Free State
South Africa
Sector
Call Centres & Business Process Outsourcing (BPO)
The South African government has committed itself to growing the Business Process Outsourcing & Off-shoring (BPO&O) sector as part of its Accelerated and Shared Growth Initiative (ASGI-SA), ideally outside of the traditional cluster of Cape Town, Johannesburg and Durban.
The government highlighted the BPO&O sector as a priority job expansion sector for South Africa, with a recent survey suggesting that there is US$90-US$175m in real foreign direct investment (FDI) that the country as a whole has the potential to attract.
As a result, the Free State is looking to attract a significant portion of BPO&O sector FDI coming into the country. It is envisaged that the sector could create approximately 8,000 (3,000 direct, 5,000 indirect) new jobs in the Free State by 2011.
Why the Free State is a preferred BPO&O investment destination:
The Free State Investment Promotion Agency is working to attract BPO&O investment into the Free State, and has highlighted key reasons why the Free State is the right choice for potential investors.
- Rental costs lower than those of Johannesburg and Cape Town.
- Labour costs which are lower than those in Cape Town and Johannesburg.
- Convenient accessibility from Johannesburg.
- Appropriate supporting infrastructure on a par with both Johannesburg and Cape Town in sophistication and reliability.
- Flexible rental policy for under-utilised business premises (warehouse, factory and office space) in some parts of the province
- Lower industry density which provides for greater accessibility to certain skill sets.
- English, Sotho, Tswana and Afrikaans language skills are readily available.
- Neutral English accents
- Availability of young unemployed matriculants and graduates
Resources in the Free State:
The Free State makes an ideal destination for BPO investment, with a number of potential sites having already been identified for call centre locations, including industrial parks, unused government and business buildings, as well as vacant land.
In addition, the province also has a well-educated population, which is available to be utilised by any incoming investors.
- The Free State has two universities – University of the Free State and the Central University of Technology –as well as several further education and training (FET) colleges.
- The province also has some of the country’s best private and public high schools comparatively speaking.
- There are also a significant number of unemployed graduates, and database in this regard will be compiled. It is envisaged that Call Centre operators in the province are not likely to view skills as a potential constraint.
- The DTI, through the Department of Labour and relevant SETA’s, have packaged and are financing BPO/Call Centre skills development programmes.
Target markets:
The BPO market encompasses all sectors, though in South Africa financial services comprises the largest part of the call centre industry. The Free State Investment Promotion Agency is targeting the following markets:
- Banks
- Insurance
- Cellphone industry
- Medical Aid
- Transcription (Medical, Legal, etc)
- Government Services (Transport, Health, Social Services, Home Affairs, etc)
- Municipality Services (Sewage, Traffic, Water, etc)
The Free State Investment Promotion Agency is also targeting BPO investment from three key continents:
- North America (time zone - different)
- USA
- Canada
- Europe
(time zone - same)
- Central Europe
- Asia (market saturation)
- India
- Philippines
Incentives for BPO&O investment:
In 2007, Trade & Industry minister Mandisi Mpahlwa launched the Government Assistance and Support Programme (GAS), outlining a number of key incentives to attract foreign BPO investment into South Africa.
The BPO Investment Support Grant is designed to attract BPO&O investment that creates employment opportunities and is offered to local and foreign investors establishing projects that aim primarily to serve offshore clients.
The Training and Skills Support Grant is directed towards the cost of providing company specific training, and is separate from any assistance obtained through the Sector Education and Training Authorities (SETAs).
To find out more information on these incentives, visit the BPO Government and Assistance Support Programme incentive page.
For more information about BPO investment, contact the Free State Investment Promotion Agency:
Name: Lesley-Anne Welman
Tel: +27 51 410 0885
Email: lesley@fipa-sa.co.za
