As outsourcing stakeholders aim to bring more services-based business into their jurisdictions, the role of investment promotion agencies has never been so important.  No matter whether at the municipal, regional or national level, the ability of an economic development organization to attract attention and lure new BPO entrants can have a massive impact on employment, economic growth, and social mobility.

The recently published Offshore BPO Confidence Index 2022 by Ryan Strategic Advisory and Cognitive Copy shows that outsourcing providers take economic development agencies seriously.  A seamless BPO ecosystem that combines individual operators, local outsourcing associations, and government promotion agencies cannot be underestimated when it comes to winning new services investment.

Based on those participating in this research, destinations such as South Africa and India perform well in this regard. However, a disconnect emerges when government support for the outsourcing industry is not clearly organized, according to the 2022 Offshore BPO Confidence Index.  Countries like Nicaragua, the Czech Republic, and Serbia have work to do if they are to ensure greater cohesion between investment promotion agencies and the BPO space.

With this in mind, investment promotion agencies should consider the following strategies if they aspire to bring in new BPO investors.

  1. Hire leaders from the outsourcing sector – with the best will in the world, a career bureaucrat can learn the BPO space from an academic angle, but for any successful economic development agency to succeed they must have team members that come from the outsourcing industry. This ensures that incentives and promotional plans are tailored to the sector. Properly targeted programs in turn catalyze new investment, and this can only be realized with real-world subject matter expertise.
  2. Reduce red tape – effective investment promotion agencies cut excessive paperwork and regulations for new BPO investors. Granted, every location has rules with which new investors must comply. But maintaining a streamlined approach to procedures and approvals will be happily received by any prospective investor.  Thus, investment promotion agencies need to aggressively lobby legislators to reduce redundant laws and rules.  This also means keeping meetings relevant, to a minimum and ensuring those that take part from the government agency’s side are pertinent stakeholders that can help move a possible investment forward. Inviting large numbers of bureaucrats with limited input for the sake of appearances is futile.
  3. Give the BPO industry input on the investment vision – economic development teams can best position a location by working closely with industry players to develop and implement a compelling investment proposition. While a new location may need to design its own initial BPO attraction strategy through its public sector agency, a government-dictated approach over the long-term simply will not work. The private sector must help drive the direction.
  4. Limit political interference – realistically, any government-sponsored investment promotion agency is subject to political decision-making. This can range from executive appointments through to more drastic decisions such as the decision by the AMLO administration to cancel ProMexico. However, operational management should aim to keep the politicians at arms’ length. One major concern that outsourcers have upon entering a new market is the extent to which political personalities or changes in a political environment will impact potential investments. Running a strong investment promotion agency requires resistance to political maneuvers, much in the spirit of Sir Humphrey Appleby.
  5. Be visible and active – finally, economic development agencies need to invest the time and resources to attract prospective investors. Just hosting a webinar and emailing slide decks to BPO executives does not work. Moving into 2023, there is an expectation that investment promotion agencies will be present at major events and that these same bodies are willing to invite potential outsourcing investors into their jurisdictions. Without visibility, the investment will not materialize.

Image from Deb Beatty Mel  used under creative commons licence