in conferences, membership in umbrella organisations

ITES sector JAMPRO 2016 75,000

Membership in national and international associations doubled by 2019

C.19

19. Create industry-driven Quality assur-ance programme (standard, certification, licensing, etc.) that is integrated with a government-led system of registration

ITES sector

Bureau of Standards and JAM-PRO

2016 100,000

Quality assur-ance programme established and used by 50% of the sector by 2019

C.20

4. Secure market access for Jamaican ITES(Refer to Market Access and trade Information Strategic Action Plan for additional initiatives)

20. Build the capacity of businesses in the ITES sector to access global value chains and negotiate non equity modes (NEM) contracts

IT and ITES sector

Ministry of Justice / Consul-tancy

mid 2017

90,000

Capacity building initiative deliv-ered once per year

C.215. Develop sound infrastruc-ture to support the growth of the ITES sector

21. Continue the development of the Nag-go Head Technology Park along planned lines and ensure that the remaining acre-age can leased for further development by other investors.

ITES sector MIIC / FCJImmedi-ately

-

C.22

22. Build incubator space for the Naggo Head Technology Park as this falls outside the responsibility of the private sector.

ITES sector

Factories Corporation of Jamaica (FCJ)

2019

To be funded by the DBJ ICT loan facility

Incubator space built

Total estimated ITES Budget – US $1,752,000.00

Light Manufacturing Sector Strategy13Section 1

Light Manufacturing Sector Analysis

The transition from agriculture to manufactur-ing remains one of the fastest routes to higher productivity and increased standards of living among citizens of developing economies. In developed societies the manufacturing of goods is a hallmark and tangible expression of content, creativity and competitiveness. The manufacturing sector continues to play a key role globally and will certainly sustain its significance for the Jamaican economy.

The manufacturing sector constitutes 70% of global trade in 2010 and 16% of international GDP. The sector employed some 45 million persons in

advanced economies alone, according to McKinsey Global Institute. Jamaica’s manufacturing sector’s contribution to GDP remained below the global average at approximately 8.4% in 2013, accord-ing to the Economic and Social Survey of Jamaica (2013), pointing to the need for increased growth in this sector. Export development may give the sector the needed impetus to grow and contrib-ute more significantly to economic development and employment creation.

On the global stage, the manufacturing sector is important to both developed and developing economies. Manufacturing is a diverse sector and

Global Trends in Manufacturing13.1



one size does not fit all. Solutions and strategies must cater to the specific needs of each sector. However, there are a number of global trends that must be considered in strategic planning for the sector.

There are a number of global trends that are creating new opportunities that Jamaica needs to monitor. On the heels of the recent Global Economic Recession (2008-2010), the worldwide

economy has experienced a volatility and uncer-tainty that have created challenges for manufac-turing companies. Even as the global economy recovers, manufacturing faces long-term shifts, including a declining contribution to the economy, changes in consumer demand, rising factor input costs, talent shortages, the spread of new technol-ogies and innovations, and the effects of govern-ment policies for the sector.

Global Trends in Manufacturing cont’d

Empirical data shows that the role of manufac-turing in the economy, while still important is changing in significance. Generally manufactur-ing’s contribution to GDP reaches a peak and then plateaus at around 20-35% of GDP, accord-ing to the McKinsey Global Institute. Beyond that point consumption shifts towards services. This is important in terms of planning for the sector.

Similarly, because of increased technologies and optimised processes, manufacturing’s contribu-tion to the share of employment typically declines over time. For instance, manufacturing’s share of employment in the US dropped from 25% in 1950 to 10% in 2010, according to the Boston Consulting Group. In South Korea it went from 28% in 1989 to 17% in 2013 and in Germany it declined from 35% in 1970 to 17% in 2008.

And according to the Organisation for Economic Cooperation and Development (OECD), the UK and Australia have seen their share of manufactur-ing jobs decline by around two-thirds since 1971. But the phenomenon is also affecting emerging and developing economies. China’s manufacturing employment share peaked at around 15% in the mid-1990s and has generally remained below that level since. Manufacturing jobs in Brazil climbed as a proportion of total employment from 12% in 1950 to 16% in 1986. Since then it’s plateaued to around 13%. This has critical implications for employment planning on a national level, suggest-ing in Jamaica eventually the shift will focus more on services. However, while the shift will inevitably take place, manufacturing will continue to play a key role in the economy.

Manufacturing’s Economic Contribution is Shrinking13.1.1

The shift in demand growth to developing econ-omies greatly increases the complexity of manu-facturing. Brazil, Russia, India, China, Africa and Australia are not homogenous markets; they are made up of extraordinarily diverse demographic, geographic, cultural, psychographic, ethnic and income segments, many of which can be as large as entire developed countries. For example, at US $527 billion, Shanghai’s GDP is the same size as Switzerland’s and larger than that of Belgium, Denmark, and Norway. The population of Mumbai

(India’s largest city) is equivalent to the popula-tion of the entire CARICOM region – 16 million. As the number of markets (and submarkets) in the developing world multiplies, manufacturers must customise their products to keep up with customer preferences. This raises the pressure to adapt manufacturing and design footprints to the new patterns of demand. And with greater varia-tion in products, the productivity challenge is likely to intensify.

Goods are increasingly created in a number of stages that take place across different locations and in different countries. Raw materials are obtained in one location; intermediate inputs, such as parts and components, are produced in another and the goods are then exported to yet

a different location for further processing and/or assembly into final products. Today, there are many firms that produce goods without their employees having even touched the actual products (as is the case of Cisco with products such as routers and switches or Apple with phones).

The confluence of two megatrends, middle class income growth and urbanisation, is driving increased sales of processed food. According to the OECD, the size of the global middle class is projected to increase from 1.8 billion people (2010 estimate) to 3.2 billion by 2020. Of this projected growth, 85 per cent is expected to come from Asia. Based on analysis of IHS Global Insight data, middle class households in developing countries (households with real incomes greater than $20,000 per year) are projected to increase

54 per cent by 2020 compared to eight per cent in developed countries.

Furthermore, in 2015, 130 million households representing 460 million residents in Brazil, China, India, Indonesia, Mexico, the Russian Federation, South Africa and Turkey will have “graduated” from poverty to the middle class, according to the Boston Consulting Group. The expected shift in demand may well disrupt existing supply chains.

Demand Fragmentation

Fragmented Manufacturing Activities

A Growing Middle Class

13.1.2

13.1.3

13.1.4



A by-product of rising wealth and productivity in developing economies is rising wages. From 2006 to 2013, real wages in the group of advanced economies grew at about 0.3 to 0.9 per cent per year, according to the International Labour Organ-isation Global Wage Database, 2015. For the same period, real wages in emerging economies grew by 5.9 to 9.2 per cent annually. In Latin America, real wage growth ranged between at 0.2 to 4 per cent annually from 2006 to 2013. Rising wages remain a mark of success for developing nations, in many cases as a consequence of economic devel-opment and rising prosperity.

Today, this presents opportunities for “next frontier” developing economies to capture any labour-intensive work that leaves countries with rapidly rising wages such as China. Countries such as Bangladesh, Cambodia, Indonesia, Vietnam, and other developing economies are already expe-riencing growth in labour-intensive industries because of their cost advantages. Jamaica can take advantage of this too by strategically positioning itself in this regard.

In spite of technological advancements, human resources still play a key role in the development, implementation, operation and general success of a manufacturing system. In fact, human operators can be considered the most flexible component of a manufacturing system. A strong emphasis is therefore needed on people’s unique role as inno-vators and decision-makers in the manufacturing enterprise, which will be developed and cultivated by better integrating humans with technology.

However, a critical challenge in terms of talent is being faced in the international arena. In a 2011 survey, 26 per cent of employers from Euro-pean, Middle-Eastern and African (EMEA) nations reported having difficulty filling jobs for lack of qualified talent, particularly technicians and engi-neers, and 80 per cent of Japanese companies reported the same problem, according to the Manpower Group, 2011. In the same year, when the US unemployment rate exceeded 9 per cent, a survey of 2,000 US companies found that 43 per cent of manufacturing companies, had positions

open for more than six months that they could not fill, according to the McKinsey Global Institute (MGI). For example, in Brazil, China, and India, the rapid growth in knowledge-intensive manufactur-ing is expected to create shortages of both high-skill workers (such as engineers and scientists) and medium-skill workers (such as technicians and factory workers) by 2030, predicts MGI.

The manufacturing talent shortage is exacerbated by demographic trends, particularly the aging of the labour forces in advanced economies and China. In the next two decades, the growth of the global labour force will slow; in many advanced economies, the growth will be negligible. Manufac-turing companies risk losing much of their valuable expertise and experience to retirements in the coming decade. This has significant implications for the manufacturing sector in Jamaica as many skilled workers could be drained from the econ-omy to perceived higher opportunities overseas.

Rising Wages

Talent Shortages

13.1.5

13.1.6

The sustained flow of people from rural areas and smaller towns to major cities combined with the deceleration of rural population growth will result in an increase in the share of population living in urban areas, according to Cities on the Rise, Tour-ism Intelligence International, 2013. Today, more than half of the world’s population already lives in cities and according to the United Nations, this

figure will increase to 72 per cent by 2050. The fastest growth will be witnessed in large cities in Africa and Asia. It is estimated that the urban population in Asia will increase from 1.36 billion to 2.64 billion by 2030, while in Africa it will rise from 294 million to 742 million, and from 394 million to over 600 million in Latin America and the Carib-bean (United Nations, 2011).

Concerns related to the environment are evident in the increasingly environmentally conscious marketplace. Many keywords are being utilised in marketing to attract the new conscious consumer – Green, Sustainable, fair trade, Locally grown, Socially Responsible, Organic are just a few of these terms. But it is the consumers who are driving this trend. Over the years, a majority of consumers have realised that their purchasing behaviour had a direct impact on many ecological problems. Customers adapted to this new threat-ening situation by considering environmental issues when shopping (e.g. checking if the product is wrapped in recycled material) and by purchasing only ecologically compatible products (e.g. biode-gradable paint, CFC-free hairspray or unbleached coffee filters). Perhaps the most convincing evidence supporting the growth of ecologically

favourable consumer behaviour is the increasing number of individuals who are willing to pay more for environmentally friendly products.

New findings from a Nielsen survey of more than 28,000 online respondents from 56 countries around the world provide fresh insights into the growing environmental consciousness trend. Two thirds (66%) of consumers around the world say they prefer to buy products and services from companies that have implemented programs that are green or social in nature. That preference extends to other matters too; they prefer to work for these companies (62%), and invest in these companies (59%). A smaller share, but still nearly half (46%), say they are willing to pay extra for products and services from these companies.

Urbanisation

Growing Environmental Consciousness

13.1.7

13.1.8



Over the past decade and a half, commodity prices have been growing at unprecedented levels not seen since the early 1900s (in real terms), as shown in the diagram below. When global economic growth returns in earnest, commodity prices are expected to remain high and volatile as global resource markets oscillate in response

to surging global demand and inelastic supplies. Those companies in Jamaica involved in the manu-facturing of goods stand to benefit from these relatively high prices. However, margins could be eroded because of rising costs, particularly energy costs.

In the past decade, increasingly capable tools have enabled substantial productivity gains in manu-facturing. We see a robust pipeline of technolog-ical innovations that suggest that this trend will continue to fuel productivity and growth in the coming decades. Computer aided design and computer aided manufacturing, for example, have assisted manufacturers in increasing productivity, quality and output consistency.

Manufacturing will benefit from important inno-vations in materials, product design, production

processes, and manufacturing business models. Companies now have more scale options, not just in the volume of production but also in the markets they can target and materials they can manipulate. Advances in lightweight materials, additive manufacturing, frugal innovation, and the so-called circular economy (i.e., recovering and recycling materials used in finished products) will change how manufacturers use metals and other materials and raise resource productivity and effi-ciency.

High and Volatile Commodity Prices

Impact of Technology and Innovation

13.1.9

13.1.10

Figure 21Commodity Price Index Index: base year = 2000

Source: World Bank, International Monetary Fund, Organisation for Economic Cooperation and Development, 2012

A major trend in manufacturing is the increased use of information technology. Numerous exam-ples of information technology exist in the domain of manufacturing, including its support of digi-tal-control systems, asset-management software, computer-aided design (CAD), Big Data and the Internet of Things, energy information systems, and integrated sensing according to the US Institute for Defence Analysis, 2012.

The greater use of information technology in manufacturing links the design stage of an individ-ual component to the larger assembly manufactur-

ing system to the use of manufactured products (Iorio 2011). The use of computer-enabled tech-nologies improves communications that enable both “smart manufacturing” in the factory and “smart supply-chain design”. This in turn, ensures the efficiency in sending the right products to the right suppliers. The ease of communication is also leading to increasing volumes of data that must be appropriately managed. The growth of fields such as data mining and data analytics is evidence of the increasing concern about appropriate manage-ment of high volumes of data.

Another key trend is the move toward flexi-ble manufacturing to meet customer needs and respond to external impediments. Growing globalisation, shortened product and technology life cycles, just-in-time production, ever-chang-ing customer demand, and market dynamics are requiring consideration of a comprehensive view of product or production adjustments when made anywhere in the manufacturing system. Achiev-ing truly flexible manufacturing facilities requires advanced processing machines (computer aided design and computer aided manufacturing) capa-ble of rapidly changing to new designs and new

materials, which not only shorten product-devel-opment cycles but also make facilities more robust against supply-chain disruptions (Ehmann 2011). Adaptive machines are able to physically move to change the order of operations or internally adjust to deal with changes. Such machines could possibly even predict where changes will show up through Big Data analytics and machine learning (Poon, 2013). These changes in turn will dictate the development of new types of manufacturing processes and how we approach the design of products.

Greater Utilisation of Information Technology

Flexible Manufacturing

13.1.11

13.1.12



The light manufacturing sector in Jamaica is made up of a number of segments as indicated in section 13.5.1 below. For the purpose of this competitive analysis, two of the largest segments of the light manufacturing sector, plastics and rubber, will be

used as examples for demonstrative purposes. The plastics and rubber segments, accounted for 18.3% and 15.7% of the light manufacturing sector in Jamaica respectively.


The Global plastics industry is dominated by China, USA and India, with significant contributions by the Middle East and Latin America. Jamaica generated US 5.8 million in plastics manufacturing in 2013,

a small percentage of global output. The Figure below gives a brief overview of the global plastics industry.

Plastics13.2.1

Figure 21Commodity Price Index Index: base year = 2000

Source: Adapted from the International Association of Plastics Manufacturers, 2015

Given the sheer size of the manufacturing sector globally Jamaica cannot compete ‘head-on’ with giants such as India, China and the USA. However, Jamaica can make inroads and create real growth

for the light manufacturing sector by competing in three key areas: intelligence, technology and branding.

How Can Jamaica Compete?13.3

The global rubber industry is dominated by the Asia-Pacific region where the top five rubber producing nations are based. Thailand and Indo-nesia roughly account for 30% of global produc-tion each (i.e. nearly 60% of total global rubber output). Malaysia and India each account for 8%

respectively and Viet Nam for 7% share of global production of rubber. Putting rubber production in perspective, with revenues of US $5 million in 2013, Jamaica accounts for less than a fraction of a per cent of global rubber output.

The light manufacturing sector in Jamaica needs to focus on those products that are driven by what the consumer wants and not merely by what is currently being produced. The sector needs to therefore understand the markets, perceive consumer needs, rapidly respond to emerging trends and craft products that surpass customer

expectations. In order for this to be a reality the sector needs to rely on market information and analysis. The role of the support agencies such as JAMPRO will become even more critical in this regard. The government also needs to support manufacturers and encourage them to expand their production and market focus.

Rubber

Intelligence

13.2.2

13.3.1

Region Output (‘000 Tonnes)

Asia-Pacific 11249

Europe, Middle East and Africa 510

Americas 320

Table 16 - Rubber Production in 2013

Source: Rubber Statistical Bulletin, October – December 2014 edition



The light manufacturing sector is heavily driven by technology. Many developed industries are moving ahead and creating competitive clout by adopting the latest manufacturing and data mining technologies. Jamaica needs to recognise the important role that technology plays in increas-ing productivity, reducing costs, improving quality, targeting customers and surpassing their expecta-tions with surgical precision.

The government has been providing tremendous support in assisting the economy to advance in technology such as the implementation of the Technology Enrichment Programme. In addition, Science, Technology and Innovation initiatives

continued to support the country’s drive to create more competitive business structures, in keeping with Vision 2030. These initiatives included the adoption of product and service standards and the accreditation of conformity assessment bodies to key ISO standards. There were also key inter-national partnerships such as the one with Spain to fund the Centre of Excellence for Advanced Technology in Agriculture (2010–2013). However, the private sector needs to understand the importance of technology as a competitive tool. Better systems need to be in place to incentivise the private sector, particularly in manufacturing, to keep in line with trends in technology.

Branding is another key competitive tool for Jamaica. Manufacturers need to be able to ‘piggy-back’ on the strength of the Jamaican brand in expanding in existing markets and penetrating new ones.

Marrying what makes Jamaica unique and special with the precise requirements of the market and facilitated by advanced technology is the formula for competitive success of the sector.

Technology

Branding

13.3.2

13.3.3

After careful consideration and analysis the follow-ing markets presented in the table below priori-tised and are ranked in order of importance. The sheer market size, strong demand for light manu-factured products, geographic proximity and the presence of the Jamaican Diaspora makes the

USA, Canada, the Caribbean and Latin America top markets for light manufactured products from Jamaica. The UK is also important because of the size of the market and strong demand, as well as, a strong Diaspora presence.


MarketMarket

Size

Demand for Light Manufactured

Products



Ease of Market Penetration

USA High High High High Medium

Canada High High High High Medium

Caribbean (Trinidad and Tobago, Barbados, Guyana, Dominican Republic,

Cuba)Medium High High High High

Latin America (Brazil has the strongest poten-tial, followed by Venezuela and

Colombia)High High High Low Medium

UK High High Low-Medium High Medium

Europe (Netherlands, Eastern Eu-rope, Germany, France, Sweden)

High High Low Low Low-Medium

Asia-Pacific (Korea, Japan, Singapore) High High Low Low Medium

Africa (Nigeria, Kenya, Uganda) High High Low Low Low-Medium

Table 17Priority Markets for the Light Manufacturing Sector



MarketElectrical Products

Optical / Photo Apparatus

Plastics RubberPaper and Pa-per Products

Furniture and lighting

USA High Medium-High Medium-High High Medium-High High

Canada High Medium Medium-High High Medium-High High

Mexico Medium-High Low-Medium Medium Medium-High Medium Medium

Trinidad and Tobago

Medium-High Low Medium-High Medium Medium Medium-High

Barbados Medium Low Medium Low-Medium Medium Medium

Dominican Re-public

Medium-High Low Medium Low-Medium Medium-High Medium-High

Cuba Medium-High Low Medium Medium-High Medium-High Medium-High

Guyana Low-Medium Low Low Low-Medium Medium Medium-High

Brazil High Medium-High Medium High Medium-High High

Venezuela Medium-High Low Medium Medium-High Medium Medium

Colombia Medium-High Low Medium Medium-High Medium Medium

UK High Medium Medium-High High Medium-High Medium-High

Netherlands Low-Medium Medium Low Low Medium Low-Medium

Eastern Europe Medium Low Low Low Medium Low

Germany Medium Medium Low-Medium Low-Medium Medium Low

Sweden Low-Medium Low Low-Medium Low-Medium Medium Low

France Medium Low-Medium Low-Medium Low-Medium Medium Low

Korea High Medium Low-Medium Low Low-Medium Low

Japan Medium Low Medium Low Low-Medium Low

Singapore Medium Low Low Low Low Low

Africa (Nigeria, Kenya,

Uganda)Medium Low Low Low-Medium Medium Low

Table 18Priority Markets for Light Manufacturing Products / Segments


The Light Manufacturing Sector in Jamaica13.5

Light manufacturing is typically less capital intensive than heavy manufacturing, and is more consum-er-oriented than business-oriented (i.e., most light manufacturing products are produced for end-us-ers rather than as intermediates for use by other industries).

For the purposes of this National Export Strategy, the light manufacturing sector in Jamaica is deemed to comprise the following products:

• Electrical, electronic apparatus• Optical, photo, technical, medical and other

related devices• Plastics and articles thereof• Rubber and articles thereof

• Tools, implements, cutlery, and related products of base metal

• Soaps, lubricants, waxes, candles, etc.• Furniture and lighting• Clocks and watches and parts thereof• Paper and paperboard and articles of pulp,

paper and board• Printed books, newspapers, pictures, and

other printed products• Glass and glassware• Miscellaneous manufactured articles

Segments involving steel production, production of industrial chemicals, heavy equipment and machin-ery typically found in the manufacturing industry are not under consideration in the context of the National Export Strategy.

Definition and Composition of the Light Manufacturing Sector13.5.1

Based on the above definition and composition, total export sales from the light manufacturing sector was US $31.6 million in 2013. Export sales from the light manufacturing sector was lead by the electrical and electronic apparatus segment which accounted for US $7.7 million in export sales or 24.6% of total light manufacturing exports in 2013. The second largest export-generating segment in 2013 was the optical, photo, technical apparatus segment, which typically accounts for 4% of the sector. However, there was an uncharacter-istic jump in export sales from the optical, photo, technical apparatus segment of US $5.4 million between 2012 and 2013 bringing the segment

to position number two with US $6.6 million in export sales or 20.9% of total export sales from the light manufacturing sector. The plastic and rubber segments are the other two key segments of the light manufacturing sector, each accounting for 18.3% and 15.7% of export sales respectively. The plastic segment created US $5.8 million whilst the rubber segment generated US $5 million in export sales in 2013. While the plastic segment experienced growth of 22% between 2012 and 2013, the rubber segment declined by 42% over the same period. This is partially due to an 18% decline in the price of rubber from US $141 in 2012 to US $116 in 2013. See Figure 23 overleaf.

Breakdown of Light Manufacturing Exports by Segment13.5.2



Figure 23 - Breakdown of Light Manufacturing Exports by Segment, 2013

Figure 24 - Export Performance of Light Manufacturing 2004-2013(USD Millions)


Over the 2004-2013 decade, export sales from the light manufacturing sector expanded by 62% from US $19.5 million in 2004 to US $31.6 million in 2013. This expansion, however, was not with-out obstacles. One of the greatest challenges over the period was the Global Economic Recession

between 2008 and 2009. The sector declined by 9% between 2008 and 2009 and a further 28% between 2009 and 2010. However, recov-ery began in 2011 with a 63% growth over the previous year, bringing the sector to pre-recession export levels. See Figure 24.

Export Performance of the Light Manufacturing Sector13.5.3

Between 2012 and 2013 export sales from the light manufacturing sector experienced growth of 11.2% this compares with a contraction of 0.8% of overall manufacturing exports in Jamaica over the same period.

While growth is necessary, it is not sufficient. The sector still remains relatively small; in 2013 light manufacturing export sales only accounted for

0.22% of GDP and 0.7% of total exports (goods and services). In order for the sector to take its rightful place as a generator of employment and income for Jamaica, a market-focused and consumer-oriented expansion into other products and niches will be needed for the long-term viabil-ity of the sector.



SWOT Analysis13.6

• Brand equity and strong country of origin reputation.

• Unique products

• Diverse product range

• Strong export orientation

• Support programmes in place for the manufacturing

• Presence of manufacturing compe-

tition to drive performance

• Standard compliance and quality products

• World-class enterprises within the sector

• Ability to make high quality products

• Established niche markets, brands and products

• Established channels to the target markets

with experience to expand reach

• Reasonable and improving product devel-

opment competency exists

• Limited use of innovative production tech-

nologies. The sector is lagging behind many

developed economies in this regard.

• Limited availability and access to

competitive factory space.

• Insufficient creative use of the ‘Brand Jamaica’.

• Need for greater environmental and green prac-

tices to preserve and conserve the natural

resources on which the sector so heavily relies

– e.g. wood for furniture or paper production.

More monitoring in this regard is needed.

• Many companies are undercapitalised.

• Many lack good marketing skills (marketing and

brand-building is weak on average both at the firm

level and at the manufacturing sector level).

• Lack of information on the sector – no needs

assessment carried out recently for the sector.

• Limited economies of scale as many plants are rela-

tively small compared to international counterparts.

Production is geared mainly for the domestic market.

• Over-dependence on the domestic market.

• Limited availability of credit and financing

• High of costs of some produc-

tive inputs – energy, labour, etc.

• Need for greater coordination and communi-

cation among manufacturing associations such

as the Jamaica Manufacturers’ Association, the

Jamaica Exporters Association, the Small Busi-

ness Association of Jamaica and JAMPRO.

• High Shipping and Distribution costs.

• Inability to produce the volumes required

to sustain global export markets

• Lack of comparative advantage re economies of scale

• Lack of innovativeness

• Weak export focus among many poten-

tial and current exporters

• Exporters are too USA-focused

• Some companies lack the aggressiveness to

go after new market opportunities.

• Lack of market intelligence to drive R&D and production of

goods that are in keeping with international market trends.

• Mistrust, poor networking between firms

• Weak strategic alliances between inter-

nal and external entities

• High Import content

• Few companies follow best practices and quality standards

• No foresight and planning related to new

product groups (value creation)

• Poor supply chain management.

• Limited availability of skills necessary to

build viable businesses including:

• Quality Assurance

• Production/Factory Management.

• Technical/Engineering/Maintenance.

• Out-dated production systems and lack

of new technologies in some areas.

• Low utilisation of Quality Management Systems (QMSs).

• Weak linkages to R&D resources (private and academic).

• Limited use of environmentally friendly/clean produc-

tion technologies (inefficient energy technologies).

Strengths Weaknesses cont’d

Weaknesses

• Proximity to main export markets

(USA) and the Caribbean.

• Strong demand for Jamaican products,

which is increasing in some markets.

• Plant layout and design support available.

• Access to product knowledge.

• Training programmes are available.

• Growth in potential linkage indus-

tries – such as tourism.

• The potential for the development of industrial

parks for the manufacturing sector as a result of

the logistics hub initiative on the South Coast

• Good linkages to global interest in lifestyle

products – performance and health enhanc-

ing; support interest in Brand Jamaica

• The utilisation of Big Data and other tech-

nologies to create more consumer/

market-focused production practices

• Green manufacturing on the rise

• Growing service orientation of

the manufacturing sector

• Continued increase in labour costs without

corresponding productivity improvements.

• Low growth in the domestic market.

• Exports of Jamaican “knock-offs”.

• Violation of geographic indicators by

foreign manufactured products.

• New product development in competing countries.

• Multiple occurrences of products arriving with-

out proper labelling, etc. (leaky border and

there is insufficient protection of consumer

and the manufacturers/employers).

• Issue of non-comparable treatment of imports –

not same level of diligence as trading partners.

Poor response from domestic authorities to halt-

ing products that should not be on the market.

• A floating Foreign Exchange regime. Whilst

managed by the BOJ, the floating system

does not make for easy planning.

• Lack of competitive interest rates to allow

for reinvestment in the sector.

• High energy costs.

• Constraints in the macroeconomic and business envi-

ronment, particularly complex regulatory processes.

• High crime and security issues.

• Constraints in transport and other infrastructure,

which in turn makes business costly or inefficient.

• Negative aspects and implication of regional

and international trade liberalisation.

• Restrictions imposed by international product and

process standards such as Hazard Analysis and Critical

Control Points (HACCP) and ISO 9000 and 14000.

• Limited availability of higher-end talent in the

sector and strong ‘brain drain’ from Jamaica

• Competition from other countries in the region

whose cost of production is much cheaper

Opportunities Threats



With the growing trend towards more experi-enced, knowledgeable and demanding consum-ers with sophisticated tastes and preferences, increased urbanisation, shifting demand from west to east, growing environmental consciousness, talent shortages and advancement in technology, there are a number of implications to be consid-

ered and opportunities to be grabbed by the manufacturing sector in Jamaica.

These implications and opportunities explained in the proceeding sections.

Key Opportunities and Implications for Jamaica13.7

With the demand shift that is taking place globally, coupled with the diversity of consumers across all markets, in order for Jamaica’s manufacturing sector to remain competitive it has no choice but to produce what the markets want rather that what it can or desires to produce. This points to the need for a stronger market focus on the part of manufacturers. Export support agencies, such

as JAMPRO and the Jamaican Exporters Associa-tion, need to provide timely and relevant market intelligence to manufacturers so that they can make informed decisions about which products to produce and which markets to target. In addition, Jamaican manufacturers need to start looking to non-traditional markets for growth opportunities – South America and Africa for example.

Given the heterogeneity of markets, it will become increasingly necessary for manufacturers to adopt a customised approach. The ability to manufacture a customised / niche product at different sites may overcome the drive towards commoditisation and economies of scale in some sectors. From the design and production perspective, manufactur-ers will need to respond very quickly to a much wider variety of product specifications. Emerging technological solutions will need to be adopted

to ensure the flexibility and permanent adaptation required in production systems.

On the other hand, smaller manufacturers might want to focus on specific niche products to satisfy particular segments of the markets. The diversity of the markets creates vast opportunities to find the right market niche fit for Jamaican manufac-turers.

Innovation is enabling information-driven intelli-gence in both products and processes. Big data, advanced analytics, social technologies, and use of intelligent devices to monitor production machin-ery, supply chains, transportation, and products in use (also known as the “Internet of Things”) are all

bringing intelligence to how products are designed, built, and used, according to Tourism Intelligence International’s Big Data – Delivering the Big Picture to Drive Competitiveness, 2014. To date, this sort of technology is not being use in Jamaica in any large way. This is a missed opportunity for manu-

Market-based Manufacturing

Customised Manufacturing

Information-driven Manufacturing – Big Data and the Value Chain

13.7.1

13.7.2

13.7.3

facturing companies to optimise their processes on the supply side and to match customer needs with surgical precision on the demand side.

The benefits that the manufacturing sector can derive from the adoption of Big Data techniques includes improved efficiency in design and produc-tion, further improvements in product quality, and better meeting customer needs through more precisely targeted products and effective promo-tion and distribution. For example, big data can help manufacturers reduce product development time and eliminate defects prior to production

through simulation and testing. Using real time data, companies can also manage demand plan-ning across extended enterprises and global supply chains, while reducing defects and rework within production plants. Overall, big data provides a means to achieve dramatic improvements in the management of the complex, global, extended value chains that are becoming prevalent in manu-facturing and to meet customers’ needs in inno-vative and more precise ways, such as through collaborative product development based on customer data.

R&DSupply chain

ProductionMarketing and Sales

After Sales Service

Build interoperable, cross-functional R&D and product design databases to enable con-

current engineering, rapid experimentation, simulation, and co-creation

√ √

Aggregate and share customer data to improve service, increase sales, and enable

design-to-value√ √ √

Source and share data through virtual col-laboration sites (idea marketplaces to enable

crowdsourcing)√ √ √

Implement advanced demand forecasting and supply planning across suppliers and use exter-

nal variables√ √ √ √

Implement lean manufacturing; model and optimise production; develop dashboards √

Implement sensor data-driven analytics to improve throughput and enable mass custom-

isation√

Collect real-time after-sales data from sensors and customer feedback to trigger services and

detect flaws

√ √ √ √

Improve supply-chain visibility through control towers and organisation-wide collaboration √ √ √ √

Table 17Priority Markets for the Light Manufacturing Sector

Source: Big Data: The Next Frontier for Innovation, Competition and Productivity, 2011



The rising cost of inputs (wages and energy), as well as the growing trend towards more envi-ronmental consciousness is giving rise to green manufacturing. The trend towards environmental consciousness is influencing government policy and legislation. Vision 2030 speaks to the green economy and environmental sustainability. Envi-ronmental consciousness also draws pressure from interest groups. These ingredients combined are forcing many companies, particularly in manu-facturing, to adopt more ‘green’ technologies and production practices.

By 2035 it is expected that world energy consump-tion will more than double, from a 1990 baseline, to roughly 770 quadrillion Btu, and outpace the increase in population over the same time period, according to the US Energy Information Adminis-

tration. Demand for and cost of energy will only increase with future population growth and indus-trialisation. All manufacturing sectors will be forced to seek new ways of manufacturing, from energy efficient product designs to energy efficient oper-ations and logistics. Partnerships between public and private sectors will become increasingly important in solving the energy problem.

It seems that Jamaica is somewhat lagging behind in this regard and is missing opportunities to reduce costs through better environmental and energy practices, as well as the opportunity to convert green manufacturing into a real viable revenue earner in terms of offering and monetizing green services.

Green Manufacturing13.7.4

Jamaica’s manufacturing sector must innovate to stay ahead of regional and international competi-tors who are already making significant strides in this regard. The sector must however, be enabled by infrastructure and a policy environment that better supports intelligence gathering, research and development and innovation in science and technology as well as making funds available to support projects. In the modern-day manufactur-ing environment, being able to develop creative ideas, address new and complex problems and deliver innovative products and services that meet and exceed the expectations of interna-

tional markets will be the hallmarks of competitive success for the manufacturing sector in Jamaica. But even more critical for innovation to flourish will be access to talent that will be capable of driving creativity. Jamaica must therefore invest in people to make this a reality.

Jamaica already scores low on the innovation index, pointing to the need for strategies and poli-cies to be developed to foster greater innovation amongst Jamaicans. See diagram below.

Fostering Innovation13.7.5

In order to increase their marketability, manu-facturers are adopting new strategies by attach-ing services to their final products. Thus, a new manufacturing paradigm is emerging, the so-called service-oriented manufacturing. This is in keeping with the trend towards a growing service econ-omy and manufacturers seeking to remain rele-vant amidst rapid and radical transformation. The services are typically business-to-business (B2B) either along the value chain or through business integration (either vertical or backward). For

instance, in the US, roughly 37% of activities in the manufacturing sector are service-oriented, accord-ing to the US Bureau of Labor Statistics. Grace for example, offers B2B services to suppliers of raw materials (backward vertical integration) to ensure consistent product quality. As of yet, Grace does not charge for these services but there is no reason for this not to be the case in the short to medium term both domestically and in terms of exports.

Marrying Services and Manufacturing13.7.6

Figure 25 - Innovation Index of Selected Countries, 2014

Source: The International Monetary Fund, 2013 and The Global Innovation Index, 2014



In a more globalised world, manufacturing systems increasingly face the challenge of managing opera-tions across vastly distributed production environ-ments. They need to adapt to a global customer base and recognise arising market opportunities quickly. Some of the required qualities and char-acteristics identified by international studies for managing distributed manufacturing systems include:

• Dynamic collaboration across extremely complex multi-level, reconfigurable supply chains. Tightly interlinked inter-national value chains will lead to new organisational competencies in complex structures.

• An agile supply chain. An agile supply chain will require a radical change from the use of high inventories and order quantities based on maximum capacity utilisation towards a more predictive, make-to-order approach.

• Transparent and real time provision of information on products, processes and people. Big data will play a key role.

Distribution-based Manufacturing13.7.7

A critical challenge is being experienced interna-tionally. An estimated 10 million jobs with manu-facturing organisations cannot be filled today due to a growing skills gap, according to the World Economic Forum. Despite the high unemployment rate in many developed economies, companies are struggling to fill manufacturing jobs with the right talent. And emerging economies cannot fuel their growth without more talent. Access to talent will become more important and more compet-itive. Today’s skills gap will not close in the near future. Companies and countries that can attract, develop and retain the highest skilled talent – from scientists, researchers and engineers to technicians

and skilled production workers – will come out on top. In the race to future prosperity, nothing will matter more than talent.

Within the context of the Special Economic Zones and the Logistics Hub, Jamaica has a real opportu-nity to attract foreign direct investment in terms of setting up manufacturing concerns and supply-ing skilled workers from Jamaica to fill the talent void. Furthermore, the cost of labour in Jamaica is lower than many advanced economies, making this option attractive. This will help stimulate job creation and help boost the manufacturing sector.

Filling the Talent Gap13.7.8

Section 2Light Manufacturing Sector Value Chain and Strategic Plan

Light Manufacturing Value Chain13.8



Light Manufacturing Vision

Light Manufacturing Objectives

Light Manufacturing Targets

13.9.1

13.9.2

13.9.3

The vision for the Manufacturing sector as articulated in the Vision 2030 Jamaica – National Development Plan is as follows:

The linchpin of this vision is competitiveness, productivity and value added.

The main objective in light of the sector’s vision is as follows:

• To foster greater export focus and less domestic dependency in the manufactur-ing sector

• To improve the competitiveness of the manufacturing sector through the use of more modernised technology and manu-facturing systems, enhancing the skills of the workforce and better understanding the needs of the markets.

The targets for the light manufacturing sector are as follows:

• To grow the light manufacturing export sector by 25%

• To reach export levels of US $25 million by 2019

A flexible, robust and internationally competitive light manufacturing sector defined by market intelligence and technological innovation, and

bolstered by strategically leveraging Jamaica’s comparative advantages to increase productivity and to foster greater export orientation in the manu-

facturing sector overall.

13.9 Light Manufacturing Sector Strategic Plan Light Manufacturing Action Plan13.9.4There are a number of issues and challenges as expressed in the SWOT analysis above as well as in the Vision 2030 Jamaica – National Development Plan. Many of these issues are addressed in the action plan below. A number of issues affecting the sector, however, are crosscutting in nature and are accounted for under the action plans for the crosscutting areas.

Ref. #


Time Frame

Bud-get

(US$)


D.1

1. (a) To develop a cadre of exporters in the manufactur-ing sector that are globally focused rather than US focused by exposing them to new potentially profitable markets and by providing relevant technical and capac-ity –building, and networking support to help them make practical steps to infiltrate and/or growing exports to markets outside of the USA.

1. (b) To expose manufactur-ers at all levels to information to make their operations export-ready.

1. Pool and regularly disseminate informa-tion about export opportunities, trends, and technical and financial support, especially to those in their early stages of export development. Information to be presented in easy to understand language, using readily accessible hard and digital formats.

Manufacturers – all levels

JAMPRO and JMA

Early 2016

10,000

Market intelli-gence developed and disseminated to target group and updated annually

D.2

2. Develop outreach activities to reach formal and informal manufacturers/pro-ducers to stimulate a change of mindset about participating in export markets. (Go to the people rather than assume that they will come).

Non-export Manufacturers – All sizes

JAMPRO and JMA

Mid 2016

50,000

Outreach programmed developed and implemented

D.3

3. Review and audit websites that will form part of the “single export window” and identify weaknesses in customer orientation. Improve content, layout and structure. Promote the updated websites.

All export sup-port agencies

Trade Board Limited to initiate with support from JAM-PRO, JMA and JEA

End 2016

8,000- Websites reviewed and updated

D.4

4. Use effective channels, including social media, radio, television and print, and var-ious other networks and sector organisa-tions to promote and disseminate export information.

Manufacturers – All sizes

JAMPRO and JMA

Mid 2016

75,000

- Appropriate media selected- Promotion of export informa-tion implement-ed

D.5

5. Develop a feedback or follow up mech-anism to facilitate queries or questions related to export information - to see how well manufacturers’ information and technical support needs are being


JAMPROMid 2016

- Feedback mechanism developed and implemented

D.6

2. Help manufacturers to become more export-ready / enhance current export activities

6. Develop an export orientation training programme through training and net-working events as well as workshops and webinars aimed at exposing exporters to export opportunities, how to export, mar-ket intelligence and advice about export processes and systems, etc.

Current and potential exporters – All sizes

JAMPRO and JMA

Early 2017

125,000

- Export orien-tation training programme developed and implemented- One annual ex-port orientation workshop- 1 Monthly we-binar on different areas such as export processes, markets, oppor-tunities, etc.



Ref. #


Time Frame

Bud-get

(US$)


D.7

7. Develop and promote success stories specific to the manufacturing sector (using appropriate content) to encourage non-exporters to start exporting and cur-rent exporters to expand into new markets and seize new export opportunities

NB: Ensure mix of export stories promoted are gender balanced for different sizes of companies too. For example gender representation at large, medium, small and micro level of company. Disseminate information through schools and colleges – training resource

- Non-export manufacturers- Exporters focused on one or two markets only

JAMPRO and JMA

Early 2018

50,000

- A representa-tive mix of 10 manufacturing export success stories identified and developed representing companies of different sizes, gender composi-tion and export readiness levels to include a bal-ance of gender- Appropriate content utilised, e.g. videos, imag-es, slide shows, etc.

D.8

8. Target 50 MSMEs who are currently not exporting but who are willing to explore the possibilities of seizing export opportu-nities. Develop a “hand-holding” process to help them with exporting – from reg-istration to market penetration and until they are comfortable in doing it alone.

50 Manufac-turing MSMEs

JAMPROLate 2016

200,000

- 50 MSMEs enrolled and take up training by 2019- A 60% follow through success rate achieved (30 MSMEs) by 2019

D.99. Expand the mentorship programme of Export Max to target the 50 MSMEs mentioned above

50 Manufac-turing MSMEs

JAMPROEarly 2017

- 50 MSMEs enrolled and take up training by 2019- A 60% follow through success rate achieved (30 MSMEs) by 2019

D.10

10. Develop export kits for MSMEs. Kits to include:

a.Registration information / formsb.Information on export processc.Market informationd.Brochurese.Key contact details of support per-sons/agenciesf.Workbooks / training manualsg.Other suitable export materials

MSMEsJAMPRO and JMA

Early 2017

80,000- 2000 export kits developed and disseminated

D.11

3. To help manufacturers shift from high levels of foreign inputs to high levels of local content (where feasible)

11. Develop a B2B service on a suitable platform to helps suppliers and producers find each other and do business. Consider improving and reinstating and promoting JBOS


JAMPRO / JMA

Mid 2016

20,000

20,000 - B2B developed and implemented / JBOS system improved and reinstated

D.12

12. Develop a sensitisation / awareness programme and advisory service that en-courages manufacturers to increase local content in their inputs.


MIICMid 2016

75,000

- Sensitisation programme developed and launched

D.1313. Develop incentives to encourage use of local raw materials


MIICEnd 2017

50,000

- Incentives developed to encourage local use of inputs

Ref. #


Time Frame

Bud-get

(US$)


D.14

4. Manufacturers to adopt more modern and energy-ef-ficient technologies and prac-tices to increase productivity and reduce cost

14. Develop a sensitisation programme on ways to cut energy costs and adopt environmentally-friendly best practice


MIIC and Ministry of Water, Land, Environ-ment and Climate Change (MWLEC)

End 2017

50,000

- Programme developed- Energy efficien-cy and environ-mentally-friendly information disseminated to target group

D.15

15. Encourage and incentivise interna-tional producers of key manufacturing inputs to set up in the SEZs to create easy access to cheaper technological inputs, e.g. producers of energy efficient industrial air-conditioners or solar panels, etc. Any input that could be utilised to reduce long term energy costs or significantly increase productivity.

- International producers- Local manu-facturers – all levels

MIICMid – End 2018

75,000

- Incentives developed - International producers identi-fied and targeted

D.16

16. Encourage and incentivise manufac-turers to adopt greater environmental and green practices to preserve and conserve the natural resources on which the sector so heavily relies – e.g. wood for produc-tion of furniture or paper. Incentives to include:

a. Financial support for environmental certificationb. Tax breaks / concessions on the purchase of environmentally friendly products and machinery such as solar panelsc. Tax breaks for companies setting up recycling or related production

Manufacturers at all levels

MIIC and MWLEC

Early 2018

75,000- incentives developed and implemented

D.17

17. Encourage and incentivise the sector to get more involved in recycling practices to conserve resources. For example paper manufacturers could use recycled paper as a raw material instead of trees. They could either vertically integrate backward with a paper recycling company or do the recycling themselves.

Manufacturers at all levels

MIIC and MWLEC

Early 2018

-

- incentives developed to encourage recycling

D.18

18. Encourage and incentivise suppliers to adopt new technologies in keeping with international standards to improve efficiency and create greater scale econ-omies

Manufacturers – ALL levels

MIIC with support from JMA and JEA

End 2017

-- Incentives in place

D.1919. Revamp the Venture Capital Fund for the purchase of machinery for the sector. Machinery to stand as capital.



End 2017

-- Venture capital fund in place

D.20

20. Develop grants and low interest loans to encourage manufacturers to purchase and implement low-energy efficiency inputs.


MIIC / Ministry of Finance – to be funded by DBJ

End 2017

-

- Grants and low interest loans developed and implemented

D.215. Improve the levels of standards and quality of man-ufactured goods

21. For the key markets and priority prod-ucts, prepare a compendium of standards and market requirements and make available to all exporters


Bureau of Standards

End 2016

10,000

Compendium of standards in key markets for prior-ity products are developed and disseminated

D.22

22. Ensure that local standards for priority products are in line with international best practice so that exporters are compliant at the source.


Bureau of Standards

End 2016

10,000

Local standards are reviewed and brought into line with international best practice

D.2323. Improve the enforcement and moni-toring of standards at origin.


Bureau of Standards

Early 2017

40,000Enforcement strengthened

Total Light Manufacturing Budget – US $1,003,000



Mining Sector Strategy14Section 1

Mining Sector Analysis

The Mining sector is of significant importance for Jamaica and globally as a number of other industries depend on it. Jamaica’s Mining Sector comprises a variety of commercially exploitable minerals, including a wide range of limestone, bauxite, hard volcanic rocks, precious metals, marble, sand and gravel. These minerals are of major significance to Jamaica’s economic develop-ment. However, for the purpose of the National Export Strategy 2015-2019, bauxite has not been selected as a priority sub-sector within the overall Mining Sector.

Besides bauxite, limestone is the most significant mining sub-sector in Jamaica. Limestone has implications for the construction sector as it is a

key ingredient in a number of building materials – cement, concrete, ceramics, aggregate, as a raw material in glass and iron and steel production. Therefore, developments in the global construc-tion sector is of key importance to Jamaica’s lime-stone sub-sector. Finer grades of limestone are also used in products such as toothpaste, phar-maceutical products, paper, paints, plastics, rubber, etc. It is also used in agriculture as fertiliser and in feedstock. Production of the refined and industrial grades of limestone extraction and processing is already a key segment of the limestone sector.

The International Labour Organisation reported that in 2010 there were 1.5 million people employed in the mining sector in developed

Global Overview of Mining14.1

nations, and 2.2 million in developing/emerg-ing nations. In addition, artisanal and small-scale mining, the type mainly found in Jamaica, employs an estimated 25 million people worldwide, and indirectly supports more than 150 million people.

The Global Mining Sector has been growing steadily over the past 30 years. With the excep-tion of the period affected by the Global Economic Recession that started in 2008, the Global Mining

Sector has been growing at an average annual rate of 6.2% between 1985 and 2014. In addi-tion, the sector has been a bit sluggish between 2011 and 2014. The sector experienced declines at an average growth rate of negative 16%. This decline, however, is not expected to continue in the long-term as the construction and manu-facturing sectors pick up pace, driven largely by emerging and developing economies. See Figure 26 overleaf.

The global top 40 companies, which represent a vast majority of the whole industry, reported US $512 billion in revenue for 2013, indicating the significant contribution of the sector to economic growth, according to Statista.com. Figure 27 below shows that the Mining sector (represented

by the top players) has been growing at a rela-tively steady rate. However, the Global Economic Recession did have an adverse effect between 2008 and 2009. In addition, the sector has been a bit sluggish between 2011 and 2014.

Figure 26 - Global Mining Index Performance – 1985-2014


Source: Euromoney Indices, 2015

Source: Statista.com, 2015



There are a number of global trends that are creating new opportunities that Jamaica needs to monitor. On the heels of the recent Global Economic Recession (2008-2010), the world-wide economy has experienced a volatility and uncertainty that have created challenges for many sectors. Even as the global economy recovers, companies face long-term shifts. The rapid and radical transformations taking place in the global economy are largely driven by the consumer and significantly facilitated by technology.

With a strong outlook for the sector, the global mining industry is focused on future growth through expanded production to meet the grow-ing demand, particularly of many emerging econ-omies such as China and the general trend of population growth and urbanisation. Demand for raw materials, of which mining plays a significant role, as a consequence, will continue to be robust. See the diagram below, which shows the growth patterns of selected raw materials. This diagram underscores the steady growth in demand for raw materials, which has significant implications for the mining industry globally and in Jamaica.

Of particular importance in the context of the NES is the growth of the limestone sector. Global limestone consumption is projected to reach 5.7 billion metric tons by 2020, according to Global Industry Analysts. Limestone consumption growth will be driven primarily by the dynamic construc-tion sector in developed countries, the growing urbanisation of emerging economies, the steady

growth in steel production and renewed spending on public infrastructure particularly in developing countries. Growing demand for limestone in the production of cement as well as other popular commodities for every-day use such as antacids, pharmaceuticals, paper, paint, etc. bodes extremely well for the further development of the limestone sector and offers great opportunities for Jamaica.



Source: Euromoney Indices, 2015

However, satisfying demand requires finding and developing new mines, even as resource use becomes more efficient and recycling systems ramp up. Fortunately the geological supply of minerals and metals within the Earth remains robust and new technologies will help bring new deposits on stream. For instance, limestone is geologically widespread and abundant, and over-

all shortages are unlikely in the future, according to US Geological Survey 2014. But these will increasingly be located in more remote regions, raising production and investment costs, according to the International Council on Mining and Metals.

A summary of the key trends in mining are presented in the sections that follow.

The sheer size of population growth and the speed of urbanisation in many emerging markets such as India and China and other Asian coun-tries, coupled with on-going requirements in the developed world has created unprecedented demand for minerals and metals. And this growth in demand is not expected to decline any time soon. Strong demand growth comes mainly from millions of aspiring individuals in emerging econo-mies striving for a better standard of living.

Since the late twentieth century, the rise of the emerging economies, particularly China, has been phenomenal. This growth found in emerging economies is even more remarkable considering it started at close to zero only a half a century ago. Clearly a dominant driver is urban and related service infrastructure development as modernisa-tion takes place.

Urbanisation in Latin America is also of great significance for the mining sector. The construc-tion sector is booming in Latin America. The increase in construction is directly related to the urbanisation of Latin America. The rate of urban-isation in Latin America is expected to increase from around 80% today to around 90% in 2050, according to the Commonwealth Scientific and Industrial Research Organisation (CSIRO). As a consequence, construction minerals will continue in importance, in order to meet housing and infra-structure needs.

In Latin America, extraction of construction mate-rials (limestone, slate, marble, aggregate, etc.) increased at a fairly stable pace (3.5% annually) between 1970 and 2008 (CSIRO). This was much slower, however, than the increases seen in other regions with countries of recent industrialisation, Asia and the Pacific for instance.

Population Growth and Urbanisation14.2.1



Mine production has undergone important changes during the 20th century with a shift from underground to open-pit mining techniques. Early in the century, underground mining dominated in developed countries, and as mining evolved in emerging economies, open-pit mining became more common. By 2010 the majority of the indus-trial mine operations of the world were open pit.

Most productivity increases in the past century have been achieved through the ability to process

lower grade minerals through more efficient processing and the use of large-scale equipment. Thus, technological developments have made it possible to mine ores of declining grades and more complex mineralogy without increasing costs. In most cases however, the technological progress has been made by small incremental developments rather than breakthroughs into entirely new processes.

One implication of the increasing sophistica-tion of mining is the on-going need for highly skilled employees. The cyclical, long-term nature of mining has caused the industry to compete for highly skilled people at all times, even when

markets slump and activities slow down. Labour costs, related to training and attracting needed talent as well as costs linked to socio-economic adjustment occurring in emerging nations, remains a major concern across the industry.

Even with higher demand for minerals and for technologies requiring new minerals previously not in demand, most production capacity into the future will be dedicated towards the same miner-als as today – coal, bauxite, limestone, phosphate, etc., according to the International Council of

Mining and Metals. Additional metals, which are produced in small quantities, such as the ‘so-called’ rare earths, have recently attracted significant interest. These are produced in very limited quan-tities.

For reasons of geological endowment and the rela-tive inefficiencies of its mining enterprises, China has typically imported large amounts of metals and minerals from overseas. The Chinese entry into global mining has previously been constrained by barriers of culture, language, knowledge and skills deficits, political opposition and resource nationalism. However, it seems inevitable that China will in due course, overcome these draw-

backs and become an important global mining and exploration power in the medium to long-term. Moreover, for limestone in particular, China will tip the supply scale. In order to comply with grow-ing domestic demand and to preserve its natural reserves, China is expected to restrict the export of limestone in the medium term, which will in turn impact the global demand-supply balance, according to Global Industry Analysts.

Advancements in Technology

Investment in Talent to Keep Up with Technology

More of the Same

China will Tip the Scale

14.2.2

14.2.3

14.2.4

14.2.5

Another key future trend is that players later down the value chain – smelters, refiners, manu-facturers and even commodity traders will be increasing their involvement in extractive activities. This trend is already visible in the number of steel companies seeking to enter mining to secure their supplies of iron ore and coking coal at reasonable cost.

The International Council of Mining and Metals has indicated that this trend was often the case in the past, with most steel companies in the former Soviet Union, China and India operating with backward integration into both iron ore and coal

mines. While the steel sector in other countries severed these links in the name of specialisation, backward integration remained intact in many of these countries.

At the same time, the end users are fundamentally different from the extractive industry players and it will be a challenge for the two to be efficiently combined in one company. End users must focus on understanding the changing demands of its customers, while extractive mining is about doing the same thing year-in and year-out in the most cost effective manner.

Limestone is a valuable material quarried world-wide for making cement and for use in construc-tion. However, it is much less well-known that habitats found in around limestone are incredi-bly important for very rare species restricted to small areas. And that, alarmingly, quarrying impacts are increasingly threatening these understudied species.

In addition, quarrying in general destroys flora and fauna and firms operating in the mining sector

need to take action to reduce the ‘footprint’ of their activities. Jamaica already scores well on this front. Jamaica is quite unique in world mining history because, from the inception, emphasis has always been placed on the reclamation and reha-bilitation of the mined-out bauxite lands. Grass is the crop usually planted on restored lands, forest trees have also been established on restored lands, though in much smaller acreages than those established in grass. Orchard crops have also been planted as well, according to DiscoverJamaica.com.

End Users will Become Extractors

Growing Environmental Degradation

14.2.6

14.2.7



Resource nationalism has remained in the top risks facing mining companies for the past five year, which seems to be picking up pace as govern-ments seek to transfer even more value from the mining sector, according to Ernst and Young.

Many governments around the world have now gone beyond taxation in seeking a greater take from the sector, with a wave of requirements introduced such as mandated beneficiation, export levies and limits on foreign ownership.

A simple new method has been shown to remove carbon-dioxide emissions from power plant exhaust while consuming half the energy needed by the best existing carbon-capture approach. Testing of the technology, which uses cheap lime-stone-derived material to trap carbon dioxide, has been underway at two different megawatt-scale pilot plants in Spain and Germany. No commer-cial power plant today captures carbon dioxide for the purpose of stowing it away to combat climate

change. The main reason is the prohibitive cost of today’s carbon-capture technologies. Researchers are now seeking more energy-efficient, low-cost methods for carbon capture. Lime, or calcium oxide, soaks up more carbon dioxide than other solvents per unit of weight, according to the Impe-rial College of London. This has significant implica-tions for the limestone sector with the backdrop of the growing environmental consciousness that is afoot.

Resource Nationalism

New Uses Creates New Opportunities

14.2.8

14.2.9

After careful consideration and analysis the follow-ing markets presented in Table 20 below are prior-itised and are ranked in order of importance. The sheer market size, strong demand for limestone and other quarried products and market access

make the USA, Canada, the Caribbean Central and South America top markets for Jamaican mining sector. Some of the analysis was derived from the 2013 Limestone Study.

Market Assessment of the Mining Sector14.3

MarketMarket

SizeGeographic Proximity

Demand for Mining and Related Products

Ease of Market Penetration

North America(USA and Canada)

High High High Medium

Central America(Costa Rica, Panama, Nicaragua)


China High Low High Low

Caribbean(Barbados, Dominican Republic, Guyana, Trinidad and Tobago)

Medium High Medium-High High

South America(Brazil, Chile and Venezuela)


Table 20 - Mining Sector Market Assessment Matrix

The most recent market for high-valued limestone is Venezuela. In 2013, Jamaica exported 20,000 tonnes of clinker to Venezuela. The transaction was conducted under the Trade Compensation Mech-anism of the PetroCaribe Development Fund. The engagement of additional markets aligns with the aim to diversify and regain competitiveness in the Mining industry and to develop value-added prod-

ucts from limestone.

The table below presents that various priority markets according to the priority segments of the mining sector. Green denotes tier one priority markets whilst yellow signifies tier two priority markets for consideration.

Table 21Mining Sector Market Assessment Matrix by Segment


Market Limestone Aggregate and

CementsPrecious Metals

USA High High High

Canada High High Medium-High

China Medium-High Medium-High Medium-High

Costa Rica Medium Low High

Panama Medium Low Medium

Nicaragua Medium Low Medium

Barbados Medium Medium-High Medium-High

Dominican Republic Medium Medium-High Low

Guyana Low-Medium Medium Low

Belize Medium Medium-High Low

Trinidad and Tobago Medium-High Medium-High Low-Medium

Brazil High High High

Chile Medium-High Medium-High Low-Medium

Venezuela Medium-High Medium-High Low-Medium



The Mining Sector in Jamaica14.4

The most important metallic mineral for our mining and quarrying sector is bauxite, the ore from which alumina and aluminium are derived. However, Jamaica’s bauxite industry is at a mature stage and the National Export Strategy is seek-ing to focus on new growth segments within the sector. Furthermore, the downturn in the global economy since 2007 has reduced demand for alumina, leading to contraction in production and employment in the domestic bauxite and alumina industry. These circumstances have increased the importance of diversifying the sector and look-ing for growth elsewhere and not only relying on bauxite. Therefore, for the purpose of Jamaica’s 2nd National Export Strategy, bauxite and alumina are not under consideration.

On the other hand, Jamaica’s limestone resources are by far the largest mineral resources possessed by the country and the limestone segment is still young and poised for further growth and development. Limestone has the most diverse end-use structure of any industrial material and therefore possesses great potential in developing value-added products in a wide range of end-use markets.

While Jamaica possesses large resources of high-quality limestone, the levels of economic reserves of chemical, industrial, metallurgical and whiting grade limestone have not been quanti-fied. Production of most non-metallic minerals has been increasing since 2002, including limestone, gypsum, and sand and gravel.

For the purpose of the National Export Strategy the mining sector is said to comprise the following segments:

• Ores, slag (not including bauxite and alumina) and precious metals

• Limestone, salt, sulphur, aggregate, stone, gypsum, etc.

Average employment in the Mining & Quarrying industry grew by 10.8 per cent to 5,400 persons, accounting for 0.5 per cent of the average total employed labour force. This indicated that the proportion of average total employed labour force accounted for by the Mining & Quarrying indus-try increased by 0.1 percentage points relative to 2012. An average of 4,900 males, an increase of 16.7 per cent, and 500 females, a decline of 25.9 per cent, were employed in the industry in 2013 relative to 2012.

Limestone is expected to be the main driver for the sub-industry in 2015. This is due to construction work, in the hotel sector, boosting demand for cement locally. The availability of a new market for clinker in Venezuela also provides further growth prospects for limestone production. This is reflected in the number of new applications made for quarry licences. Specific market opportunities for the limestone industry in Jamaica include:

• Limestone Aggregate,

• Ground Calcium Carbonate (GCC), • Precipitated Calcium Carbonate (PCC), • Quicklime, • Additives in various kinds of building plas-

ters (e.g. thinset and grout), • Worked and non-worked monumental

stones that are cut or sawn from re-crys-tallised limestone (marble, travertine, or alabaster); and

• Enamels & glazes, and engobes.

Definition and Composition of the Sector

Limestone

14.4.1

14.4.2

The performance of mining exports from Jamaica has not been exceptional over the decade 2004 to 2013. Prior to the economic recession of 2008-2009 the sector experienced steady growth from 2004 to 2007. However, with the onset of the recession exports from the mining sector experi-enced a decline of 42% between 2007 and 2008

and a further 22% drop between 2008 and 2009. With an increase of 42% between 2009 and 2010, the sector was expected to buck the recessionary trends. However, exports remained sluggish, with an optimistic outlook as export levels increased in 2014 over 2013 by 17.5%. See Figure 29 below.

Exports from the limestone sub-sector was very sporadic and volatile over the decade 2004 to 2013. This is largely due to one-off contracts and the fact that the sector in some part is dominated

by MSMEs. More is needed to encourage growth and development of the sector, particularly as it relates to export markets.

Market Assessment of the Mining Sector14.5

Figure 29 - Value of Exports from the Jamaican Mining Sector*(USD Millions)

Source: United Nations Comtrade Statistics, 2015* Data does not include Alumina/Bauxite exports



Figure 30 - Annual Growth Rates of Exports in Limestone 2004-2013

Figure 31 - Limestone Production (‘000 Tonnes)


Source: Economic and Social Survey of Jamaica, 2013

Limestone production has generally been around an annual average of 2.1 million tonnes. Most quarries in the limestone sub-sector are currently producing below capacity (no more than 50%) according to the Limestone Study, 2013. This is as a result of low domestic demand because of the curtailed construction activity. Building construction and infrastructure developments are stated to be at an all-time low. In addition, export markets are still not fully developed with

only one company (Lydford Mining Co.) making any significant headway in terms of bulk exporting. However, this company relies heavily on one or two large clients, which puts it and the sector in a precarious and risky situation.

In addition, production is invariable on an ad-hoc, ‘as needed’ basis and very little stockpiling takes place due to limited cash flow.

SWOT Analysis14.6

• Significant quantities and excellent grade

of mineral resources, namely bauxite, lime-

stone and hard volcanic rocks.

• Strategic location to major international markets.

• On-going investment in the industry.

• Growing businesses – Some companies have

amassed a favourable amount of experi-

ence and financial resources, which are being

reinvested to facilitate further growth.

• A stable global sector

• Significant export potential, especially in

the United States, segments of South Amer-

ica and other segments of the Caribbean.

• The southern United States has an annual defi-

cit of approximately 40 million tonnes of crushed

rock for use in the construction sector.

• Large volumes of value-added mineral products,

including lime, marble and marble products (bath

tubs, face basins, counter-tops, tiles, etc.), skid

resistant aggregates, construction and decora-

tive blocks, and boulders for coastal defence.

• A growing and increasingly sophisticated

local construction sector, which uses an

array of mineral products that can be locally

produced at very competitive prices.

• Planned pet-coke and coal-fired power plants within

the Americas present opportunities for the expor-

tation of limestone for desulphurisation purposes.

• Increased quantities of limestone for soil stabi-

lisation, pollution control and the production

of more environmentally friendly products.

• Expansion and diversification of the minerals industry.

This involves an overall increase in the size of the

industry, and diversifying into sectors such as the

Metallic Minerals Sector and the Industrial Minerals

sector. Currently, the former plays no role, while the

latter plays only a marginal role in the industry.

General• High level of dependence on the Bauxite Alumina Sector.

• Over-reliance on foreign direct investment capital.

• Slow pace of modernising aging infrastructure.

• Absence of detailed non-bauxite/alumina data.

• Tardiness at rehabilitation of mined lands.

• Proliferation of illegal quarrying activities.

The Industrial Minerals Sector• Under-capitalisation of operations.

• Limited access to bulk loading port facilities.

• Large number of land-locked quarries, which contrib-

utes to high inland freight cost and the transportation

of material over long distances on public roads.

• Proliferation of small, globally unproduc-

tive and uncompetitive quarries.

• Poor public image.

• Low levels of formally trained personnel.

• The quarry zoning process is not streamlined.

• Increased imports that can be locally

produced based on liberalised sector.

• Low levels of research and product development

to spark diversification and value addition.

• Absence of institutions training mining/

minerals professionals.

• Difficulties in locally-owned entities access-

ing capital funding on terms which would

stimulate their development.

• The development of disruptive technologies and

manufacturing of substitutes in competing markets.

• The restricted ownership structure of particularly

the Bauxite and Alumina Sector, and the frequency

with which the ownership of major entities within the

sector has changed particularly since the late 1990s.

• The possible economic impacts of mergers and

take-overs by major multi-national minerals-re-

lated companies. Particular concerns relate to the

ownership, management practices and business

ethos of companies in the local minerals industry.

• More facilitating government policies and a more

engaging private sector in competing mineral producing

countries such as the Dominican Republic, The Bahamas

and Mexico, threaten growth potentials in Jamaica.

• Failure to present a consistent and organised public

relation campaign promoting the industry.

Strengths

Opportunities

Weaknesses

Threats



Section 2Mining Sector Value Chain and Strategic Plan

Mining Sector Value Chain14.7 Mining Sector Vision

Mining Sector Objectives

Mining Sector Targets

14.8.1

14.8.2

14.8.3

The vision for the Mining Sector as articulated in the Vision 2030 and validated by stake-holders at the Validation Workshop is expressed as follows:

The key objectives for the mining sector are listed below as follows:

• To strengthen the competitiveness of the mining sector

• To enhance the perception of Jamaicans,

particularly employees in the sector, of the importance of mining to the Jamaican economy

• Use land for mining in a systematically planned and sustainable manner

The main targets for the Mining sector are as follows:

• To grow the non-traditional mining sector by an annual average growth rate of 7%

between 2015 and 2019 to reach output value of US $220 million.

• •To add 500 more jobs in the non-tradi-tional mining sector

A World-Leading minerals sector, efficiently leveraging all endowments and capabilities to deliver sustained economic viability based on value-added

products, disciplined and responsible environmental stewardship, and enlightened community engagement, reinforced by an overriding commit-

ment to health and safety

14.8 Mining Sector Strategy



Mining Sector Action Plan 14.8.4There are a number of issues and challenges as expressed in the SWOT analysis above as well as in the Vision 2030 Jamaica – National Development Plan. Many of these issues are addressed in the action plan below. A number of issues, however, are crosscutting in nature, e.g. export financing, market access and trade information, capacity building, standards and quality and logistics. These are therefore accounted for under the action plans for the crosscutting areas.

Ref. #


Time Frame

Bud-get

(US$)


E.1

1. Create change in thinking regarding the opportunities in the mining sector and im-prove the image of the sector

1. Educate the public, at different levels about the sector and career and econom-ic opportunities available in mining.

Education could take place in the formal system from the secondary through to tertiary level, as well as through town hall meetings.

Students in public schools from primary to secondary levels


Sep 2017 100,000- 150 secondary schools carry programme

E.22. Implement Public Relations Programme to highlight economic value and opportu-nities of the sector

All residents of Jamaica

Min. Science, Technolo-gy, Energy and Mining (MSTEM)

End 2017

75,000

- campaign developed and implemented starting End 2017 and carry for-ward for at least 6 months

E.3

2. Revise the laws and policies governing the sector to ensure they are more effective and are being enforced to deter illegal activities

3. Establish team to review laws and make recommendations.

System should be established to support self-regulation by the industry players

Legal law-abiding operators should work closely with the law enforcers to assist in ridding the system of illegal activities.

Mining sector stakeholders

Ministry of Justice with support from MSTEM

End 2017

50,000

- Legislative review team set up- Review carried out- Recommenda-tions made- Appropriate actions taken as recommended

E.4

4. Ensure that policies and plans are developed and geared towards long-term mineral resource management and land use management, e.g. sequential land-use and the prevention of reserve sterilisation.

Mining sector stakeholders

MSTEMMid 2018

20,000Policies reviewed and revised

E.53. Improve the quality and ef-ficiency of the sector through appropriate systems

5. Beef up the entry requirements by requiring the provision of sound business plans on application for license

Implement system to ensure the provision of annual audited accounts.


JAMPROMid 2016

- systems reviewed and improved- entry require-ments improved

E.6

2. Help manufacturers to become more export-ready / enhance current export activities

6. Develop an export orientation training programme through training and net-working events as well as workshops and webinars aimed at exposing exporters to export opportunities, how to export, mar-ket intelligence and advice about export processes and systems, etc.

Firms in mining sector, particularly MSMEs

Mines and Geology Division

End 2016

30,000

- sector mon-itoring and enforcement strengthened

E.74. Build a more robust and competitive sector by provid-ing capacity building

7. Identify and target MSME in the non-metallic minerals segment of the mining sector and provide technical and financial support through training and mentoring.

MSMEs in the non-metallic segment

MGD Mid 2017 100,000

- Support provided to 15 mico and 5 small companies in the sector

Ref. #


Time Frame

Bud-get

(US$)


E.88. Amend standards to ensure re-invest-ment into the business by operators

Firms in min-ing sector – All levels

Mines and Geology Division

Bureau of Standards

Mid 2017 60,000- Standards amended

E.9

9. Help the non-metallic segment to become more organised through the de-velopment of an appropriate support body such as a Limestone Association


MGD Mid 2017 15,000

- Appropriate body established and operating on a regular basis

E.105. Ensure more formally trained individuals are in the sector

10. Commission the HEART Institute to develop a training certification programme for the industry

Employees in the sector

Heart with support fromMGD

End 2017

20,000Training certifica-tion programme developed

E.1111. Carry out a needs assessment in the mining sector to determine what skills gaps need to be filled.


MGDEnd 2017

25,000

- Needs assess-ment carried out- Recommenda-tions developed- Recommenda-tions imple-mented

E.12

12. Develop suitable courses at the tertiary level institutions to cover courses rec-ommended coming out of the skills gap assessment. Especially encourage women to take up the programmes to increase the percentage of female employees in the sector.

-Firms in min-ing sector – All levels-Employees -Students from high schools

Ministry of Education with sup-port from MGD

June 2018

30,000

Courses devel-oped based on skills gaps

At least 30% of women take up the courses

E.136. Achieve a more efficient operation of the Quarry Zon-ing process

13. Review and if necessary revise zones-Firms in min-ing sector – All levels

MGD Mid 2017 10,000

- Zones and zoning process reviewed and recommenda-tions made

E.1414. Closer monitoring of activities within zones by operators through the develop-ment of a more robust monitoring system

-Firms in min-ing sector – All levels

MGD Mid 2017 -

- Monitoring system reviewed and revised- Greater policing of operations in zones are carried out

E.1515. Ensure stricter policing to prevent the sterilisation of mineral reserves earmarked for future productive use


MGDMid 2018

50,000

- systems in place to create greater policing of the sector

E.16

7. Improve product develop-ment and product diversifica-tion through stronger market focus

16. Establish closer collaboration between the Mines and Geology Division and the Scientific Research Council to provide greater support, particularly in the areas of product development and the provision of information on markets and market opportunities


MGD, SRC with sup-port from JAMPRO

Early 2018

50,000

- market intelli-gence developed and disseminated to firms in the sector- support pro-vided to develop new products where applicable

E.17

17. Provide incentives to firms willing to expand into new product areas based on sound market intelligence and business planning

Firms in mining sector – particularly medium and large ones with the capacity and capital for expansion

MIIC with support from MGD

Mid 2017 50,000

- incentives developed to en-courage product development



Ref. #


Time Frame

Bud-get

(US$)


E.1818. Encourage, support and incentivise mineral exploration and exploitation in the non-metallic segment


MSTEM and MIIC

End 2017

100,000

- Support struc-ture in place- Incentives developed and implemented

E.198. Improve the logistics from the sector

19. Improve the bulk-handling port and loading facilities to accommodate non-metallic minerals exports

Firms in mining sector – particularly MSME and non-metalic

MIIC with support from MSTEM / MGD

Mid 2018

1.5m

- bulk-han-dling port and loading facilities improved

E.209. Improve the sectors con-tribution to the nation’s social and environmental wellbeing

20. Encourage and incentivise mining firms to improve their contribution to Corporate Social Responsibility such as awards, etc.

Communities and the envi-ronment

MSTEMEnd 2017

10,000Incentives devel-oped

E.21

21. Further incentivise (reward and police) mining firms to take a more stringent approach to rehabilitation of mined-out lands

Firms in min-ing sector – all levels

MSTEMMid 2018

10,000Incentives devel-oped

Total budget for the Mining Sector is – US $2,355,000.00

Part3Crosscutting Areas

Crosscutting Areas Crosscutting Areas Crosscutting Areas Crosscutting Areas Crosscutting Areas Crosscutting Areas Crosscutting Areas Crosscutting Areas Crosscutti

Crosscutting Areas Crosscutting Areas Crosscutting Areas Crosscutting Areas Crosscutting Areas Crosscutting Areas Crosscutting Areas Crosscutting Areas Crosscutti


Part 3 – Crosscutting Areas Part 3 – Crosscutting Areas

Export Financing 15Finance represents the major catalyst for effective trade execution. It spans the entire value chain: from product development to assembling, pack-aging and down to logistics. In order to strengthen an industry’s or sector’s competitiveness, ensure fair trade and reasonable access to markets across the board, an effective trade finance infrastructure is needed to support the entire value chain. The availability of cash, credit, investments and other financial assets is a prerequisite for effective trade.

In Jamaica, the economy suffers from a thriv-ing informal sector characterised by a number of micro and small enterprises, which increases the risks to financial institutions when extending finance. To mitigate such risks, these institutions not only restrict the flow of cash to a few companies, but also increase the risk premium on the cost of capital. Flexible and internationally recognised financial instruments that aid trade (letters of credit, structured commodity finance, invoice discounting, credit insurance, capital markets, hedging, etc.) are either non-existent, relatively new, not well understood by the private sector

or generally ignored because of the relatively high costs and time associated with securing them. In addition, many financial institutions exhibit a culture of risk aversion and do not seem willing to adopt change in a rapid manner. For example, in late 2014, new legislation was passed allowing banks to extend short-term credit using invoices as collateral (invoice discounting). Since the law has been passed some firms have expressed that they are still being turned away by banks as there seems to be a slow rate of adoption of the new law on the parts of commercial banks. In addi-tion, some banks express that in order to properly manage risks they also have to consider other loan requirements, some firms do not meet all stipula-tions and are therefore turned away.

The establishment of a transaction framework to utilise movable assets as a source of collateral is key as it is a step in the right direction of achieving higher levels of non-traditional forms of financing. However, the wider financial services sector does not appear to have fully embraced this initiative. The apparent slow / non-acceptance of this initia-

tive is largely due to the risk averse ‘mind set’ of the sector.

The risk-averse nature of financial services has also adversely affected the MSME’s ability to access financing. Considering that a large number of MSMEs are female run and compounded by an exceptionally high level of unemployment among women, this does not augur well for development of women entrepreneurs in Jamaica. The voucher system being offered by the JBDC is an excellent start. However, financial institutions need to make a 360º turn around.

The current risk-averse environment within the Financial Services sector is an issue that needs

to be addressed at a high level by government if the Financial Services sector is to take its place as a key enabler of private sector development. Some of the recent initiatives under the Compete Caribbean interventions speak to this. However, more could be considered around incentivising the Financial Services sector to adjust how it cali-brates risk for business activity in some of these key prioritised sectors under the NES 2015-2019 and the Vision 2030. The government and Central Bank can play a key role by developing a progres-sive environment and by providing appropriate incentives to encourage financial institutions to be more open to offering financial services, particu-larly to the MSMEs.

Export Financing Support Organisations15.1

The National Export-Import Bank of Jamaica (EXIM Bank) is Jamaica’s principal trade financing institution and the Caribbean’s first Export-Import Bank. It plays a fundamental role in national devel-opment by providing a wide range of financing instruments for the country’s productive sector. It aims to assist in the growth of this sector and to contribute to the development of the wider national economy.

The Bank was established in May 1986 and its mandate is to help business ventures become viable and competitive in international markets. Specific focus is placed on MSME entities involved in non-traditional exports, such as Tourism, Manu-facturing, Agro-processing, Mining, the Service Industry, Information Communication and Tech-nology and the Creative Industries.

It is particularly known for its trade financing facil-ities and specifically its international lines of credit,

which enable Jamaican companies to do business with any country in the world. Its products and services aim to fulfill both the short and medi-um-term needs of its customers and the facili-ties are available in both Jamaican and US-Dollar denominated currencies.

The Bank also recognises that linkage service companies that are connected to exporting and manufacturing entities play a vital role in the growth of these sectors, so they are also included in the Bank’s group of qualified borrowers. These include farmers who provide fresh produce to agro-processors; professionals such as Haulage Contractors, Mechanical and Electrical Engineers who support the bauxite industry; Tourism link-age companies such as operators of attractions, in-bond merchants and persons providing ground transportation services, as well as companies in the service industry.

The National Export-Import Bank of Jamaica15.1.1



The Development Bank of Jamaica Limited (DBJ) is a corporation that is wholly owned by the Govern-ment of Jamaica. And although it is not specifically focused on export financing, its mandate to foster economic growth and development of strategic sectors of the Jamaican economy encompasses support to export business.

The DBJ’s aim is to facilitate the growth and devel-opment of all viable enterprises in the productive sectors of the Jamaican economy. These sectors include agriculture and agri-processing, manufac-turing, information technology, mining and quarry-ing, energy, services and tourism.

In fulfilling its mandate, the Bank provides the following services:

• Appropriate medium and long-term financing solutions [through alliances with Approved Financial Institutions (AFI) and other financiers] in a timely and efficient manner and at attractive interest rates to all entities, but with an emphasis on small and medium-sized enterprises.

• Direct lending for large projects in stra-tegic areas.

• Management and privatisation of national assets and investments.

The DBJ utilises its own resources and borrows funds from external financial institutions for on-lending through its network of AFI partners. AFIs include commercial and merchant banks, credit unions, and the National People’s Co-oper-ative Bank of Jamaica Limited, among others.

One of the key tools to help MSMEs gain access to financing is the Voucher for Technical Assistance (VTA). The Voucher for Technical Assistance (VTA) aims to assist micro, small and medium-sized enter-prises (MSME) in strengthening their managerial and administrative abilities to improve their cred-itworthiness. MSMEs have significant structural problems which have made it difficult for them to access financing. The purpose of the voucher is to address these structural problems.

In addition, the DBJ has lent over $2 billion to micro finance institutions (MFI) since the Micro Finance Window was established in 2009. The Bank is cognizant of the role that micro, small and medium-sized enterprises (MSMEs) contribute to the development and stimulation of the Jamaican economy and continues to provide wholesale funding to eight MFIs for on-lending to entrepre-neurs.

The Development Bank of Jamaica15.1.2

Another key source of export financing or busi-ness financing in general, is the microfinance sector. However, the microfinance sector “remains under-developed and is composed of a small number of non-regulated non-governmental organisa-tions (NGOs), along with credit unions (CUs), which have only recently come under regulatory scrutiny, and a few private companies and banks that offer micro-credit” according to the Econo-mist Intelligence Unit’s Global Microscope on the Microfinance Business Environment 2013. Jamaica ranked 42nd out of the 55 countries covered in that report.

The sector has taken the first steps in organising itself and the government of Jamaica is keen on strengthening the sector. There are two associa-tions currently: Jamaica Micro Financing Associa-tion (JaMFA) and Jamaica Association for Micro Financing (JAMFIN). The establishment of these associations is timely as the Government of Jamaica seeks to regulate the sector through the proposed Micro Credit Act.

Generally microfinance institutions are more flex-ible in extending loans to SME. The organisation and regulation of the sector will bode well for export financing, particularly for SMEs.

The Jamaica Stock Exchange (JSE) launched its Junior Market on April 1, 2009, which was estab-lished in order to encourage and promote invest-ment in Jamaica’s entrepreneurship, employment and economic development and by extension, exports.

The Junior Market allows investors to put capital into legitimate small and medium sized compa-nies (SMEs) whose shares trade on a special JSE platform. This represents an exciting opportunity for SMEs to raise capital, and to contribute to the growth and development of the Jamaican econ-omy and to enter into the export business.

As a general rule, the Junior Market was devel-oped to attract new capital and to encourage new start-ups. Junior Market companies will act as the vehicle through which support and resources can be obtained from investors.

At the end of 2014, the Junior Stock Exchange Market index declined by 9.2 per cent to 687.96 compared with 757.9 for 2013. The decline was spurred by a drop in the average price. Despite the decrease in the index, the number of shares traded (591 million) and the value of transactions ($2.1 billion) increased by 25 per cent and 53 per cent, respectively.

Other Financial Institutions

The Junior Stock Market of the Jamaica Stock Exchange

15.1.3

15.1.4



From its most recent credit conditions survey, the Bank of Jamaica (BOJ) indicated that the distribu-tion of credit to the SME sector advanced to 37% for the third quarter of 2014, compared to 28% in the second quarter.

The micro sector, which previously registered no more than one per cent of all loans for each quar-ter since the start of the BOJ survey in December 2013, accounted for three per cent of the distribu-tions for the third quarter of 2014. BOJ’s quarterly monetary policy report for the December 2014 quarter also indicated a migration of loan activity to the SME sector. The BOJ linked the renewal of interest to announced initiatives to improve lend-ing to the SME sector.

New government policy now facilitates new financing options and expands the categories of acceptable collateral beyond the traditional

to include receivables and inventory, as well as personal property.

Local banks are among the conduits for a special line of credit to small and medium-sized entities principally engaged in agriculture, agro-process-ing, manufacturing, manufacturing services, trading or work-study. The JM $1.5-billion facility, which is in its second iteration, will close in April 2018. It is backed by the National Insurance Fund and administered by the Development Bank of Jamaica (DBJ).

The central bank classifies micro companies as those with annual sales or turnover of less than US$100,000 annually, and assigned loans of less than US$10,000; and small businesses as having turnover of US$100,000 to US$5 million, and access loans of US$10,000 to US$100,000.

Jamaica’s National Aid for Trade (AfT) Strategy articulates trade-related priorities and proposes a tool for seeking aid and investment. This ensures focused access to and utilisation of prospective resources by identifying key technical assistance gaps, including activities that complement similar regional initiatives. Consistent with the evolving international framework of Aid for Trade, Jamaica’s approach is grounded on the premise that techni-cal and financial resources should be sought and deployed to strengthen the trade sector through export expansion and diversification. Crucial to the accomplishment of this aim is the fostering of strong dialogue with international development partners (IDPs) and investors (both local and foreign).

Given the tight fiscal space and the stringent steps being taken by the government to bolster the economy the need for Aid for Trade is appar-ent. In addition, targeted support for long-term

initiatives such as loan financing to upgrade plant, equipment and technology for key sectors such as mining as well as for physical infrastructure are supported through the Aid for Trade system. The Government of Jamaica sees Aid for Trade as an important initiative, to enhance export capacity and improve competitiveness.

The Aid for Trade Initiative was launched in 2005, as a result of an agreement between World Trade Organisation members to help develop-ing countries use trade as an engine for growth and poverty reduction. The Aid-for-Trade Initiative helps developing countries build the production capacity and trade-related infrastructure needed to implement and benefit from trade agreements and to expand their trade. It also supports the implementation of trade facilitation measures and the improvement of trade standards, according to the Inter-American Development Bank.

Lending to SMEs

Aid for Trade

15.1.5

15.1.6

The key strategic issues under the current National Export Strategy have not changed significantly since the previous National Export Strategy 2009-2013. These are articulated as follows:

• High Public Debt adversely affects invest-ment and productivity by distorting the allocation of investment toward less productive areas; and reducing the scope for public sector investment.

• The higher cost of capital in Jamaica rela-tive to its trading partners is in part a result of public borrowing, which has pushed up interest rates. Consequently, firms have found it difficult to borrow at prevailing interest rates to invest in new technology and equipment that would have increased and sustained productivity growth.

• Unavailability of funding• Inability to access funds• Inflexible collateral requirement• Inability in finding investors for businesses

needing it• Inability of enterprises to provide quality

plans and proposals supported by financial statements

• Poor or absent financial record-keeping,• Inflexibility by the retail banking agencies,• Funds are not being allocated to the enter-

prises with the greatest potential to engage in value added activities and to create jobs.

• Computers and software not viewed as collateral by funding agencies

• IP rights not considered to have commer-cial value

• There are no industry figures to prove an attractive return on investment

• Government crowding out funding oppor-tunities because of issuance of government paper that is absorbing liquidity in the financial market.

• Large percentage of entrepreneurs over 60 who are not able to access financing because of age

• Financial services sector does not truly appreciate or understand the productive sectors and the day-to-day of business.

Key Strategic Issues of Export Financing15.2

Export Financing Strategy15.3

To build robust financial services to adequately support the development of a competitive ex-port-driven economy

1. To improve the private sector’s access to finance.

2. To facilitate the provision of medium and long term financing for development projects.

3. To facilitate financing for exports and to facil-itate imports to be used as key raw materials in the targeted sectors.

4. To finance investments for capital equipment in the export sector

5. To strengthen the framework for financial risk management in the private sector

6. To attract more investments in the export sectors

Export Financing Vision

Export Financing Objectives

15.3.1

15.3.2



Ref. #


Time Frame

Budget (US$)

Objectively Veri-fiable Indicators

F.1

1. To move away from the traditional form of lending (Fa-cilitate the ease of doing busi-ness by encouraging more flexibility in offering loans and other financial services)

1. Expand the Financial Guarantee Sys-tem being implemented by the DBJ to include MSMEs – Government (Ministry of Finance, Central Bank, DBJ) to partner with MSMEs to come up with solutions, e.g. Provide guarantee to a percentage of loans being requested by MSME through all financial institutions

MSMEs

Ministry of Finance (MOF), DBJ, JBDC, ExIm bank, JBA

End 2016

To be funded by the DBJ

- Guarantee system expanded to include MSMEs - 7% of all business loans are made up by MSMEs by 2019 (cur-rently at 3% according to the BOJ).

F.2

2. To create awareness of incentives and loans available to assist the productive sector such as the DBJ Voucher Pro-gramme that many MSMEs are not aware of. DBJ to launch an integrated commu-nication campaign about their loans & products in September 2015)

MSMEsDBJ, JBDC, JEA, JMA, JCC, MIIC

End 2015

60,000- awareness pro-gramme initiated

F.3

3.Government to provide appropriate incentives to the financial services sector to encourage a more open approach to financing, especially to MSME s. These could include for example, the loan guar-antee system (as in 1 above); implemen-tation of regulations ‘forcing’ banks to take desired actions; a Funding for Lending Scheme (government funding for every dollar lent to small businesses (a required ratio to be developed e.g. $5 of funding for every $1 loaned – this system has been recently adopted by the UK government).

Financial Institu-tions

MOFEnd 2016

70,000

- A study of possible impacts of different inventive schemes with appropriate recommendations- Incentives devel-oped and launched and promoted

F.4

4. Investigate (with a view to implemen-tation) the possibility of passing legislation to allow Intellectual Property to be used as collateral across the financial services sector and not just EXIM Bank (a growing trend in the financial services sector)

The Creative Industries

MOF, JIPO, DBJ, EXIM Bank

Mid 2018

50,000

- IP collateralisation study launched- IP collateralisation legislation drafted for official review, approv-al and implementation- IP collateralisation adopted by the finan-cial services sector

F.5

2. Develop / strengthen export financing programmes and facilitate the access to these programmes

5. Review and assess the impact of exist-ing incentives and financing programmes with a view to improving the effectiveness, efficiency and reach of these programmes and to bridging gaps identified. Some aspects of the review have already been undertaken through the Omnibus Tax Incentives Act and the SEZ Policy being developed and a review planned by the DBJ. The review will be complimentary to these initiatives. A focus on exporters and SMEs is recommended.

Exporters and SMEs

MIIC / MOF, DBJ, JBDC, ExIm bank, JBA

June 2017

55,000

- review carried out- Top 3 priority gaps identified - recommendations made (timeline to be determined based on the solutions recom-mended)- An implementation plan developed and executed- calculate a return on investment (ROI) baseline (for each priority sector and for the SME sector) from the study to measure progress moving for-ward. This data does not currently exist.

F.66. Create greater awareness of export financing programmes through an appro-priate awareness and education campaign

Exporters, particularly MSMEs

MIIC, MoFP, DBJ, JBDC, ExIm bank, JBA, JEA and JMA

Dec 2018

65,000- awareness pro-gramme implemented

Export Financing Action Plan15.3.3

Ref. #


Time Frame

Budget (US$)


F.7

7. Create specialised financial programmes to target persons/entities with difficulties in accessing traditional financing, particu-larly MSMEs and entrepreneurs over 60

MSMEs and business owners over age 60

MOF with support from JBDC, DBJ, ExIm bank, JBA

Mid 2017

45,000

- MSME financing pro-grammes developed- 60+ financing pro-grammes developed

F.8

8. Promote customer financing – devel-op relationship with customer to fund production. Customers to pay in advance before production is complete, e.g. Grace Kennedy provides financing to farmers for the purchase of seeds for growing the final products they will eventually supply to Grace.

Custom-ers and suppliers

Private sector, PSOJ

Mid 2017

-- customer financ-ing developed and promoted

F.93. Create a more flexible finan-cial services sector

9. Get buy-in from MIIC/MOF/Central Bank to create progressive policies/regulations for the financial services sector

Support agencies to Finan-cial Sector

MOFEnd 2017

30,000

- Regulations re-viewed and revised accordingly- New regulations developed and imple-mented

F.1010. To develop non-fiscal incentives to support the adoption of new regulations and programmes being developed

Financial services sector

MOF, BOJMarch 2018

30,000- Non-fiscal incentives developed and imple-mented

F.114. Build capacity among MS-MEs in getting greater access to financing

11. To expand and optimise support/ca-pacity building to MSMEs (e.g. Export Max) to assist them to become more qualified to access financing, e.g. Business planning, record keeping, research and develop-ment, product development, business operations, standards and quality, etc. through training programmes, seminars, workshops, etc.

MSMEs

JBDC with support from JAM-PRO / JEA / JMA

Mid 2016

120,000

- capacity building programme devel-oped/expanded and implemented- Increase the number of capacity building programmes and expand their scope- Make existing programmes more efficient- Increase the number of exporters who access these pro-grammes (80 MSMEs targeted)

F.125. Attract export-focused in-vestments and funding (local and foreign)

12. Identify a pool of investors and make them known to businesses

Investors and Ex-porters

JAMPROMid 2017

15,000- Pool of investors identified

F.13

13. Developing opportunities for investors and suppliers to enter into negotiations – such as speed networking events at least twice per year


JAMPRO

Sep-tember 2017 (first event to start)

50,000

- events take place twice per year with first event starting in Sep. 2017

F.1414. Develop a cluster funding system through cooperatives to make venture capital more attractive to investors


DBJ, JAM-PRO

Mid 2017

20,000- cluster funding system developed



Ref. #


Time Frame

Budget (US$)


F.1515. Educate suppliers to the benefits of approaching investors as a cooperative

Exporters (particular-ly MSMEs)

JAMPRO, JBDC

Mid 2017

20,000- education pro-gramme developed and implemented

F.16

16. Create innovative avenues for export-ers to present their business proposals to investors – a programme similar to Shark Tank – to create an excitement around the idea of venture capital (E.g. The Innovators - Yanique Page)


JAMPRO, JBDC, DBJ

Mid 2018

200,000- Suitable programme developed and imple-mented

F.1717. Expand, optimise and further promote the www.findMSMEfinancing.com.jm website managed by the DBJ

Exporters (particular-ly MSMEs)

DBJ, JAMPRO, JBDC, EXIM, BOJ, PSOJ, JEA

June 2016

20,000- Website expand-ed, optimised and promoted

The total budget for Export Financing is US $850,000.00(mainly administrative and implementing costs). Logistics and Trade Facilitation16

In today’s globalised world, making cross-border trade easier is increasingly critical for the economic and competitive success of a country. Excessive bureaucratic procedures, burdensome customs requirements, inefficient port operations and inadequate transportation and port infrastructure all lead to extra costs and delays for exporters, stifling trade potential. It is in this context that trade facilitation becomes key.

Logistics forms a critical component of trade facil-itation and can be described as “simplifying and standardizing the commercial activities involved in the movement of goods and information across borders from seller to buyer”. Logistics actually involves activities and processes carried out by Ports and Airport Authorities, Customs, Freight Forwarders, Pre-Shipment Inspection Agencies, Government Departments and even financial service providers and information communica-tions technology (ICT) providers.

Logistics is an important enabling sector for the growth and competitiveness of Jamaican export-ers, for without efficient transportation to air, land and sea ports, the sector will be at a considerable disadvantage. Logistics, therefore, is the lifeblood of exporters.

Logistics processes invariably affect export trade transaction costs. The Doing Business Reports compiled by the World Bank / IFC is a series of annual reports that investigates regulations and processes that enhance and constrain business activities across 183 economies globally and pres-ents quantitative indicators on them. The Doing Business 2015 report highlights a study, which showed that high transaction costs affect the trade performance of ACP countries negotiating EPA’s with the European Union. Using data from 167 countries, the study found that every $1 reduction in trade costs could increase exports by $1,000. The research also showed that exporters in developing countries gain more from a 10% drop in their trading costs than from a similar reduction



in the tariffs applied to their products in global markets (Doing Business Report 2015).

Consider that exporting a standard container of goods from Jamaica requires 6 documents, takes an average of 20.0 days and costs from $1,580.00

and sometimes more. (See Table 22 below). The costs in time and money can be daunting, particu-larly for MSMEs and discouraging for those seek-ing to export for the first time.

In 2015, Jamaica stood at position 115 out of 189 economies on the ease of trading across borders with a rating of 68.22, which lags behind the 72.47 regional average (Latin America and Caribbean). In 2014, the World Bank’s Logistics Performance Index (LPI) ranked Jamaica in the 70th position (up from 124 in 2012), which is a significant improve-ment of the country.

The improvement in Jamaica’s logistics ranking can be attributable a number of recent developments. Recently, there have been reforms to the process-ing and handling of customs documentation. The introduction of ASYCUDA++ in 2014/2015,

which is a specialised customs software that elec-tronically captures all customs import and export declarations and transactions, is one such reform and modernisation of customs procedures and a step in the right direction for Jamaica. Another development is the reduced time to import by allowing customs entries to be lodged at night. The most important development is the Logistics Hub Initiative, which is another progressive move by the Government of Jamaica to improve trade facilitation and consequently increase compet-itiveness. The Logistics Hub Initiative is further explained below.

cont’d

Stages to export Time (days) Cost (US$)

Customs clearance and inspections 4 235

Documents preparation 10 450

Inland transportation and handling 3 400

Ports and terminal handling 3 495

Totals 20 1,580

Table 22The Cost of Exporting from Jamaica (Time and Money) The Logistics Hub Initiative16.1

Building on existing air, sea and land-based resources, the Government of Jamaica is devel-oping a Master Plan for a Logistics Hub Initiative (LHI) that will comprise:

a. Expanded port resourcesb. A dry dock facilityc. A Port Community Systemd. A new air cargo facility and expansion of

existing onese. A Logistics Centref. Warehousing, assembly and light manufac-

turing facilities in Special Economic Zones (SEZ)

g. A road-rail ground transport system between the port, airport, and SEZs.

The Government of Jamaica has appointed a Logistics Hub Task Force to lead the establishment of the Hub. To facilitate the establishment of the Logistics Hub, government agencies are working to reduce the paperwork and improve the speed of moving goods through the ports seamlessly.

Jamaica’s Logistics Hub is expected to be the fourth global logistics node, joining Singapore, Dubai and Rotterdam. It will establish the coun-try as a significant player in the global shipping and logistics industry, and potential investors and business interests will find themselves in striking distance of a market of 800 million people includ-

ing North America and Brazil. The Logistics Hub will be perfectly positioned to receive Post-Pan-amax ships travelling from the Asia-Pacific region, as these vessels will now have a direct shipping lane from the Pacific Ocean to the Atlantic Ocean (Eastern Seaboard and South Atlantic). Jamaica will have greater opportunity to handle increased volumes of transhipped cargo and the proposed development of an economic zone will facilitate the expansion of the country’s manufacturing sector. Companies will be more inclined to locate their operations in Jamaica to take advantage of the more efficient shipping route to the Ameri-cas, which will be created by the expansion of the Canal.

According to the Ministry of Industry, Investment and Commerce (MIIC), the Logistics Hub, as the centrepiece of the Government’s growth strategy, is expected to transform the Jamaican economy, create jobs and further integrate Jamaica into the global value chain. In so doing, Jamaica will become more deeply integrated into global value chains.

The Logistics Hub Initiative is expected to create the conditions for attracting global businesses, thereby facilitating and promoting the seamless access of Jamaican products and services to global markets.



Importance of the Logistics Hub in driving Exporters’ competitiveness

16.2

Establishment of the Logistics Hub will allow the country to take advantage of the anticipated increase in trade activities in the region as a result of the expansion of the Panama Canal, scheduled for completion by 2015 and indeed the full open-ing of Cuba to US trade.

Aimed at being the fourth global node, this Logis-tics Hub Initiative is a very forward-looking initia-tive that promises both to improve the export logistics for Jamaican exporters as well as provide a sound base for suppliers wishing to tranship, manufacture and generally take advantage of a Jamaica’s Global Hub. The Global Hub will deliver :

a. Improved rail, sea, air and road transporta-tion

b. Improved trade facilitation at all levels – customs, immigration, storage and ware-housing (including bonded warehousing) and

c. New economic and investment oppor-tunities through the establishment of fully duty-free and locally accessible outputs of Special Economic Zones

d. Work of Government agencies to reduce the paperwork and improve the speed of moving goods through the ports seam-lessly.

Special Economic Zones16.3

Complementing the Logistical Hub Initiative is the development of Special Economic Zones. A Special Economic Zone is geographical region that has economic and other laws that are more free-market-oriented than a country’s typical or national laws.

SEZs are planned to be constructed across the island over time, and these will attract major trans-national manufacturing and distribution compa-nies, that will set up business in the zones, thereby creating additional employment for Jamaicans. The strategy to be used in the SEZs is the creation of industrial clusters, that involves the coming

together of business entities within the zones. This strategy will greatly benefit the Micro, Small and Medium-size Enterprise (MSME) sector, which will be able to capitalise on the opportunities for link-ages with larger global enterprises.

The World Bank’s Logistics Performance Index (LPI) Report also speaks to the rising importance of green solutions - that could have implications for the proposed development of the Goat Islands and the larger Portland Bight area. “Environmental sustainability concerns are emerging as a market driver,” the report states. “Developing countries will need to consider the environmental

Key Supply Chain Management Initiative and the SEZs

Key Strategic Issues of Logistics

16.4

16.5

Complementing the Logistical Hub Initiative is the development of Special Economic Zones. A Special Economic Zone is geographical region that has economic and other laws that are more free-market-oriented than a country’s typical or national laws.

SEZs are planned to be constructed across the island over time, and these will attract major trans-national manufacturing and distribution compa-nies, that will set up business in the zones, thereby creating additional employment for Jamaicans. The strategy to be used in the SEZs is the creation of industrial clusters, that involves the coming

together of business entities within the zones. This strategy will greatly benefit the Micro, Small and Medium-size Enterprise (MSME) sector, which will be able to capitalise on the opportunities for link-ages with larger global enterprises.

The World Bank’s Logistics Performance Index (LPI) Report also speaks to the rising importance of green solutions - that could have implications for the proposed development of the Goat Islands and the larger Portland Bight area. “Environmental sustainability concerns are emerging as a market driver,” the report states. “Developing countries will need to consider the environmental

• Jamaica is still considered as lacking competitiveness is current logistics procedures and infrastructure

• Lack of complete and widespread elec-tronic processing mechanism for all transactions

• Long processing times

• Numerous document requirements for export

• Lack of a single clearing facility

• The lengthy export registration process

• High container costs

• Weak exporter competency related to export logistics and related procedures.

• Limited specialised storage facilities at the ports and airports for exports of perishable goods.

• Some cargo handling facilities at the port and airport are in need of upgrading

• High costs associated with pre-shipment inspections and container scanning



Key Strategic Issues of Export Financing16.6

Vision

Objectives

16.6.1

16.6.2

The vision for export logistics in Jamaica is articulated as follows:

The key objectives of the strategy are listed as follows:

1. To reduce the costs and time taken for export transactions

2. To improve the management and opera-tions of logistics in the export sector

3. To develop professional and efficient freight forwarding services

4. To facilitate the efficient transportation of export commodities from the port areas

5. To adopt alternative and modern distribu-tion means such as the Internet

Creating a Logistics-centred economy for greater trade competitiveness

Ref. #


Time Frame

Budget (US$)

Objectively Verifiable Indi-

cators

G.11. Increase Air Capacity- bal-ance volume with space available.

1. Develop a system to allow Freight Forwarders to consolidate & coop-erate. Develop a system for exporters to pool information so volume needs can be established and provided for within the freight forwarder system.

Freight forward-ers and exporters

MIIC, TBL, MTWH, MoAF, MSTEM

End 2016

20,000- Consolidation sys-tem developed

G.22. Provision of Cold Storage at export points.

2. Extend the opening hours, 6 am to midnight or 24 hour (ties in with encouraging trucking during off peak traffic hours). Encourage related services to keep the same hours, so all of the exporters activities and be executed at the same time.

Export/trade facilitation organisa-tions

MIIC, MoAF

Mid 2016 -

- Cold storage operat-ing hours extended- Synergy in opening hours of all related port services encour-aged and realised

Logistics Action Plan16.6.3

Ref. #


Time Frame

Budget (US$)


cators

G.3 3. Reduce Air Freight Costs.

3. Implement a system to allow exporters and Freight Forwarders to cooperate in order to consolidate and negotiate for better rates. More volume, better rates. Consolidation out of Montego Bay to be explored as well. An appropriate e-system to be explored to include exporter to export-er, exporter to freight forwarder and freight forwarder to freight forwarder communication and cooperation.

Export-ers and Freight Forward-ers

MIIC, TBL, MTWH, MoAF, MSTEM

End 2016

20,000- System developed and implemented

G.4

4. Improve the quality and efficiency of transportation networks from source to warehouse to port and beyond

4. Establish a trans Jamaica trucking service and have it bonded where necessary.


MIIC, MTWH), MoAF

Mid 2018 200,000- trans trucking ser-vice developed and implemented

G.55. Fix major road networks, improve road conditions


MTWH Mid 2019 2,000,000- Identified roads fixed

G.6

6. Promote trucking in off peak traffic times by giving Toll concessions on highways. Possibly from 10 a.m - 2 p.m. & 8 p.m. to 6 a.m.


MIIC / MTWH/MoAF

Mid 2016 -- Off-peak trucking promoted and incen-tivised

G.77. Revisit the ferry service between Kingston, Portmore and Old Harbour during peak commuter times.


MIIC / MTWH/MoAF

End 2018

500,000- Ferry system re-in-troduced

G.8

8. Investigate the possibility of a cost effective Rail transport system which would alleviate some of the road congestion.

Exporters MIIC / MTWH

End 2017 60,000

- Cost effective Rail transport system investigated and recommendations made

G.95. Improve the quality and efficiency of shipping routes

9. Expand shipping routes to include not just the Eastern Seaboard of the USA but to Canada, the UK & Europe, as well as the Caribbean and South America.

ExportersMIIC/MTWH

End 2017 175,000

- New Shipping routes identified.- Shipping routes expanded

G.1010. Develop Pre-Clearance for Cus-toms for the USA

CustomsMIIC / MoFP

Mid 2019 250,000- US pre-clearance developed and imple-mented

G.1111. Have forms and declarations avail-able online, and exporters to be able to submit them on line.

ExportersMIIC / TBL / Customs/ MoAF

Mid 2016 5,000- All forms and dec-laration document available online

G.1212. Set up a clearing-house for infor-mation for all exporters, possibly under the NES umbrella.

Exporters MIIC/TBLEnd 2016

15,000- Clearing house developed



Ref. #


Time Frame

Budget (US$)


cators

G.13

13. Identify software/online solution so exporters can request space for air or sea freight with date /time/ goods information, etc. and a freight forward-er can bid on the job.

Exporters

MIIC, TBL, MTWH, Shipping Associ-ation of Jamaica,

End 2016

5,000- Software solution identified and imple-mented

G.14

14. Train & Educate Freight Forwarders on all of the rules & requirements for exporting goods of all kinds, including hazardous materials to the different countries.

Freight Forward-ers

TBL, HEART Trust NTA, MTWH, MIIC

1st quarter 2017

20,000- Training programme developed and imple-mented

G.15 15. Develop order fulfillment centres. Exporters TBL1st quarter 2017

-- Order fulfillment centres developed

G.1616. Increase policing and control at ports to Reduce shipment contami-nants (e.g. fruit flies, contraband, etc.)

Customs / exporters

MIIC / Customs/MNS

Mid 2016 60,000- Policing and control increased

G.176. Make companies e-com-merce ready

17. Assess the state of e-commerce readiness of the export players

ExportersJAMPRO, MSTEM

Mid 2016 20,000- E-commerce needs assessment carried out

G.1818. Identify the goods to be exported via the Internet

ExportersJAMPRO / JEA

Mid 2016 15,000- Goods to be exported via the Internet identified

G.19

19. Increase the awareness of suppliers of the e-commerce opportunities for their business and provide case studies of companies which have been suc-cessful in e-commerce

ExportersJAMPRO, MSTEM

Mid 2016 35,000

- Awareness / training carried out- Success stories identified, developed and disseminated

G.20

20. Identify suppliers which could deliver e-commerce solutions and make their services available to export companies

ExportersJEA, MSTEM

Mid 2016 5,000-e-Commerce suppli-ers identified

G.2121. Negotiate, as a group, preferred transportation rates with key courier providers such as DHL and Fed Ex

Exporters JEA Mid 2016 5,000

- Negotiations carried out- Preferred rates obtained

G.2222. Assist 20 companies in becoming e-commerce ready within a one year period

ExportersJAMPRO / JEA

Mid-End 2016

56,000

- 20 exporters iden-tified- 20 exporters be-come e-commerce ready

Total Budget for Logistics is US $3,466,000.00

Market Access and Trade Information17

The availability of credible and current information and data is important for the facilitation of trade in an economy as it helps in making informed decisions. For both the public and private sectors, access to trade information opens windows to identifying market opportunities, developing link-ages in export markets, and promoting trade. However, trade information is not always read-ily available in Jamaica. Even in the development of the National Export Strategy, one of the key challenges encountered was finding relevant and up-to-date information. While data is available on a number of sectors, it is predominantly domestic focused. Overall market intelligence needs to be strengthened. In addition, where market and trade information is available, it is either not prepared in

a manner that is easily understood by the aver-age person or the information is not adequately disseminated to those most in need. This is not to say that some areas are not up to standard. In consultations with stakeholders, this area was an issue that they considered of critical importance for the development of the export sector.

In addition, the global economy and international markets are changing rapidly and radically. These changes are driven largely by the consumers who are also changing – demographically, geographically and psychographically . However, Jamaica cannot compete internationally if it is not up-to-date with key international trade and market trends.

Market Information17.1



Jamaica has been a promoter of free and fair trade relationships and has implemented a number of trade reforms, starting with the removal of quanti-tative restrictions on imports and exports and the reduction of tariffs. As a member of CARICOM, Jamaica applies a Common External Tariff (CET) on non-CARICOM exports, which ranges between 5-20% (and even up to 40% for some agricultural items) for consumer goods and 0-5% on capital goods (WTO, 2004; WTO, 2007; World Bank, 2003).

The strategic focus for the country is to grow in trade competitiveness, a range of trade agree-ments has been established from which Jamaica currently benefits. These include agreements with key partners such as, the USA (CBI/CBERA), Canada (CARIBCAN) and the European Union (EPA), as well as the revised treaty establishing the CARICOM Single Market Economy (CSME). Other agreements include the CARICOM-Ven-ezuela Trade and Investment Agreement; the CARICOM-Costa Rica Free Trade Agree-ment (FTA); the CARICOM-Colombia Trade, Economic and Technical Cooperation Agree-ment; CARICOM-Dominican Republic Free Trade

Agreement and the CARICOM-Cuba Trade and Economic Cooperation Agreement. These trade agreements provide a range of opportunities for Jamaican exporters. However, many exporters and businesses, particularly the MSMEs, are either not aware of, do not fully understand or appreci-ate the extent to which they can utilise and bene-fit from these trade pacts.

In addition to its current main trading partners, the economic and trade significance of the Emerg-ing Markets cannot be ignored when considering trade and exports. While traditional markets, such as, the USA and Canada, will continue to play significant export roles for Jamaica, growth will inevitably come from emerging economies. It is recognised that trade negotiations with these economies, particularly Brazil, which is virtually at the doorsteps of Jamaica, need to be considered as a priority for future growth and development of Jamaica’s trade and export sectors. A deci-sion to negotiate such trade agreements should be guided by market and situational analysis and based on exporters’ priority focus.

Trade Agreements17.2

13Psychographic segmentation divides the market into groups according to customer lifestyles, social class and personality characteristics.

There are a number of challenges and constraints relating to market access and trade information. These challenges are as follows:

• limited financial and human resource capacity within the service delivery insti-tutions (including government institutions, industry associations and sector support agencies) for the preparation of essential reports, such as market entry or feasibility reports and other trade and market infor-mation;

• market and trade information is typically presented in the form of printed materials and often when available, it is outdated;

• difficulty in obtaining reliable and consistent statistics and data on national economic trends, sectoral performance, and produc-tion and export volumes in all economic sectors, particularly emerging sectors, such as, film and animation and ITES;

• insufficient communication, coordina-tion and collaboration among key trade and statistics agencies in Jamaica such as STATIN, PIOJ, JMA, JEA, Trade Board Limited and other support organisations. Further strengthening of this area needed;

• linked to the previous point, there is insuf-ficient communication and collaboration between agencies in Jamaica and other agencies within the region which provide trade support such as the Caribbean Export Development Agency based in Barbados;

• lack of regularly updated export-specific reports, such as market or product profiles;

• limited dissemination of data and reports;• limited awareness by exporters of the

existence of key information;• official trade documents not always writ-

ten in a manner that is easy to read and down to earth for the average Jamaican citizen; and

• heavy reliance by the government of Jamaica (GOJ) on trade agreements that are negotiated on a CARICOM basis. As a member of CARICOM, Jamaica must ensure that trade agreements are negoti-ated in line with its national interest and conform to the requirement of coordinat-ing external trade policy at the regional level.

Key Strategic Issues of Market Access and Trade Information

17.3



Market Access and Trade Information Strategy17.4

Vision

Objectives

17.4.1

17.4.2

The development of a competitive export sector will depend on the availability of accurate and up-to-date trade information that is easily accessible through the use of modern information technology and communications systems, particularly the Internet. In addition, the NES will seek to ensure that all Jamaicans wishing to export will be able to easily access and understand trade information including trade agreements.

The vision envisaged for the NES is:

1. To strengthen the capacity of the public sector and trade support organisations to collect, manage, analyse and disseminate trade information and data in an effective and efficient manner

2. To strengthen the capacity of the private and public sectors to utilise modern infor-mation systems for export development

3. To improve access to trade and market information

4. To fully exploit trade agreements5. To strengthen system for monitoring the

implementation of trade agreements to deal with trade problems/issues and to communicate these problems/issues to the CARICOM Secretariat

To ensure that exporters become more competitive by maximising and exploit-ing the opportunities created by existing trade regimes and agreements and to become more market-focused through increased access to sound intelligence.

Ref. #


Time Frame

Budget (US$)


H.1

1. To make trade agreements more easily understood and accessible for potential exporters.

1. Trade Agreements to be translated in layman language in a simple, easy-to-read format that can be understood by any person.

All export-ers in all sectors

Trade Board, MIIC, MFAFT

Presently in im-plemen-tation stage to be com-pleted by mid 2015.

40,000

Production of short business guides to key trade agreements.5 guides over the period.Available online and in hard copy

H.2

2. Create a single-access online portal for all key trade and market docu-ments to all key agencies including customs, Trade Board, MFAFT, JEA, JCC, JMA, cooperatives, rural and remote communities should have access.

Trade Support Organisa-tions

Trade Board

Mid 2017 75,000- Trade and market information single ac-cess portal developed

H.3

3. Ensure that there is a point of con-tact/ sector specialist in each of the relevant agencies to deal with market and trade matters. This could be done electronically.

All export-ers in all sectors

Trade Board / JAMPRO / JMA / JEA

Early 2016

-

- Sector specialist identified- Contact information publicised

H.44. Encourage Exporters to become members of associations

All exporters, particularly MSMEs

Trade Board / JAMPRO / JMA / JEA

On-go-ing

-

- Enrolment in asso-ciations improved by 20% (no baseline data available)

H.5

2. To build exporters com-petence and knowledge to enable them to use the trade processes and procedures that are in place.

5. Development of Private sector trade services that will assist exporters with the various processes that will facilitate their business.

a. JAMPRO to develop a repository of certified and recommendable experts at both origin and in market.

b. Using training videos to build knowledge about trade facilita-tion processes and procedures. (How to videos).

c. Videos are to be linked to the relevant government agencies (Customs, Trade Board, JAMPRO, MFAFT using social media, YouTube, Facebook, Twitter, Instagram, etc.)


Public and Private Sector Initiative; MIIC and PSOJ could take the lead

End 2017 110,000

- List of certified and recommendable experts developed- Experts contacted and enlisted- Three training vid-eos commissioned, developed and disseminated

H.6a3. To produce more relevant and up-to-date market intelli-gence for Jamaican Exporters

6. Recognise the importance and significance of market intelligence in driving the competitiveness of Jamai-can exporters through:

a. Subscribing to key trade and market journals


JAMPRO, JEA, TBL, JMA

1st quarter 2016

25,000

- 10 journal / publica-tion subscriptions or purchases(shared access)

H.6b

b. Encourage a mind-set of intelligence-based com-petitiveness by viewing market intelligence as a key source input such as labour and machinery – through an awareness programme geared towards businesses


JAMPRO, JEA, TBL, JMA

End 2016

50,000-awareness pro-gramme designed and launched

Market Access & Trade Information Strategies & Action Plan17.4.3In order to achieve the above vision and objectives a number of strategies and actions are recommended as follows:



Ref. #


Time Frame

Budget (US$)


H.7

7. Develop the capability to continu-ously identify and monitor key trends in the export markets through targeted training and capacity building of key personnel (short courses, conferences and internships over 2 years).

Trade support agencies and their personnel

JAMPROEnd 2016

90,000- training programme developed and launched

H.8

8. Develop an exchange programme between support agencies and private sector organisations:

a. Research personnel in the support organisations pro-vide support to businesses, reviewing data needs and market intelligence gather-ing processes

b. Private sector personnel could spend time at support organisations reviewing available data and market intelligence gathering pro-cesses

Support agencies

JEA, JMA, STATIN

Mid 2016 20,000

- Support agencies and personnel iden-tified to participate in the programme- Firms identified to participate in the programme- MOUs developed between support agencies and private firms- exchange pro-gramme launched- experience and results from the pro-gramme documented and reported on

H.9

9. Systematically and scientifically track requests for information in order to understand and respond to key data needs of Jamaican exporters through:

a. Processing and reporting on data collected from export-ers

b. Including market intelli-gence satisfaction metrics within client satisfaction surveys

Exporters – all levels

JAMPRO, STATIN, JEA

End 2015

20,000

- Enquiry tracking system put in place- tracking carried out and needs assessed- data collected and analysed- recommendations made for information needs

H.10

10. Consciously and systematically collect market intelligence at trade fairs and trade missions:

a. Key market intelligence data to be included as part of trade mission reports (new market trends, products, competition, distribution channels, data / reports collected).

b. Include a research and mar-ket intelligence component/objective of trade missions, e.g. monitoring competitors, new products, new innova-tions, distributions channels, etc.

c. Marketing personnel to participate in major inter-national trade shows as part of their market intelligence gathering process (research personnel to provide support, e.g. development of targeted questionnaires, what type of data to look for, etc.).

Trade support agencies

JAMPRO1st quarter 2016

500,000

- Trade missions/shows identified and participation agreed on - Market intelligence questionnaire devel-oped to capture key information- Marketing per-sonnel deployed to 1 trade show/mission each per key market (USA, UK, Caribbe-an, Latin America, Europe, etc.)- Market information collected, collated and analysed

Ref. #


Time Frame

Budget (US$)


H.11

11. For each sector, identify, monitor and report on the top three traditional markets and the top three emerging ones and on the Diaspora. Look at the value and size, demographics and psychographics of these key markets

All export-ers, in all sectors

JAMPRO1st quarter 2016

350,000

- 3 reports developed on the top 3 tradition-al markets for each of the 5 priority sectors- 3 reports devel-oped on the top 3 emerging markets for each of the 5 priority sectors- 1 report on the Diaspora market developed for the 5 priority sectors

H.124. To effectively deliver market intelligence in an engaging and easily accessible manner

12. Creatively package research reports in free (executive summaries, mini-brief, short profiles, etc.) and paid-for versions (full reports) through both online and offline channels.

JAMPRO / TBL

Start 2015

120,000

- reports devel-oped and designed creatively to increase consumption oppor-tunities

H.13

13. Institute a subscription-based mar-ket intelligence service that exporters can consult in order to access all rele-vant market information in real time .

JEAStart 2017

-

- Subscription-based service developed- Minimum of 100 paid subscribers by 2019

H.14

14. Increase and improve the dissem-ination of market intelligence to the private sector by actively participating and presenting key market information at industry and sector meetings such as Annual General Meetings of indus-try associations as well as regional meetings.

JAMPRO / TBL

Mid 2017

- List of meetings developed- Agreement to meet and present developed- Presentations car-ried out

H.15

5. To effectively and efficiently use sources and channels of market intelligence and resources

15. Form a Research and Analysis Action Group that comprises key research personnel of JAMPRO, JEA, JMA, PIoJ, Statin and JBDC to meet every six months to discuss, plan and implement research initiatives and data requirements in a seamless and coordinated manner to avoid duplication.

All TSO and Ex-porters

JAMPRO, STATIN, PIOJ, JEA, JBDCA

Mid 2016

- Agreement to form action group developed- meetings held every 6 months to carry out intelligence and data planning

H.16

16. Remove the communications bottleneck with respect to informa-tion dissemination by developing a template system and style sheet for market profiles and other research documents that will allow research and market intelligence reports to be more quickly organised from produc-tion to distribution. This will allow for consistency across all reports, reduced time for approvals and more efficient delivery time frames.

Business Unit

JAMPROEnd 2015

-

- template and style sheet developed internally for the Business Unit

H.17

17. Fully utilise Caribbean Export Devel-opment Agency’s market research and influence the content of their market intelligence by indicating the market data needs of Jamaican exporters on the one hand, and be an intense user of these freely available channels on the other.

Support agencies

JAMPROEnd 2016

10,000

- reports and re-search publications purchased from Carib Export- MOU developed between Trade Board and Carib Export

H.18

18. To become more proactive in dis-tributing and disseminating research and selling research publications. En-gage Communications and PR to send press releases to promote reports.

Support agencies

JAMPRO Mid 2017 15,000- regular press re-leases developed and sent out



Ref. #


Time Frame

Budget (US$)


H.1919. Embassies, Missions, Honorary Consuls to be utilised to collect and share key market information

Support agencies

MFAFTEnd 2016

-

- All embassies and trade missions con-tacted and systems put in place to collect information

H.206. To create more market access and promotional op-portunities for exporters

20. Support and incentivise firms in the priority sectors (particularly MSMEs) to attend annual trade fairs in key markets. They must be accompa-nied by trade support personnel and supported with key market and trade information as well as making key appointments with distributors, etc. to make their participation more fruitful.

Exporters in the priority sectors – particularly MSMEs

MFAFT / JAMPRO

End 2016

750,000

- 20 firms targeted each year based on export readiness and successful participa-tion in key training programmes (6 from agro-process-ing/agro business, 3 from ITES, 3 from light manufacturing, 3 from Film, 3 from Animation, 2 from mining)- Participation in at least 2 trade fairs (North America and Europe or another priority market) per annum for 4 years (2016-2019)

H.21

21. Carry out research to determine the appropriate product and market niches for the respective priority sec-tors and sub-sectors therein.

Exporters in the priority sectors

JAMPRO Mid 2017 70,000

- appropriate niches identified for the respective priority sectors and sub-sec-tors- Actions prescribed to promote and de-velop these niches- Actions implement-ed within A given timeframe

H.22

22. Hire and implement international Trade Brokers / Trade Representatives to market and promote Jamaican products and services in key target markets where trade agreements are already in place – USA, Canada, UK, Other Europe, Brazil, Spanish-speaking South America (based out of Vene-zuela or Colombia) as well as Africa (Nigeria as a start). Similar to what is being done in Tourism. These brokers will be responsible for identifying and organising trade shows, developing promotional materials, setting up meetings with distributors and key businesses/buyers on behalf of export-ers in Jamaica. A full TOR and RFP to be developed.


MIIC / MFAFT

End 2017 3,500,000

- Terms of Reference for Trade Brokers Developed- Requests for Pro-posal launched for each of the markets- 7 Trade Brokers hired and put to work

H.23

23. Marketing and promotion could also be done through commercial diplomacy whereby public and private actors with diplomatic status can support business promotion between Jamaica and the host country


MFAFT / JAMPRO

End 2016

50,000Commercial diplomacy in place

Total budget for Market Access and Trade Information is – US $5,295,000

Standards & Quality / Packaging & Labelling18

Jamaica is part of an international trading system that lays strong emphasis on issues of quality and standardisation for production, packaging, labeling and export of goods through diverse agreements/negotiations like World Trade Agreement, the Doha Round and Economic Partnership Agree-ments. The implementation of global quality stan-dards is indispensable to maintaining and protect-ing the environment and consumer safety and health. Jamaica’s exports, particularly agro-busi-ness and agro-processing commodities have often had difficulty in meeting the quality and delivery requirements specified by international buyers.

The Bureau of Standards Jamaica has been charged with the responsibility of coordinating and moni-toring standards and quality management activities throughout the country. Other organisations and

programmes wherein lie similar or related respon-sibilities include:

• Jamaica Agricultural Society Crop Certifi-cation Programme;

• IDB MIF/GOJ Implementation of Quality Environmental and Food Safety Systems in Jamaica /Quality Jamaica Project;

• National Quality Awards (NQA) Programme;

• Scientific Research Council;• Plant Quarantine and Inspection;• Veterinary Services Division • Jamaica National Agency for Accreditation

(JANAAC)• National Certification Body of Jamaica• Ministry of Agriculture and Fisheries; and• Ministry of Health.

Standards and Quality18.1



The National Certification Body of Jamaica (NCBJ) has now been established as a Unit of the Bureau of Standards Jamaica (BSJ) with certification of management systems being its core function. The NCBJ continues on the path to secure credibility, acceptability and recognition by seeking to attain international accreditation as a competent certi-fication body and will offer a variety of services including but not limited to third party certifica-tion of management systems to ISO 9001:2000 and ISO 14001:2004. The primary goal is to certify local companies to international standards in order to increase the competitiveness of their products and services in both local and overseas markets and facilitate penetration of these products and services in new markets. The NCBJ is established to achieve institutional strengthening and promo-tion of the national quality infrastructure, and ensure the Bureau’s competence in certifying the management systems of local companies which have met the requirements of rigorous interna-tional standards.

These support organisations, particularly the Bureau of Standards, presently face operational, financial and human resources challenges and are limited in their scope to fully provide local industry with access to both local and international stan-dards. A culture of quality is missing in both the manufacturing and services sectors of the econ-omy. In many cases, the quality of goods produced for the local market do not match the require-ments of international quality standards. Often local producers believe that the same level of qual-ity they provide to the local market will stand up to international scrutiny and in many cases it does not. In addition, many exporters are unaware of many standards requirements (in terms of prod-uct content, packaging quality and labeling require-ments) and this has proven to be costly as some products have been turned away at the port of arrival at the target markets.

Standards and quality is currently governed by a number of acts and regulations. These include inter alia:

• Standards Act• Weights and Measures Act• Processed Foods Act• Petroleum Control Act• CARICOM Regional Organisation for

Standards and Quality• Customs Act• Trade Act

There are a number of international standards in effect. These include but are not limited to the following:

• ISO 9000• ISO 14000• ISO 37500• ISO/IEC 90003• ISO 19600• ISO 22000• ISO/TS 22002• ISO 22004

In addition to the international standards there are also a number of national standards being imple-mented by BSJ. These include but are not limited to the following standards that are relevant to the prioritised sectors:

• JS CODEX STAN 192: 1995 – Jamaican Standard General Specification for Food Additives

• JS 106 - Part 2: 2014 – Jamaican Standard Specification for Furniture Part 2: Bamboo and indigenous furniture

• JS 328: 2014 – Jamaican Standard Specifica-tion for Food Grade Acetic Acid (diluted)

• JS 145: 2014 – Jamaican Standard Specifi-cation for Bread

• JS 277:2014 – Jamaican Standard Specifica-

cont’d

tion for Household cooking gas appliances• JS 1 Part 11 : 2014 Jamaican Stan-

dard Specification for Labelling of Furni-ture

• JS 1 Part 9: 2014 Jamaican Standard Spec-ification for Labelling of Toys

• JS 1 Part 26: 2014 Jamaican Stan-dard Specification for labelling of Tissue Products and Wipes

• JS 51: 2014 Jamaican Standard Spec-ification for Paper: Toilet Tissue

• JS 75: 2014 Jamaican Standard Spec-ification for Vinegar

• JS 106 Part 1:2014 Jamaican Stan-dards Specification for Furniture Part 1: Wooden furniture

• JS ISO 15189 : 2012 Jamaican Stan-dard Specification for Medical laboratories – particular requirements for quality and competence

Another key standard is HACCP (hazard analy-sis and critical control points) is a management system in which food safety is addressed through the analysis and control of biological, chemical,

and physical hazards from raw material produc-tion, procurement and handling, to manufactur-ing, distribution and consumption of the finished product. This standard has particular significance for agro business and agro-processing.

While the above standards as well as other not mentioned herein are necessary they are not sufficient as standards development is an ongo-ing process. It is absolutely essential that Bureau of Standards Jamaica develop additional relevant national standards that will provide for common and repeated use, rules, guidelines or charac-teristics for products or related processes and production methods, with which compliance is not mandated. In addition, local standards require-ments should also be enhanced to match interna-tional standards so that there are no discrepancies between production for local consumption and international consumption. The standards should encompass or deal exclusively with terminol-ogy, symbols, and packaging, marking or labelling requirements as they apply to a product, process or production method.



Packaging refers to the visual and protective barrier / containment of a product. Packaging materials vary from paper, board, glass, plastic, covers, tubes, bags and other container devices. The look, feel and design of packaging are used to visually appeal to customers in order to increase sales. Packaging is therefore a key contributor to a product’s qual-ity and competitiveness.

There however, appears to be a lack of apprecia-tion for the importance of packaging and labelling. This stems primarily from a lack of awareness and education on the significance of packaging and labelling as a key marketing tool and as part of the requirements stipulated for export competi-tiveness.

The national packaging industry in Jamaica is underdeveloped and limited to the manufacture of cans, plastic bottles and labels for locally produced goods, predominantly in the agro-processing and light manufacturing sectors. There is also a limited production of paper and board packaging prod-ucts. Local manufacturing and agro-processing sectors in particular, do not always adopt universal best practices for packaging and labelling of their products. Packaging material used in the manufac-turing, agro-processing and agriculture sectors are mostly imported. In the agro-processing sector, some of the packaging materials used for fresh produce, in particular, do not always meet quality

standards and at times contribute to the deterio-ration of the quality of produce exported. Multi-lateral trade agreements usually place premium on the specifications and quality of packaging mate-rial used for exports, particularly phytosanitary exports. There has been increased demand for developing countries to comply with these pack-aging standards. Non-conformity to international packaging standards could result in further unnec-essary barriers to Jamaica’s exports in the future.

It must also be noted that a packaging industry is not limited only to the provision of export pack-aging products but also the provision of packaging services underpinned by strong quality assurance measures.

The Caribbean Development Bank (CDB) has entered into a new agreement with the Bureau of Standards Jamaica for the delivery of a grant to facilitate the implementation of the “Capacity Building for Market Access” project. Under this CDB project the BSJ will upgrade its Packaging Centre and create websites to improve the deliv-ery of business support services by the BSJ to its stakeholders. The modernization of the Packag-ing Centre will enable the BSJ to provide quality testing and research services to meet the needs of its clients, and fulfil regulatory and international requirements.

Packaging and Labelling18.2 Key Strategic Issues18.3

• While Jamaica has the relevant legislative and institutional framework for quality, standards and other requirements, the timeliness and consistency of the service delivery needs improvement.

• The scope and resources of these support orgnanisations, including the testing labora-tories, are limited and must be upgraded to match the vision of the country.

• There are no certification programmes in place for standards that are becoming centre-stage internationally in terms of sustainable development. These standards include fair Trade, Organic production, etc.

• There is a lack of culture and awareness of the importance of quality and standards

• There are a number of capacity constraints that impede the delivery of a comprehen-sive and affordable range of quality services to the export community.

• Limited (but growing) availability of local experts in some technological support services, such as HACCP and ISO certifi-

cation, product development research and testing (such as formulation) within firms and institutions.

• Costs of services such as (product test-ing, certification) provided by the private sector are in some cases still prohibitive, and in other cases the quality of service provided by these professionals is variable.

• High costs of compliance with interna-tional standard requirements.

• Food exporters have to contend with a range of testing and laboratory services that reside in multiple agencies resulting in the country not meeting international standards (such as the single or aligned veterinary authority for meat and poultry products as required by the World Organ-isation for Animal Health (OIE)

• A perceived lack of technical and experi-enced personnel in the government regu-latory bodies.

Standards and Quality18.3.1



• A lack of culture and awareness of the importance of packaging and labeling.

• There is a lack of technical knowledge and support to facilitate packaging product development and design across all sectors.

• Limited use of innovative and modern pack-aging and labelling such as using authentic Jamaican recipes on labels (agro-process-ing and agro business sector)

• Major challenges encountered in packaging fresh produce to extend the shelf life

• Lack of capacity to supply the local market, particularly agriprocessing.

• Limited availability of competitive and high quality packaging and labeling includ-ing design, printing, variety and quality of packaging materials. Most materials are imported.

• Limited awareness of the implications for intellectual property

• Lack of knowledge of international stan-dards relating to packaging and labeling

• Lack of strategic partnerships and alliances between export producers and packaging and labeling suppliers

• Limited standards relating to packaging and labeling, e.g. environmental standards relating to raw material usage such as PET (Polyethylene terephthalate) plastics, which can be hazardous to the environment and contribute to waste pollution.

• Lack of a globally harmonised system (GHS) for the classification and labeling of products / product content.

Packaging and Labelling18.3.2

Strategy – Standards & Quality (incl. Packaging & Labelling)18.4

Vision18.4.1

The proposed vision for standards and quality (including packaging and labelling) is for :

Jamaica to be positioned as a source of high quality goods and services

Objectives18.4.2The objectives that dovetail from the vision are as follows:

• To raise awareness in the export sectors on the importance of standards and quality / and packaging and labeling to the country.

• To build the capacity of stakeholders in the export sector on quality management.

• To continue and enhance the facilitation of certification schemes in ISO 9001 quality management systems, ISO 14001 and ISO 22000 (food safety management), HACCP, organic certification and fair trade.

• To strengthen the regulatory capacity of quality and standards support agencies.

• To develop a professional and competitive packaging industry

• To develop quality standards for the pack-aging industry

• To ensure that packaging and labeling strengthens the international competitive-ness of Jamaican products and services

• To build a competitive quality management infrastructure (metrology, testing, standards, certification, accreditation, etc.)

Ref. #


Time Frame

Budget (US$)


I.1To ensure that quality assur-ance services are available in adequate supply

1. Establish Public private partnerships to drive awareness of the importance of quality systems (to create a demand which would drive supply)

All suppli-ers

JAMPRO with sup-port form Bureau of Standards

End 2016

65,000Awareness pro-gramme developed

I.22. Provide incentives to firms for certification of their Products/ systems/ facilities

All suppliers – particularly MSMEs


Mid 2017 25,000Incentive system developed

I.3

3. Forge regional and international partnerships at the institutional level through exchange programmes to build human resource capacity in standards

Support agencies in Quality manage-ment

MIIC / MFAFT

Mid 2017 -Partnerships / MOUs developed

I.44. Provide tax incentives to attract new providers of quality assurance services.

Providers of quality assurance services

MoFPEnd 2016

-Tax incentives devel-oped

I.51. Increase transparency of government regulatory requirements

5. Increase the provision of informa-tion to clients on the requirements and processes under the regulations


Bureau of Standards with Support from JEA / JAMPRO

Mid 2017 12,000Information dissem-inated

I.6

6. Execute an awareness program to ensure stakeholders are aware of the quality management and packaging requirements.


Bureau of Standards with Support from JEA / JAMPRO

Mid 2017 30,000Awareness pro-gramme developed

Standards and Quality Action Plan18.5



Ref. #


Time Frame

Budget (US$)


I.77. Institute ongoing consultative pro-cesses with stakeholders in developing the regulations

All suppli-ers

Bureau of Standards

End 2017 10,000Stakeholder consulta-tions carried out

I.8

8. Develop and provide certification for organic, fair trade, and other certifica-tion programmes related to sustain-able development.

All suppli-ers

Bureau of Standards

Mid 2018 75,000

- fair trade and organic certification developed and imple-mented

I.9

9. Identify appropriate, affordable, modern and convenient packaging, particularly for agro-processed and agro products e.g. SPS compliant

Suppliers / exporters

JMAEarly 2016

Packaging products/suppliers identified

I.1010. Attract top producers of packaging to set up in the SEZs to provide high quality and affordable packaging

Packaging suppliers

MIIC Mid 2018 75,000Packaging suppliers invited to set up in SEZs

I.11

11. Provide incentives to compa-nies wishing to establish packaging production locally, particularly for Consumer friendly packaging and packaging which enhances shelf life of agro-products

Packaging suppliers

MIIC / MOF End 2017 15,000Incentives set up and implemented

I.1212. Develop a consolidated purchasing system for packaging materials

ExportersJAMPRO, JBDC

End 2017 20,000

Consolidated pur-chasing system for packaging materials developed

I.13

13. Provide and promote training in design use and standards compliance for packaging (Some initiatives are underway by BSJ, JEA, SRC, JBDC)

Packaging suppliers / exporters

Bureau of Standards with sup-port from SRC, JEA, JMA and JAMPRO

End 2017 75,000 Training provided

I.14

14. Develop reports / intelligence on the international trends relating to packaging and labelling to inform decisions about same

Packaging suppliers / Exporters

JAMPRO, BSJ

Mid 2017 15,000 Reports developed

Total budget: US $417,000.00

Capacity Building19A major barrier to realising a robust export sector in Jamaica is the low level of competence on issues relating to the export of goods and services among key players in the public and private sectors. Export capacity building broadly covers aspects of production, marketing, sales, trade negotiations, international trade finance, export procedures, banking, transport and standards. To promote export growth in Jamaica, there is a crit-ical need to develop the level of competences of policy makers and members of the private sector involved in exports. There is need to build an understanding of key issues on export promotion and ensure that policies that promote exports are passed. For example, there is a limited competence in terms of market intelligence and understanding some of he key trends affecting trade worldwide. Within the private sector, there are low levels of export know-how, particularly among MSMEs and new entrants. The sector players are weak and not in a position to build the necessary skills required to improve on the export of their prod-ucts. This problem is exacerbated by high levels of

informality in many businesses, particularly among MSMEs, and poor access to / limited knowledge of the existence of information on export markets, standards and export requirements.

Keeping pace with international business require-ments calls for extensive and continuous invest-ment in competency development and keeping track of demand for new services in the form of training and business counselling. A range of insti-tutions such as JAMPRO, JEA, JMA, Trade Board, etc. offer business and export competency train-ing in the form of short workshops, seminars and printed material (both offline and online) in the following areas:

• Business plan development, • Marketing, • Financial management, • Pricing, • Negotiating,• Standards and quality,• Other export training.



There are however less consistent advisory and support services tailored for the individual clients, or in-depth training in these and other areas. One of the key tools that have been launched to build export capacity in Jamaica is the Export Max programme which aims to assist small to medium sized enterprises with growing their export sales.

The Export Max: Enterprise Development for Growth Programme, a two-year initiative launched by JAMPRO in 2011, provided a pilot group of fifteen (15) companies with a range of business development and export promotion services that enabled them to penetrate new markets and collectively increase their export sales by 31% (J$1.4 billion). Some of these services included:

• Company diagnostics/needs assessment• Market research support• Business/export marketing plan develop-

ment• Facilitation of access to technical assistance

and financing • Individualised coaching in financial and

records management• Quality standards development (e.g.

HACCP, ISO9000)• Business matchmaking• Facilitation of access to services of partner

agencies• Support for participation in export promo-

tion activities including trade missions and trade shows

• Capacity building training through targeted workshops and seminars

A second phase of the programme was launched in 2014 piggybacking on the success of the first phase. This follow-up initiative, which is called Export Max II, will offer the same benefits as the initial programme, while introducing new features such as a mentoring and ongoing individualised business coaching. The programme initially will target agriprocessing, limestone and light manufac-turing MSME exporters.

Another programme is the FINPYME Export Plus programme, also targeting MSMEs to help them build export capacity and gain access to markets. The key activities being executed under the programme include a series of fourteen (14) capacity building workshops, which will be coupled with the provision of technical assistance.

There are a number of other capacity building initiatives carried out by the JEA, such as export and market data, technical support providing business space, business planning support among others. The JBDC is another agency that provides capacity building services to exporters including technical services, business consultation and advi-sory services among others.

cont’d

• Lack of an integrated and complemen-tary approach to export capacity building that targets current, potential and aspir-ing exporters at varying levels of devel-opment (large, medium and small).

• Limited consistent advisory and support services tailored for the individual clients.

• Limited in-depth training in business plan development, marketing, financial

management, pricing, etc. These type of training exist on a small scale in some cases and is ad hoc in others.

• Limited export training curriculum with the requisite scope and depth that enables complementary short courses (such as market development and pene-tration). The scale and scope of existing programmes could be expanded.

Key Strategic Issues of Capacity Building

Capacity Building Strategy

19.1

19.2

Vision19.2.1

The proposed vision for standards and quality (including packaging and labelling) is for :

Developing high quality human resources through capacity building in order to drive export competitiveness

Objectives19.2.2The main objectives of this strategy for capacity building are as follows:

• To fill any export capacity deficiencies and gaps in order to create a more export ready environment

• To increase the competitiveness of Jamai-can exporters by providing relevant train-ing and capacity building

• To create an integrated and consistent approach to export capacity building



Ref. #


Time Frame

Budget (US$)


J.1

1. Creating and building a sus-tainable adaptive educational system to respond to the changing needs of the Export Sector

1. Carry out a needs assessment and gap analysis of skills sets and attitudes required in the targeted sectors to determine current and future employ-ment needs to support export growth areas

The needs assessment should pay par-ticular attention to those sectors with a low rate of female employees and determine the skills needed by women in order to take up jobs in these sec-tors such as mining, agri-processing and manufacturing.

-Employ-ees in the priority sectors

MIIC with support from Ministry of Education

May/June 2016

30,000- Needs assessment carried out

J.22. Conduct assessment of teacher training programmes and capacity towards meeting the identified needs

-training pro-grammes


May/June 2016

25,000

- Needs assessment carried out- Recommendations developed

J.3

3. Review and upgrade primary, sec-ondary and tertiary curricula including input and advice from national and regional industry and export promo-tion entities (take account of foreign language competence)

- Students at all levels


May/June 2016

45,000

- Primary, secondary and tertiary school curricula reviewed- Primary, secondary and tertiary school curricula upgraded in line with export needs

J.4

4. Develop and promote educational programmes that incentivise and equip the workforce to enter these ex-port sectors e.g. scholarships and team building competitions, career weeks

- employ-ees in the priority sectors

JEA/JBDC Mid 2017 50,000- Educational pro-grammes developed and promoted

J.5

5. Include schools as a target in the Buy Jamaican campaign to sensitise students to opportunities in entrepre-neurship and export

Students at all levels

JEA Mid 2017 40,000

- Export awareness among schools de-veloped through Buy Jamaican campaign

J.6

6. Extend and further develop business incubation system tied to the delivery of specialised education, training and services with special emphasis on female and young entrepreneurs

Exporters – Par-ticularly MSMEs

JBDC1st Quarter 2017

220,000

- Business incubation programme expand-ed (special focus on female and young entrepreneurs)

J.7

7. Promote partnerships between pri-vate and public education and training institutions and the private industry players to develop a three-tier export curriculum which spans introductory, supervisory and management courses.

Students, employ-ees and exporters

Lead by JEA in collabora-tion with Training Institutions / Private Sector / Trade Support Organisa-tions

Mid 2017 50,000

- Capacity building partnerships devel-oped- Training pro-grammes enhanced or developed

J.8

8. Develop entrepreneurship pro-grammes and internships at all levels in partnership with industry to foster entrepreneurial mindset

Students and em-ployees

JAMPRO End 2017 150,000- Internships devel-oped and promoted

J.9

2. Improvement of Business systems, processes and infra-structure to support increased efficiency to satisfy global standards

9. Establish a repository of information for financing and business support services through interagency collabo-ration to support exporters (to include monitoring, mentoring and evaluation)

All export-ers

JAMPRO / JEA

End 2017 12,000- Repository devel-oped and promoted

Capacity Building Strategies and Action Plan19.2.3

Ref. #


Time Frame

Budget (US$)


J.10

3. Build capacity of the priority sectors to increase efficien-cies and competitiveness in key areas of production and business management

10. Develop training programmes targeted particularly to MSMEs in appropriate areas such as:

Manufac-turers – MSMEs

JMAEarly 2017

400,000

- Training pro-grammes developed

- 200 MSMEs targetedRegular training opportunities / events created both offline and onlineSpecial targeting for female MSME owners (at least 40% are women)

- 15 established com-panies mentoring 30 MSMEs in agro-pro-cessing and agro business sector on a regular basis by 2019

- 10 established com-panies mentoring 20 MSMEs in agro-pro-cessing and agro business sector on a regular basis by 2019

- 5 established com-panies mentoring 10 MSMEs in the light manufacturing sector on a regular basis by 2019

- 3 established com-panies mentoring 6 MSMEs in ITES sector on a regular basis by 2019

- 2 established com-panies mentoring 4 MSMEs in mining sector on a regular basis by 2019

- 3 established com-panies mentoring 6 MSMEs in film sector on a regular basis by 2019

- 3 established com-panies mentoring 6 MSMEs in animation sector on a regular basis by 2019

The total budget for Capacity Building is US $1,022,000.00


Other Strategic Areas Other Strategic Areas Other Strategic Areas Other Strategic Areas Other Strategic Areas Other Strategic Areas Other Strategic Areas Other Strategic Areas Other Strategic Other Strategic Areas Other Strategic Areas Other Strategic Areas Other Strategic Areas Other Strategic Areas Other Strategic Areas Other Strategic Areas Other Strategic Areas

Other Strategic Areas Other Strategic Areas Other Strategic Areas Other Strategic Areas Other Strategic Areas Other Strategic Areas Other Strategic Areas Other Strategic Areas Other Strategic Other Strategic Areas Other Strategic Areas Other Strategic Areas Other Strategic Areas Other Strategic Areas Other Strategic Areas Other Strategic Areas Other Strategic Areas

Part4Other Strategic Areas


Part 4 – Other Strategic Areas Part 3 – Other Strategic Areas

Branding20It is critical for exporters to exploit and benefit from the power of the Jamaica brand. There is a critical need for market access and market pene-tration and branding will add the ‘muscle’ to assist in making this a reality.

However, a key challenge is that there is a lack of consistency in branding Jamaica. A number of ‘marks’, logos, etc. in different sectors of govern-ment agencies are currently being utilised to represent brand Jamaica. There is critical need for the development or identification of a consistent ‘mark’ that can be used across the board and by all exporters. This ‘mark’ needs to be managed and used as a means of authenticating products coming out of Jamaica. It has been noted by a number of stakeholders, e.g. Ministry of Agricul-ture, that products not originating from Jamaica are often touted as Jamaican brands, such as Ugandan yellow yams bearing Jamaican labels. A recognised, accepted and strongly policed Jamaican brand and mark of authenticity that is consistent across all

sectors and products will be a significant move forward in distinguishing Jamaican products from counterfeit ones.

Branding is particularly important within the manufacturing and agro-processing sectors and critically needed for small and medium enter-prises and new market entrants who do not possess the same calibre of brand strength such as Grace, LASCO, Red Stripe and Appleton. Brand-ing cannot be ignored in positioning products in the markets, as the Jamaica brand can bolster the attractiveness and competitiveness of said prod-ucts, resulting in the discerning customers’ willing-ness to pay a premium.

The development of trade brokers / commission-ers and a Jamaican brand can be a valuable asset in supporting this initiative.

There are a number of issues affecting branding in Jamaica. These include the following:

• Inconsistent and incoherent country trade-marks / brands currently being used by different sectors. Need for one brand for the entire country, representing all sectors and industries.

• No policing of the use of “Made in Jamaica” or geographic locator.

• Little or no brand Jamaica promotion or awareness initiatives. There are no repre-sentatives in the international markets seeking out brand Jamaica promotional opportunities.

• Insufficient use of brand icons to bolster the Jamaica brand strength.

Key Branding Issues20.1

Branding Vision20.2.1

The proposed vision for branding is as follows:

To increase create a widely recognised and strongly positive brand Jamaica both regionally and internationally

Brand Objectives20.2.2The main objectives for branding are as follows:

• To use the existing brand muscle to build a unique Jamaican Brand that will propel the economy (producers, exporters, people, etc.) to higher levels of economic prosper-ity.

• Build capacity among suppliers to take full advantage of the brand

• To market and promote the brand



Ref. #


Time Frame

Budget (US$)


K.11. Recognise the need for a brand Jamaica at the highest level.

1. Agreement among all ministries of the need for a Unique National Jamaica Brand

All Sectors and Indus-tries

MIIC+GOJEnd 2015

-Parliamentary Note/Decision

K.22. Decision of Parliament/Cabinet to develop the Brand


MIIC+GOJEnd 2015


K.3

3. Budget allocated to develop the Brand and to manage its marketing and promo-tion, exploitation, control and implemen-tation


MIIC+GOJEnd 2015


K.44. Identify which organisation will be responsible for ‘housing’/ managing/ mon-itoring/ commercialising the brand.


MIIC/MFAFT

Mid 2016

-

K.52. Launch an international tender to develop brand Jamaica

5. Develop a terms of reference with the following characteristics:

a. Consultative processb. Build on the brand equity that

already exists – Marley, Bolt, etc.c. Exploit existing brand initiatives

being carried out by the Jamaica Exporters Association, the Jamaica Tourist Board, Ministry of Industry, Investment and Com-merce, etc.

d. Assess the attributes of the brande. Must be built on sound market

researchf. Should be global in natureg. Flexible, dynamic and adaptive

with brand applicationh. Local involvement and com-

petition (as a means of gaining feedback and ideas)

i. Engage the Diaspora in develop-ing the brand

j. Identify the value proposition of the Jamaica brand


JAMPROEnd 2016

K.6

3. To develop a strong and consistent brand Jamaica that is recognised internationally and accepted by local players

6. To continue the process of establishing geographical indicators such as those for Blue Mountain Coffee, Jamaica Jerk, etc.


MIIC, JAMPRO

Jun-16 20,000 - indicators developed

K.7

7. Establish a Global ‘Made in Jamaica’ / ‘This is Jamaica’ Marketing and Public Relations Campaign locally, regionally and internationally.


MIICEnd 2016

1,000,000

- Marketing and PR campaign launched and on-going annual-ly for 3 years

K.88. Fast-track legislation to ensure that the brand is properly policed.


MIIC + JIPO

End 2017

-- Legislation devel-oped

K.99. To specify and define the rules and criteria for the use of the brand and ensure alignment with international standards


JIPO + MIIC

Mid 2017

-- Rules and criteria for brand use specified and defined

Branding Action Plan20.2.3

Ref. #


Time Frame

Budget (US$)


K.1010. To identify areas for exposure for the Jamaican branded products


JAMPROMid 2017

-- Areas for exposure of branded products identified

K.1111. Provide support to local suppliers to become brand-ready.

All Sectors – Par-ticularly MSMEs

JAMPROMid 2017

75,000- Brand-ready support implemented

K.12

12. Develop a Dedicated Brand Commis-sion/ Division to implement, monitor, pro-mote and commercialise the brand. The commission will be structured as follows:

a. Managerb. PR /Communicationsc. Legal / Intellectual Propertyd. Research and Archivinge. Administrationf. Monitoring and Policing (Develop

and Implement a public/private sector advisory group to monitor the brand)

All SectorsMIIC / JAMPRO / BSJ/JIPO

Mid 2017

900,000

- Commission/ Division set up and running- Brand monitoring advisory group estab-lished

K.13

4. To ensure that the Jamaica Brand is accessible to local suppliers and manufacturers at all levels

13. Build capacity of the Bureau of Stan-dards (BSJ) to certify companies to carry the brand using a fast-track certification process

All SectorsJAMPRO / BSJ

Early 2018

50,000- BSJ capacitated to certify brand use

K.1414. Create / identify funding mechanisms for certification

All sectors – par-ticularly MSMEs

MOF / MIICEarly 2018

20,000 - Mechanisms in place

Total budget for Branding is US $2,065,000.00



Sustainability21Exports have been chosen by the Government of Jamaica as an effective means of macro-economic development. However, the natural, historical and human resources that make up the foundation for export development in Jamaica are fragile and irreplaceable and it is essential that development be carefully planned and managed. Critical to the success of this project is the conservation of both historical and natural resources; that local commu-nities benefit and are truly involved in the imple-mentation process; that export development takes place in a sustainable manner; and that partner-ships among the government, the private sector and the wider Jamaican community become a key vehicle for achieving sustainable development. The role of women is also a key component of this triple bottom line reporting.

For sustainability, a number of areas in the imple-mentation of the NES need to be addressed:

• The development and implementation of criteria for sustainable development.

• Identifying a framework to ensure that all new developments in Jamaica meet sustainable development criteria, includ-ing the conduct of environmental impact assessments, community involvement and sustainable development criteria.

• Identifying measures to ensure that exist-ing and proposed export programmes and projects meet international environmental standards.

• Exploring ‘clusters’ of competitiveness in the green economy.

• Exploring strong linkages among the sectors.

• Capacity building and sharing of knowl-edge with stakeholders and the Client at all levels.

One of the strategic clusters that can be consid-ered for development and investment promo-tion is the Green Economy Cluster. The Green Economy is a term used to describe all economic and productive activities aimed at saving Planet Earth. The Green Economy cluster, for example, could include a company that produces the most energy efficient air conditioning units for large-scale commercial use in factories and office build-ings (the Chinese have the competitive edge on this already and the Germans are not far behind). Imagine the impact that access to low-cost air conditioners, solar heaters and chillers can have on the competitiveness of Jamaican agro-businesses and manufacturers. This Green Economy cluster could also include manufactures of plastic stor-age tanks and composters, irrigation systems etc. that will directly improve the competitiveness of

Jamaican farmers. And this is literally the tip of the iceberg. Imagine also the impact that this Green thrust will have for the image and the sustainability of Jamaica’s initiatives. The environment is a viable industry and growth sector, capable of energising other sectors of the economy. It is important that Jamaica leads this environmentally responsible and sustainability drive, especially as Jamaica has one of the oldest traditions of environmental conser-vation – the Rasta community has perhaps one of the smallest ecological footprints in the world.

This is why it is so critical for standards to reflect organic and fair trade to drive the competitiveness of all of the sectors. Critical too is for branding to have a sustainability slant that puts Jamaica in the right light internationally.

A number of key strategic issues concerning the environment appear in the priority sectors. These include:

• Limited environmental consciousness and awareness among local citizens and busi-nesses.

• Limited knowledge of alternative sources of energy / resource consumption and how to protect and conserve the environ-ment.

• Volatile oil prices and high cost of energy.

The Environment as an Industry

The Environment as an Industry

21.1

21.2



Sustainability Action Plan21.3

Vision

Objectives

21.3.1

21.3.2

The proposed vision for the environment, in the context of the NES priority sectors, is as follows:

• To improve the environmental conscious-ness and awareness of Jamaicans

• To establish the environment as a viable economic industry

• To use the environment as a tool to strengthen the Jamaican brand

Sustainable use of natural and energy resources for a more competitive economy

Ref. #


Time Frame

Budget (US$)


L.1

1. To educate the public about the importance of the environment and alternative energy

1. To examine the current business prac-tices in the priority sectors with a view to mitigating environmental impacts

All players in the priority sectors

Ministry of Water, Land, Environ-ment and Climate Change (MWLEC)

End 2015

50,000

- Examination of business practices carried out- Gaps and key infringement issues identified- Recommendations and solutions devel-oped

L.2

2. Develop an environmental awareness campaign targeted to players in the public and private sectors using appropriate media


MWLEC with sup-port from MIIC

Jan-Jun 2016

450,000

- Campaign devel-oped- 6 month Campaign launched using appro-priate media

L.33. Identify, recommend and promote envi-ronmental alternatives to suppliers


MWLEC with sup-port from MIIC, JEA, JMA and JBDC

Jan-Jun 2016 and on-go-ing

150,000- environmental alter-natives identified and promoted

L.42. To develop a clear policy on environmental sustainability

4. Institute land zoning policies and land suitability analysis


MWLEC, PIOJ

Mid 2016

10,000

- Land zoning policies instituted- Land suitability anal-ysis carried out

L.53. To develop and promote the environment as a viable economic industry

5. Determine the volume and value of the green economy (environmentally friendly products).


MIICEnd 2016

80,000- Economic assess-ment carried out

L.66. Educate the public and private sector on the volume and value of the green econo-my (environmentally friendly products).


MWLEC with sup-port from MIIC

Jan-Jun 2016

See item 2 above

- Education and awareness campaign carried out. See item 2 above.

L.77. Investigate opportunities and projects for the development of carbon credits


MWLECEnd 2016

25,000

L.8 8. Develop incentives for recycling


MWLECEnd 2016

- - incentives developed

L.99. Identify and promote environmentally friendly packaging.


MIIC / BSJEarly 2017

40,000

- environmentally friendly packaging identified and pro-moted

L.10 10. Establish green clusters in the SEZs:

Sustainability Action Plan21.3.3



Ref. #


Time Frame

Budget (US$)


L.10aa. Conduct a study on the economic and social impact of setting up green clusters in the SEZ

Green businesses

MIICEarly 2016

25,000-Study completed and impact assessed

L.10b

b. Identify and target green businesses to set up in the SEZ. These firms must add value to Jamaican businesses in terms of reducing costs, saving the environment, e.g. solar panels, energy efficient industrial air-conditioners, irrigation, etc.

Green businesses

JAMPROMid 2018

85,000

- A list of priority green products de-veloped- A list of 20 firms with a mix of priority green products developed- A green investment promotion initiative launched to attract green businesses- Green clusters developed

L.10cc. Incentivise local companies to establish green-related businesses, products and services

Local investors

JAMPROMid 2018

25,000- Incentives devel-oped

L.11To promote Jamaica as an environmentally conscious nation

11. Add an environmental component to the brand positioning of Jamaica and promote internationally

Inter-national markets

JAMPROMid 2017 - 2019

100,000

- the Jamaica brand positioned with an environment com-ponent

Total Budget: US $1,040,000.00

Monitoring and Evaluation22The Monitoring & Evaluation function will first and foremost be guided by key partners involved the National Export Strategy 2015-2019 devel-opment process. The National Export Strategy 2015-2019 implementation will be directed by the NES Secretariat which will report directly to the NES Project Advisory Committee which in turn will report to the Minister of Industry, Invest-ment and Commerce. The NES Secretariat itself will comprise of JAMPRO, the Jamaica Exporters’ Association (JEA) and the Trade Board Ltd. The NES Project Advisory Committee will further constitute the following key members – a repre-sentative from MIIC, the NES2 portfolio Ministry, the Ministry of Foreign Affairs and Foreign Trade, the Planning Institute of Jamaica and the Export Import Bank of Jamaica (Exim Bank) and other technical experts based on the required need.

Critical to implementation success are the Sector Leaders, whose roles are to oversee the direct

implementation of their respective sector or cross-cutting area. They will in turn, report quarterly to the NES Secretariat. The sector leaders can suggest in their specific sector, additional persons or resources that could add value to the monitor-ing and evaluation function.

In addition to quarterly report there will also be annual reporting which will be made public. This reporting function will describe progress to date against key goals and targets for each of the prior-ity sectors and crosscutting areas.

Participation and cooperation of all stakeholders is a key assumption in the implementation of the National Export Strategy 2015-2019.

The M&E Implementation structure proposed for the National Export Strategy 2015-2019 is follows overleaf:

M&E Structure22.1



Monitoring and Evaluation Structure

Monitoring and evaluation (M&E) is not an activity but a process. In order to develop a framework to monitor and evaluate the NES a number of steps are required. The M&E process will involve the following steps:

a. Establishing Baselines and Data Sources – where possible the NES has been able to capture baseline date. However, additional data may be required for the M&E process.

Key areas of challenge are the services sectors such as ITES and film and anima-tion).

b. Measuring progress – the implementation plan will help guide the M&E process as it outlines activities, time frames, targets and objectively verifiable indicators.

c. Reporting progress – Progress should be reported on a regular basis with an annual report to be made available to the public.

The Monitoring and Evaluation Process22.2

The implementation plan comprises a compre-hensive action matrix according to the agencies responsible for the implementation of the respec-tive actions. Each agency or institution will have its own set of actions for the respective priority sectors and crosscutting areas. The implementa-tion plan is maintained electronically on a dedi-cated portal/network enabling all implementing agencies to apprise the NES Secretariat on a real time basis of changes in the status of the sectors of which they are responsible. The NES Secretar-iat are project managers of the implementation plan, with a day to day oversight function and the ability to collate reports in readiness for engage-ment with the NES Project Advisory Committee.

The implementation matrix is broken up into the following areas:

• Activities to be implemented;• The target beneficiaries that the activities

cater to;• The responsible agencies and partners;• The budgeted time frame;• The actual implementation time frame;• The expected budget;• The actual implementation expenditure;• The Objectively verifiable indicators;• The sector that the activity belongs to; and• The implementation status and progress

to date.

A mid-term review shoul take place in 2017. It is also recommended that an overall review should be conducted at the end of the NES period (2019) in which all stakeholders are to be involved.

d. Taking corrective action – the key to a successful M&E process is corrective action. This may involve revising actions that are not working or coming up with new actions based on new information or changed circumstances. The key is that the action plan organic in nature and should be flexible.

In addition, the M&E process will cover five (5) critical areas –

a. Relevance – To what extent has the NES been relevant to the overall economic

mandate and needs of the wider economy and priority sectors?

b. Effectiveness – How useful has the NES been at achieving targets and addressing crosscutting issues?

c. Efficiency – To what extent has the NES been standardised and have planned targets been met in a timely manner while optimally using available resources?

d. Impact – What practical outcomes have resulted from adopting the NES – economic, social, institutional, etc.

e. Sustainability - What financial and institu-tional measures have been taken to assure that local staff have capacity to implement the export strategy? Are stakeholders fully on board and will they continue to show support?

Implementation Plan22.3


GlossaryPart 4 – Other Strategic Areas

Annex 1 – List of Documents Reviewed23A number of documents were reviewed in prepa-ration for the NES design process. They were deemed relevant for the project to provide a solid foundation for fully understanding the context and basis for the National Export Strategy. The first National Export Strategy 2010-2013 as well as the findings of the assessment/review of the first NES were analysed (including the individual strat-egies for the priority sectors). Other documents reviewed but was not limited to the following:

• Vision 2030 Jamaica – National Develop-ment Plan

• The Export Reform Report • The Export Max Report • The Three-Year Service Sector Strategies

and Expansion Plans• The Technical Paper on Non-tariff Barriers• The Revised Draft Jamaica 2014 Foreign

Trade Policy• Identification and Assessment of the

Underlying Reasons Affecting Caricom’s Trade Performance Under the Exist-

ing Bilateral Trade Agreements with The Dominican Republic, Costa Rica, Colombia, Cuba And Venezuela

• The Jamaica Logistic Hub Initiative Frame-work Study

• The Limestone Study• The ITC Non-Trade Measures in Jamaica• The Tholons Study on the Outsourcing

Market• JAMPRO Corporate Annual Reports

2013-2014• The World Economic Forum Global

Competitiveness Report 2014-2015• The Doing Business Report 2015• Economic and Social Survey of Jamaica

2013• Jamaica’s National Energy Policy 2009-

2030• The Green Economy Scoping Study for

Jamaica• Micro, Small and Medium Enterprises and

Entrepreneurship Policy 2013

AAJ Airports Authority of JamaicaACP African, Caribbean and Pacific StatesAFI Approved Financial InstitutionASYCUDA Automated System for Customs DataBCI Business Competitiveness IndexBOJ Bank of JamaicaBPO Business Process OutsourcingBRIC Brazil, Russia, India and ChinaBSJ Bureau of Standards JamaicaCAC Consumers Affair CommissionCARIBCAN Canada-Commonwealth Caribbean Trade AgreementCARICOM Caribbean CommunityCARIFORUM Caribbean Forum of ACP StatesCEATA Centre of Excellence for Advanced Technology in AgricultureCBET Competency Based Education and TrainingCBO Community Based OrganisationCPI Consumer Price IndexCSME Caribbean Single Market and EconomyCSO Civil Society OrganisationCTO Caribbean Tourism OrganisationDBJ Development Bank of JamaicaEEZ Exclusive Economic ZoneEPA Economic Partnership AgreementEPI Environmental Performance IndexESSJ Economic and Social Survey JamaicaEU European UnionEXIM Bank The National Export-Import Bank of JamaicaFAO Food and Agriculture OrganisationFDI Foreign Direct InvestmentFTC Fair Trading CommissionFTZ Free Trade ZoneGCI Global Competitiveness IndexGCT General Consumption TaxGDP Gross Domestic ProductGIS Geographical Information SystemsGMP/HACCP Good Manufacturing Practices/Hazard Analysis and Critical Control PointsGOJ Government of JamaicaHDI Human Development IndexHEART Trust/NTA Human Employment and Resource Training Trust/National Training AgencyHRD Human Resources DevelopmentICT Information and Communications TechnologyICT4D Information and Communications Technology for DevelopmentIDB Inter-American Development BankIOJ Institute of JamaicaIP Intellectual PropertyISO International Standards OrganisationIT Information TechnologyJCA Jamaica Customs AgencyJAPA Jamaica Agro-Processors Association

Glossary

JAMAICA’S NATIONAL EXPORT STRATEGY | 2015-2019234

Glossary

JBDC Jamaica Business Development CentreJBI Jamaica Bauxite InstituteJBM Jamaica Bauxite Mining LimitedJBS Jamaica Bureau of StandardsJCC Jamaica Chamber of CommerceJEA Jamaica Exporters’ AssociationJIPO Jamaica Intellectual Property OfficeJIS Jamaica Information ServiceJLI Jamaica Limestone InstituteJMA Jamaica Manufacturers’ Association LimitedLHI Logistics Hub InitiativeLPI Logistics Performance IndexMFAFT Ministry of Foreign Affairs and Foreign TradeMGD Mines and Geology DivisionMIIC Ministry of Industry Investment and CommerceMIS Management Information SystemMOAF Ministry of Agriculture and FisheriesMOE Ministry of EducationMOJ Ministry of JusticeMOU Memorandum of UnderstandingMSME Micro, Small and Medium EnterprisesMWLEC Ministry of Water, Land, Environment and Climate ChangeNCSI National Coalition of Service IndustriesNES National Export StrategyNPCB The National People’s Co-operative BankNGO Non-Governmental OrganisationPAJ Port Authority of JamaicaPIOJ Planning Institute of JamaicaPSOJ Private Sector Organisation of JamaicaPTA Parent Teachers’ AssociationR&D Research and DevelopmentRADA Rural Agricultural Development AuthorityREER Real Effective Exchange RateSBAJ Small Business Association of JamaicaSEZ Special Economic ZonesSIPP Security Interest in Personal PropertySMART Specific, Measurable, Achievable, Realistic, Time-boundSRC Scientific Research CouncilSTATIN Statistical Institute of JamaicaSWOT Strengths, Weaknesses, Opportunities and ThreatsTII Tourism Intelligence InternationalTVET Technical Vocational Education and TrainingUK United KingdomUN United NationsUNSTAT United Nations Statistics DivisionUSA United States of AmericaUTECH University of TechnologyUWI University of the West IndiesVoIP Voice over Internet ProtocolWTO World Trade Organisation

Notes

Notes