Analysis of the IT Sub-sector in Dominica

Report - Analysis of IT Sub-sector in Dominica Final Report EXECUTIVE SUMMARY The Dominica government has identified the Information Technology subsector as an area to be pursued for further economic diversification. The Information Technology industry is that area of economic activity in which modern computer and telecommunications technologies are combined with appropriate human resource skills to provide a wide variety of business and personal services. Many offshore locations have deliberately positioned themselves to attract this industry by systematically creating an enabling environment characterised by – 1. 2. 3. 4. 5. high quality telecommunications, reliable and stable electricity service, high quality accounting, legal, banking and other services, a skilled workforce, and a generally welcoming and facilitating environment. At all levels in Dominica there is a keen interest in information technology. Both government and the private sector are committed to the view that the Information Technology industry is the primary option for economic transformation, especially in light of the daunting prospects for the banana industry. However, there is as yet no policy on the industry, nor any planning nor organisation for its development. International Business Companies (IBC’ involved in the information s) technology sub-sector did not see Dominica as being facilitating to foreign investment. Nevertheless, the IT industry in Dominica currently consists of some 19 firms of which 15 are foreign owned. Prepared by Henderson B. Holmes for The National Development Corporation of Dominica Page i of iv Report - Analysis of IT Sub-sector in Dominica Final Report In this context, the Dominica foreign investor presence runs contrary to the norm. The high up-front government fees along with the absence of any setting-up assistance, the lack of appropriate workspace, and the consequential substantial expenditure for leasehold improvements, would normally be considered disincentives to foreign investment. We should also add to this list an electricity service that is considered so unreliable and unstable that firms have to install generating and stabilising equipment if they want to be assured of a constant and clean supply of power. It is significant that two-thirds of the existing firms are in internet gaming (casino or sports betting). This is reputed to be a very lucrative business which is however, not allowed in North America and is accordingly happy to find a welcoming location close to home. The perception that Dominica provides a shelter from the scrutiny of tax and regulatory institutions in North America was given as the main reason for the presence of these operations. The IT industry in Dominica is currently well served in one of the key requirements for success. It has providers of high quality, reliable telecommunications services. Despite concerns about the prices of these services, there is no evidence that, by themselves, they constitute a deterrent to foreign investment. However, it is conceivable that lower rates should attract more business. The country is also reasonably well served in the area of its human resources. It has an available workforce with appropriate entry level training for a wide range of IT services excluding those that require programming skills. This area of training needs to be addressed urgently if Dominica is to be positioned to attract the Prepared by Henderson B. Holmes for The National Development Corporation of Dominica Page ii of iv Report - Analysis of IT Sub-sector in Dominica Final Report higher value-added business with better paying jobs. Training of support technical personnel must also be addressed. The Government of Dominica needs to develop a policy on the IT industry. Specifically, it must indicate the nature of the industry it wishes to create. How it envisions or defines the local IT industry will have implications for its future development. The statement of policy will identify the kinds of business the country will seek to attract, and will be a guide to the skills it will need to develop, the nature of its incentives and the thrust of its promotion programmes. It should also answer important questions such as what benefits the country expects to derive from this industry? The agency, which is to take full responsibility for the development of this industry, must be identified, empowered and made accountable. The NDC appears to be the logical choice for the role and will have to adopt a proactive approach to generating business in this sector. A strong promotional presence in the primary market is indicated. Ultimately, Dominica’ success in the IT industry can only be assured s through a smart partnership approach in two dimensions: (a) All the stakeholders must be involved in the process. Ongoing and comprehensive relationships and communication between the telecommunications providers, DOMELEC, the commercial banks, the accounting and legal professions, the IBU and other relevant government Ministries/Departments should make for a wellcoordinated development effort; (b) There must be a deliberate strategy to develop local businesses to take advantage of joint venture and outsourcing opportunities. Prepared by Henderson B. Holmes for The National Development Corporation of Dominica Page iii of iv Report - Analysis of IT Sub-sector in Dominica Final Report Recommendations for implementation in the period 2000 – 2001 have been included as an important component of this Report. These Recommendations are for the development and strengthening of the island’ economic development institutional s framework and for the development of the enabling environment, generally. The proper implementation of these recommendations would result in the creation of: ?? an environment that can support and ensure profitable investments in the IT sub-sector, ?? ?? a sound professional team for promotion and facilitation, and the institutional linkages, and the high level of cooperation that would ensure a welcoming environment for foreign investors Prepared by Henderson B. Holmes for The National Development Corporation of Dominica Page iv of iv Report - Analysis of IT Sub-sector in Dominica Final Report I. INTRODUCTION The National Development Corporation (NDC) of Dominica has identified the Information Technology (IT) Sub-sector as a focal area for the prudent diversification or restructuring of the Dominica economy. The NDC sees the need to develop a comprehensive strategy to influence and enhance the mutually beneficial participation of appropriate stakeholders in the Information Technology Sub-sector. In pursuing these objectives the NDC thought the development of a “Situational Analysis on Information Technology and matters related thereto” a primary component of the exercise. On the basis of a proposal submitted, and with financial assistance from the Caribbean Development Bank (CDB), the NDC engaged the services of a group of consultants comprising Mr. Henderson Holmes, Mr. Freddie Harding and Mr. Vancourt Rouse to carry out this assignment according to the agreed Terms of Reference which were to:(a) Review the immediate past and current performance of companies involved in the Information Technology. (b) Assess the status, price and quality competitiveness of Telecommunications service providers. (c) Evaluate the adequacy of workspace available for Information Technology business and related developmental programmes. Prepared by Henderson B. Holmes for The National Development Corporation of Dominica Report - Analysis of IT Sub-sector in Dominica Final Report (d) Examine and analyse the training programmes in support of Information Technology. (e) Evaluate the investment promotion strategies aimed at attracting domestic and foreign firms to the Information Technology Subsector. (f) Identify and evaluate any other impediments to the development of the Information Technology Sub-sector in Dominica. (g) Recommend strategies and initiatives for the sagacious development of the Information Technology Sub-sector. All research work on this assignment was conducted by Mr. Henderson Holmes, while Messrs. Harding and Rouse contributed to project design, analysis of findings and report writing. The assignment got underway on July 25, 2000. The research was conducted mainly in Dominica and, in accordance with the Terms of Reference that the work be done with specific reference to St. Lucia, St. Kitts and Barbados, two (2) days each were spent in St. Kitts and St. Lucia, and relevant information was collected in Barbados, the home base of the consultants. This report presents the diagnostic findings of the research undertaken and makes recommendations for the sustainable development of the Information Technology Sub-sector in Dominica. Prepared by Henderson B. Holmes for The National Development Corporation of Dominica Page 2 of 45 Report - Analysis of IT Sub-sector in Dominica Final Report II. APPROACH AND METHODOLOGY The consultants adopted a pragmatic, hands-on approach to the assignment, placing considerable emphasis on the direct interaction with stakeholders in the sub-sector in Dominica, St. Lucia, St. Kitts and Barbados. Secondary data/research was also used to complement direct contact and discussion. In order to achieve the stated objectives, the consultants engaged in the following activities:(a) Discussions, with the Prime Minister, selected Government Ministers, and the NDC management to clarify the national policy and objectives relating to the Information Technology Sub-sector, and to gain insights into the past and current performance and perceived potential of the sub-sector. (b) Interviews with:?? key NDC personnel as well as personnel in the various Ministries involved in the overall development and operational aspects of the sub-sector; investors, entrepreneurs and managers of existing information technology firms; key personnel at education and training institutions (public and private sector); telecommunications and electricity services providers; other relevant public and private sector bodies and individuals. ?? ?? ?? ?? (c) Site visits to actual locations of identified existing information services firms and other related office/industrial accommodation. Prepared by Henderson B. Holmes for The National Development Corporation of Dominica Page 3 of 45 Report - Analysis of IT Sub-sector in Dominica Final Report (d) Review of available documentation on incentives, relevant legislation and requirements for establishing businesses, including the draft Telecommunications Act. 2000 for the Commonwealth of Dominica. (e) Review of previous studies done by Miriam Jacobs and The Chicago Group entitled “Report on the Informatics Industry in the Commonwealth Caribbean” and “Diagnostic Evaluation of the Enabling Environment for Informatics in the Commonwealth of Dominica”, respectively. (f) Two-day visits to St. Lucia and St. Kitts to conduct interviews with relevant Government personnel, the telecommunications and electricity services providers, and available managers/representatives of Information Technology firms. In St. Kitts the meeting with the electricity company was canceled after the consultant arrived at the office because the Operations Manager had been summoned to an urgent meeting. (g) Review of relevant information on the Barbados IT Sub-sector. The conduct of the interviews was facilitated by “Interviewer’ Guides” s developed by the consultants. See APPENDIX A. Prepared by Henderson B. Holmes for The National Development Corporation of Dominica Page 4 of 45 Report - Analysis of IT Sub-sector in Dominica Final Report Throughout the research phase contact was maintained with key NDC personnel assigned to facilitate and monitor progress on the work being done. The consultant met with the Quality Circle selected by the NDC at the beginning of the assignment and once again while work was in progress. Prepared by Henderson B. Holmes for The National Development Corporation of Dominica Page 5 of 45 Report - Analysis of IT Sub-sector in Dominica Final Report III. OVERVIEW OF THE INFORMATION TECHNOLOGY INDUSTRY We offer a definition of the Information Technology Sub-sector to aid understanding of the ensuing analysis and recommendations. The Information Technology Sub-sector, or industry, refers to that area of economic activity in which computer and telecommunications technologies are combined with appropriate human resources to provide a wide variety of business and personal services to customers worldwide. The services of this sector range from data entry, or data capture, at the lower end, to software engineering at the upper end. They include, but are not limited to – ?? ?? desktop publishing, typesetting, computer-aided design (CAD) and geographical information systems (GIS), ?? ?? ?? ?? ?? ?? ?? call centre operations, web hosting, internet gaming, insurance claims processing and adjudication, bill payments, medical transcription, and software development. These business activities vary in task complexity and in their human resource and telecommunications and other technology requirements, with the higher value-added services being more demanding in terms of skills requirements and Prepared by Henderson B. Holmes for The National Development Corporation of Dominica Page 6 of 45 Report - Analysis of IT Sub-sector in Dominica Final Report technologies. In the case of the software development business, investors would be more comfortable in a location which has effective laws for the protection of intellectual property rights. Dominica, like the rest of the region, is currently working on strengthening its legislation in this area. The industry is seen as being very clean and environmentally friendly. Because of its challenging tasks and the pleasant and congenial environment in which the work is conducted, this industry is particularly attractive to a young intelligent workforce. Table 1 shows the major areas of opportunity in the IT industry and the requisite skills and other resource requirements for their successful pursuit. Prepared by Henderson B. Holmes for The National Development Corporation of Dominica Page 7 of 45 Report - Analysis of IT Sub-sector in Dominica Final Report Table 1 Opportunities Software Engineering Environment Solutions – oriented. Mission critical customer applications. Creative. Skills and Other Needs Computer Aided Design (CAD)/Geographical Information Systems (GIS) E-Commerce Web Hosting Medical Transcription Voice-Centre Operations (Call Centres) e.g. telemarketing, help desks Insurance Claims Adjudication Text Editing, Abstracting and Coding. Desktop Publishing, Typesetting Data Entry/Capture Programming skills (C,C++,HTML, Java, Visual Basic, Visual C++ etc.). Intellectual property protection. High bandwidth communications service. Computer mapping for utilities and other Engineering background. specialised customers with widely Vectorizing and digitizing Skills. deployed equipment or other assets. High bandwidth. Solution-oriented. Web site creation and Programming (C, C++, HTML, functionality. Java, Visual C, etc.) Highly reliable service. Guarantee of High bandwidth, reliable data security. line/circuit. Transcribing doctors’accounts of “O” level Biology or paramedic patients’condition and medical training, and good typing skills. procedures from audio tapes. Reliable and affordable dial-up Quick turnaround. telephone service or a leased circuit. May be incoming or outgoing. Good telephone and English Real-time. Language skills, patience. A good general education . Reliable and affordable dial-up telecommunications service. Insurance claims in paper or images Natural Science background, online. Decision-making on amount to be English Language and paid on claims submitted. Mathematics along with 4 to 5 day turnaround. typing/keyboarding skills. Dedicated leased circuit >256k. Editing keyed text. English Language to at least “A” Creating abstracts from published level or Associate Degree. articles to create pointers to information Dedicated leased circuit < 256k on a given subject. bandwidth. Custom printing and publishing. Knowledge of desktop Keying of manuscripts.. publishing software, English Language, Typing. Efficient mail service. Forms e.g., reader subscription coupons, Good general education and credit card applications, insurance efficient keyboarding skills; claims. Paper/image. Batch or on-line minimum 8,000 keystrokes per processing. Same day to 48 hr. hour. Mail service or data circuit turnaround. >256K. Prepared by Henderson B. Holmes for The National Development Corporation of Dominica Page 8 of 45 Report - Analysis of IT Sub-sector in Dominica Final Report The IT industry is highly mobile because intense competition is perpetually driving firms to find ways to offer their customers lower cost solutions without compromising quality. Hence, since the 1960’ many countries have embarked on strategies to s, position themselves as alternative locations capable of supporting the industry as well as it is supported in the industrialised world at significantly lower costs. Among the locations which have built an admirable reputation for attracting investments in this industry are Ireland, India, Israel, the Philippines and Mexico. In the Caribbean region Jamaica, the Dominican Republic, and Barbados have also had significant success. Positioning for competitive advantage in this industry requires a country to systematically develop the skills of its workforce so it can provide the human capital required by this knowledge-based business activity. It must also offer state-of-the-art telecommunications services at competitive prices, a reliable and stable electricity service, competent and efficient legal and accounting services, and a congenial supportive general infrastructure. Specific strategies for attracting business in these areas would be a major component of a detailed Business Plan for the development of the sector. Prepared by Henderson B. Holmes for The National Development Corporation of Dominica Page 9 of 45 Report - Analysis of IT Sub-sector in Dominica Final Report IV. 4.1 ANALYSIS OF DIAGNOSTIC FINDINGS THE I NFORMATION TECHNOLOGY SUB-SECTOR IN DOMINICA The IT industry in Dominica is quite young. The oldest firm on the island started operating four (4) years prior to this research. Yet the sub-sector shows an interesting diversity of activities and ownership. There are nineteen (19) firms known to be operating in this industry. Two (2) are local, two (2) are joint ventures involving local and foreign ownership, and the remaining fifteen (15) are foreign-owned. See Table 2 below. The local firms provide services in web design, graphic arts, and computer-aided drafting, and their customer base is currently 100% local and regional. The joint ventures and the foreign-owned firms provide services exclusively to foreign customers. Their services include data capture, internet gaming (sports book and casino activities), e-commerce website design and hosting, and foreign currency trading. Although it is not a major commercial venture at this time, the achievement of Financial Data Systems Ltd. deserves special mention. This company established by five (5) OECS development banks has created loan management software for development finance institutions with funding provided by the CDB. This package, called DPAC, is designed to integrate with the accounting software package, ACCPAC. This software is believed to be of interest to institutions in Latin America, Africa and the rest of the Caribbean. It is worth noting that the predominant activity in the sector is internet gaming with some thirteen (13) firms identified as being in that business. The Prepared by Henderson B. Holmes for The National Development Corporation of Dominica Page 10 of 45 Report - Analysis of IT Sub-sector in Dominica Final Report significance of this and the likely impact on, or consequence for, the future development of the sector will be discussed in the section of this report which deals with “Policy”. Neither Barbados nor St. Lucia allows internet gaming operations and it is interesting that in discussions with Dominica and St.Kitts development authorities neither readily mentioned nor recognized internet gaming as part of the IT sector. In fact, in the OECS Progress Report on the Informatics Project, St. Kitts is reported as having two “(2) operations in Information Technology”. Our research revealed that there are in fact two (2) mainstream IT companies and eight (8) internet gaming companies. From available information it is estimated that the IT sub-sector in Dominica is currently providing employment for approximately 350 persons and generating recurrent foreign exchange revenues of approximately US $0.5 M per annum. Table II gives a profile of the IT sub-sector in Dominica with regard to ownership, number of firms, employment and activities. Table 2 Ownership Local Joint Ventures Foreign No. of Firms 2 2 15 Employment 14 92 244 Activity Graphic arts/design Data capture and text editing Internet gaming, E-commerce and hosting web-sites TOTAL 19 350 Prepared by Henderson B. Holmes for The National Development Corporation of Dominica Page 11 of 45 Report - Analysis of IT Sub-sector in Dominica Final Report 4.2 TELECOMMUNICATIONS The principal telecommunications services provider in Dominica is Cable and Wireless (C & W) which features in this role throughout the English-speaking Caribbean where it generally enjoys monopoly or near-monopoly status. However, unlike in the rest of the Eastern Caribbean, it is being challenged by MARPIN Telecommunications & Broadcasting Co. Ltd. (MARPIN) a locally owned company which is also offering a range of telecommunications services. MARPIN has been operating the cable TV service across the island since 1982, and from 1999 it also provides a cable modem internet service and a telephone service on its cable network. MARPIN currently has about 14,000 cable TV subscribers and about 600 telephone subscribers compared with C & W’ approximately 24,000 for s the latter category of subscribers. Already MARPIN is seriously competing with C & W in the provision of high quality data and voice services. This locally owned company is adopting an aggressive approach and undertaking strategic initiatives with regard to new equipment installations by early 2001 and expansion of its reach and range of services. This, coupled with the OECS and Dominica Government’ commitment to open competition in telecommunications augur s well for the development of the IT industry. Nevertheless, at this stage Cable & Wireless is still the company on the island most capable of delivering the various types of technologically sophisticated connections and services IT businesses require. Prepared by Henderson B. Holmes for The National Development Corporation of Dominica Page 12 of 45 Report - Analysis of IT Sub-sector in Dominica Final Report MARPIN’ services include cable modem internet access, and dedicated s E1 lines and circuits (or fractions thereof). Cable and Wireless services include dial-up internet access, dedicated leased lines/circuits (T1 / E1 or fractions thereof), Frame Relay, Digital Subscriber Lines (DSL). 4.2.1 Telecommunications - Quality C & W’ service was assessed as being very good and very reliable. The s company’ ability to maintain a high standard of service obtains from its vast s experience in telecommunications and its access to the resources required to ensure maintenance of an infrastructure that can always deliver modern telecommunication services. Because MARPIN is relatively new to the voice and data services a reliable assessment of the quality of their service could not be made but their determination to carve out a niche in the local telecommunications industry gives the assurance that they will strive for excellence in their execution. The Cable and Wireless Dominica infrastructure comprises a network of stations linked by fibreoptic cable and backed-up by a digital microwave link. Voice and data traffic out of Dominica are carried to the rest of the world by way of the Eastern Caribbean Fibre Service (ECFS) backed-up by the Eastern Caribbean Microwave System. MARPIN’ traffic out of Dominica is carried via Intellsat and s arrangements are being made for fibre cable service through Americas 2 and the ECFS. Prepared by Henderson B. Holmes for The National Development Corporation of Dominica Page 13 of 45 Report - Analysis of IT Sub-sector in Dominica Final Report 4.2.2 Telecommunications - Capacity One area of concern was whether C & W Dominica has the capacity going out of the country to support increased demand as the IT industry expands. C & W representatives advised that because of the high cost of telecommunications infrastructure their policy is that installed capacity should be timed to keep pace with known demand. The C & W capacity in St. Lucia and St. Kitts was not questioned. Perhaps because there are no IT companies in St. Lucia except for two (2) Call-centres run by C&W to market their services and provide support for their cellular service, and there are only ten (10) IT operations in St. Kitts. However, in the case of Barbados where there are currently about forty-four (44) IT companies there have been complaints of transmission difficulties due to limited capacity at peak demand. C & W’ response to this matter is that there have been no proven claims s of under-capacity in the C & W plant and that in most cases where customers complain of congestion causing transmission difficulties, the customer’ s line/circuit was not adequate for the volume the customer was handling. In any event, C & W gave its assurance that as a matter of policy it follows the industry standard, which is to maintain capacity at a level where demand does not use more than 80% of the available bandwidth. In fact C & W informed that they are currently in the process of upgrading capacity throughout the region having already secured additional bandwidth on Americas 1, and soon Americas 2. This will supplement the already substantial Prepared by Henderson B. Holmes for The National Development Corporation of Dominica Page 14 of 45 Report - Analysis of IT Sub-sector in Dominica Final Report capacity on the ECFS and make the service throughout the region even more reliable by providing both Northern and Southern routes for international traffic. It is important to recognise that the telecommunications service providers are direct beneficiaries of growth and expansion in the Information Technology industry. Thus, they are normally readily responsive in their role of providers of effective and efficient telecommunications solutions for IT customers. They are therefore disposed to a working partnership with government towards the development of the industry. Cable & Wireless Barbados Limited working in harmony with the government’ development agency, is one of the main reasons s for Barbados’success in the IT arena. Cable & Wireless Dominica indicated that some time ago it communicated its interest in assisting government with the development of the IT sector. Up to the time of this project it appeared that this had not yet been effected. It is strongly recommended that, without prejudice to any decision or policy the Government plans to pursue, a close relationship between itself, C & W and MARPIN should be immediately forged so that both telecommunications companies would be involved from the planning stage of the development of this industry. Prepared by Henderson B. Holmes for The National Development Corporation of Dominica Page 15 of 45 Report - Analysis of IT Sub-sector in Dominica Final Report 4.2.3 Telecommunications -Price Table III C & W Dial-Up Service (US$) Dominica O’ seas (Per Min.) USA Day 1.20 Evening 1.00 Weekend 0.74 Canada Day 1.24 Evening 1.11 Weekend 0.85 Barbados St. Lucia St. Kitts MARPIN 1.35 1.15 1.15 1.35 1.21 0.98 1.18 1.00 0.73 1.18 1.00 0.73 N/A N/A N/A N/A N/A N/A 0.95 0.95 0.72 0.95 0.95 0.72 Table IV C & W Data Circuits (US$) Service 512K Dedicated Circuit Frame Relay (512K Port, 192K Circuit) Dominica 20,800 5,414 Barbados 14,400 5,480 The major area of concern was the prices charged for C & W’ services. s There is a general perception that C & W’ monopoly position is a major s factor in the pricing of its services. However, it should be considered that the quest to maintain modern telecommunications services in an industry of rapid technological change could be an even greater influence on pricing. To meet the challenge of being always in a position to provide up-to-date services, telecommunications companies typically seek to recover capital costs over a short operating period. In the small markets of the Caribbean the dilemma Prepared by Henderson B. Holmes for The National Development Corporation of Dominica Page 16 of 45 Report - Analysis of IT Sub-sector in Dominica Final Report is created in which telecommunications providers are seeking to maintain services comparable to the rest of the world, in range and quality, while trying to meet the consumers’demands for lower rates. This will continue to be a major factor even in the anticipated environment of open competition. The cost of C & W’ local dial-up phone services vary from island to s island and are routinely compared to rates in the US which are substantially lower. Table III gives a comparison of the charges in Dominica (including MARPIN’ and the islands of reference for this study. s), The rates for dial-up services are important in determining the ability to attract Voice-center operations, also known as Call-centres, such as Telemarketing and Help Desks. These are large volume users operating on the public switched telephone network (PSTN). They will typically have a North American or European customer base and will therefore be very sensitive to the rates for calls to those destinations. North American firms in this business are accustomed to negotiating attractive rates with their telephone service providers on the basis of a guaranteed volume of calls, usually measured in minutes per month. C & W in Barbados has shown itself sensitive to this issue and therefore amenable to negotiating rates with prospective investors. Barbados currently has three (3) North American owned Call-centres. The prices of C & W data lines have been referred to by many of the government officials interviewed as a major deterrent to foreign investors setting up IT businesses in Dominica, or local entrepreneurs considering providing Prepared by Henderson B. Holmes for The National Development Corporation of Dominica Page 17 of 45 Report - Analysis of IT Sub-sector in Dominica Final Report services to foreign customers. It would be unfortunate if this sentiment is allowed to thwart aggressive efforts to develop this sub-sector, since telecommunications constitute only one cost element. Investors make their decisions based on the cost profile of the location taking account of all costs to determine whether there is a sufficient attraction in terms of savings. Also, the issue of the cost of dedicated leased circuits is somewhat complex. Assessment must go beyond the rates or tariffs for a given service and look at user and usage along with how the cost compares with international charges for the same service. The higher the value-added in the IT service provided and the higher the volume of work sent along the line, the less significant the cost becomes. For example, for a firm providing high value software engineering solutions such as PRT in Barbados, the price of a T1 line in the region is less of a factor in its total cost than it would be for a data entry firm such as Caribbean Data Services in Dominica or CAST Information Processing Services in Barbados. It should also be noted that from the Barbados experience in many cases the cost of the North American portion of the lease circuit is higher than that of the local portion. This is because the North American providers charges are based on the distance of the facility (customer) from the Point of Presence (POP). In the case of one firm in Barbados the cost of the overseas portion of the circuit was one and a half times the local portion, while another firm was paying almost twice as much for its overseas portion of a 512K circuit. This is not meant Prepared by Henderson B. Holmes for The National Development Corporation of Dominica Page 18 of 45 Report - Analysis of IT Sub-sector in Dominica Final Report to suggest that current rates are acceptable or ought not to be lowered, but only to put the pricing of leased circuits in perspective. It should also be noted that even though the cost of T1 lines (1.544 mbs) is frequently used as a reference, few IT companies have a need for such high bandwidth. Substantial revenue can be generated in an efficient operation using a fraction of a T1 line, perhaps no more than 64 - 128 kbs. Furthermore, IT companies do not necessarily need to use dedicated leased circuits; they may choose a Frame Relay service instead. This is a globally managed data network on which communication capacity is offered at a fraction of the cost of a dedicated leased line. Most IT operations will only occasionally use the full capacity of their lines. This means that with a dedicated line some operations can be paying for capacity they rarely need. The frame relay service allows a company the privilege of paying for service based on the capacity it expects to use regularly, the Committed Information Rate (CIR), while having the option of using (bursting to) higher capacity when it is needed. Table IV shows a comparison of the monthly cost of a 512 K circuit and a comparable Frame Relay service in Dominica and Barbados. This costing is based on a Frame Relay service with a 512 K Port and a Committed Information Rate (CIR) of 192K. Efforts to obtain similar information for St. Kitts and St. Lucia were unsuccessful. The difference in the Dominica and Barbados prices for the dedicated line was not explained, but C & W Dominica informed us that they give IT customers deep discounts on data lines and circuits. Prepared by Henderson B. Holmes for The National Development Corporation of Dominica Page 19 of 45 Report - Analysis of IT Sub-sector in Dominica Final Report However looked at, the need to reduce the cost of telecommunications services and increase bandwidth cannot be overstated, since the higher the quality of the telecommunications services and the more competitive the price, the larger the number and types of IT companies that are likely to be attracted. To date, the telecommunications cost issue has been dealt with in Barbados through agitation by concerned persons and entities through newspaper articles and other public fora, but the Treaty establishing the Eastern Caribbean Telecommunications Authority (ECTA) is the most definitive move so far to end monopoly control of the telecommunications industry in the region. That Dominica has moved aggressively to document a Telecommunications Sector Policy and pass a new Act entitled the Telecommunications Act, 2000, is indicative of its commitment to ensuring it can participate in the new world economy which is characterised by telecommunications-sensitive activities such as Information Technology, and Financial, Services. According to the charters of the ECTA and the national regulatory bodies, they will ensure that there is fair competition in the telecommunications sector, and that the tariffs for services are cost related. They will also ensure there is inter-connectivity on reasonable terms in order to facilitate open and fair competition. 4.3 W ORKSPACE ADEQUACY Operations in the IT industry require A-class office space to carry out their business. Typically the workspace is complete with anti-static carpeting, finished walls, Prepared by Henderson B. Holmes for The National Development Corporation of Dominica Page 20 of 45 Report - Analysis of IT Sub-sector in Dominica Final Report adequate washroom facilities, dropped ceilings, parabolic lighting, and a floor-to-ceiling height capable of accommodating raised floors. A clean attractive environment is the standard for this industry, not only to provide comfortable working conditions conducive to workers comfort and high quality output, but also because the customers served by the industry routinely visit their vendors to observe how and under what conditions their work is being done. Image is therefore an important factor. The ability to deliver this standard of accommodation to prospective investors is an incentive in itself and could be a major advantage to an offshore location. At the time of this Study there was no evidence that Dominica was able to offer the IT business workspace even closely resembling what that industry is being offered world-wide. The Government-owned AID Bank Industrial Estates Unit is the principal provider of space for industrial projects. They provide basic shells with unfinished walls and floors, and no ceiling. Many of the Internet Gaming operations are located in AID Bank’ s Canefield Industrial Estate. Those interviewed reported having to spend considerable sums of money to create the office accommodation they now have. The expenditure was put at US $ 40,000 by one firm and US $ 50,000 by another. The willingness to incur that level of expenditure for improving facilities is not typical of foreign investors in the IT industry who can choose from alternative locations in the Caribbean and beyond. Internet gaming operations are not allowed in the Prepared by Henderson B. Holmes for The National Development Corporation of Dominica Page 21 of 45 Report - Analysis of IT Sub-sector in Dominica Final Report US and are welcome only in a few places in the Caribbean and elsewhere. The Dominica Government’ approval of internet gaming and similar operations therefore makes the s island very attractive to these businesses, and the leasehold improvement costs they incur is a small price to pay to settle an operation that is reputed to be very lucrative. There is also the perception among these companies that Dominica provides them protection from the scrutiny of North American tax and regulatory authorities. One investor stated that secrecy was important to the customers his firm serves. Offshore Data Inc. and Caribbean Data Services operate from space provided by private landlords in downtown Roseau. The space is very basic and well below the standard acceptable for the IT industry. Barbados, Jamaica, and Dominican Republic are countries in the region where state-of the-art facilities are provided for the IT industry. Dominica, like St. Lucia and St. Kitts, is considering creating purposebuilt facilities for IT operations. Dominica’ AID Bank Industrial Estates Unit indicated that it is s developing plans for constructing facilities in a new Caribbean Development Bank (CDB) funded estate specifically designed for IT operations. This is a step in the right direction towards providing adequate workspace for the IT sub-sector. The CDB loan agreement will have the condition that the space must be offered at economic rental rates. Other countries using CDB funds for this purpose have found economic rents unattractive to investors and have opted to charge lower rents to Prepared by Henderson B. Holmes for The National Development Corporation of Dominica Page 22 of 45 Report - Analysis of IT Sub-sector in Dominica Final Report avoid scaring away prospective investors. This may require seeking alternative sources of financing such as issuing National Development Bonds on the local and regional markets. The design and location of the Estate for IT should seek to create a setting which uses Dominica’ nature island character and landscape to good effect bearing in s mind that IT is an environmentally friendly business activity. This in itself could be an incentive for a foreign investor to choose Dominica. 4.4 TRAINING PROGRAMMES IN SUPPORT OF IT There are four (4) private schools providing training for the IT industry. The principals of the Business Training Centre and the School of Typing and Computing were available for interviews. These schools offer training in keyboarding, Microsoft Software applications, programming, and networks. The Business Training Centre also offers Microsoft Certification courses to provide basic network administrator and hardware technician skills. No institution is offering more advanced training in this important technical support area. The Academic Studies Division of the Clifton Dupigny Community College includes computer training in its secretarial programme conducted in a “training office” equipped with eight (8) PCs. There is as yet no IT training programme at the college but as of September 2000 it is planned that all Certificate programmes will have 60 hours of IT and the diploma students will do 90 hours. This will comprise word processing and spreadsheet analysis at the Certificate level, and application software in addition, at the Diploma level. Prepared by Henderson B. Holmes for The National Development Corporation of Dominica Page 23 of 45 Report - Analysis of IT Sub-sector in Dominica Final Report The Youth Skills Training programme provides training in basic computer and keyboarding skills, Microsoft software, and computer maintenance. The students of this programme are not subjected to any recognised testing standard. There is an understanding that the Government intends to make IT a part of the schools curriculum and it may be occurring in some schools on a limited basis but is generally forestalled by the lack of computer equipment. Training for the IT industry aside, in today’ world computer literacy is a requirement for all who wish to be fully s functional in their professional and personal lives. It is therefore imperative that a carefully planned and implemented program for the schools materialise as soon as possible. The training currently available will satisfy the entry level requirements of the lower end of the IT industry i.e. data entry. Combined with a good academic achievement level, it would also be adequate for the entry level of the next round of IT activities such as insurance claims adjudication, text editing, abstracting and indexing, and medical transcription. However, there is no training currently being offered in programming in the widely used languages such as C, C++, Visual C++, Visual Basic, HTML, and Java. These are required for the services offered at the high end of the industry; such services include hosting web-sites for e-commerce activities, and software engineering. In delivering training in these languages it is imperative that the services of practicing programmers rather than career teachers alone, be involved. This will ensure that the training is always current or consistent with the needs and practices in the industry. Prepared by Henderson B. Holmes for The National Development Corporation of Dominica Page 24 of 45 Report - Analysis of IT Sub-sector in Dominica Final Report There are individuals on the island with skills and experience in these languages whose services should be utilized in the development of training initiatives. Some of these persons are Dominicans who were trained and worked overseas and others are expatriates in the offshore sector. When, interviewed these individuals unhesitatingly expressed their willingness to assist. 4.5 INVESTMENT PROMOTION STRATEGIES In evaluating the investment promotion strategies we look at policy in relation to the development of the IT industry, incentive programmes, the administrative framework for encouraging and facilitating the setting up of businesses, and promotional activities in the target markets. 4.5.1 Policy re Development of the IT Sub-sector From the Ministerial political level through to those interviewed in both the public and private sectors, there is clear evidence of an awareness of the potential of the IT Sub-sector and a shared commitment to the view that this is an inevitable path for transforming the Dominica economy. Nevertheless, there is no clearly defined policy to provide guidance in the formulation of an IT development strategy. Without a policy which defines the character of the IT Sub-sector Dominica wishes to develop, it appears that it is willing to accept any or all types of IT activities and the country’ IT Sub-sector s as it stands may give that impression. There could be dangers in not being selective in an industry whose growth depends upon foreign investors especially from North America. The more reputable North American firms/investors evaluating an offshore location to Prepared by Henderson B. Holmes for The National Development Corporation of Dominica Page 25 of 45 Report - Analysis of IT Sub-sector in Dominica Final Report establish a business seek to find out who or what firms are there already. The presence of a reputable and well-known company can turn the decision in favour of the location. On the other hand the presence of businesses perceived as shady, or not so reputable, can render the location unattractive. Most countries have therefore been selective and deliberately associate only with those companies and types of businesses that would enhance their reputation as an offshore location. 4.5.2 Incentives Programme for IT Sector There is no programme purposely designed for providing incentives to the IT industry. The firms which have been set up have been given tax and duty concessions either through the Fiscal Incentives Act, or the International Business Companies Act accompanied by an Agreement. The requirements for establishing a business by either of these routes are time consuming and do not suggest that the country is in a mode of facilitating business development. There seems to be a preoccupation with procedures which may need to be revised with a view to making them more business friendly. This observation is elaborated in the report entitled “Diagnostic Evaluation of the Enabling Environment for Informatics in The Commonwealth of Dominica”, prepared by The Chicago Group, Inc. and Wolf, Arnold & Cardoso, P.C. The Fiscal Incentives Act was designed to provide incentives to the manufacturing or processing industries. The application requirements and the approval procedure under this Act are in accordance with the nature of manufacturing and processing operations but are unsuitable for the IT industry. Prepared by Henderson B. Holmes for The National Development Corporation of Dominica Page 26 of 45 Report - Analysis of IT Sub-sector in Dominica Final Report For example, it is understood why a manufacturing operation would be subjected to a value-added assessment to determine the period of incentives which would apply, but in the case of the IT operations which typically serve the export market, that appears to be totally irrelevant. From an examination of some cases, the approval of an application for Fiscal Incentives can take from one month to over a year. St. Lucia and St. Kitts also have no special legislation for providing incentives to the IT industry and do so by way of their Fiscal Incentives Acts whose provisions are identical to Dominica’ s. Dominica’ International Business Companies Act makes provision for a s company which is carrying on business exclusively with customers or clients outside of Dominica to be registered as an International Business Company (IBC). Prima facie, this legislation seems appropriate for granting incentives for both locally and foreign owned IT businesses, but the manner in which the Act is administered diminishes its otherwise investor friendly and facilitating character. Section 109 (1) of this Act provides the IBC with exemption “from the payment of taxes, duties, and similar charges for a period of twenty years from the date of incorporation”. Furthermore, Subsection (3) of this Section states that “The Registrar shall, on payment of the prescribed fee, issue a certificate of exemption for the purposes of Subsection (1) to a company entitled to the exemption”. All this suggests that the Act does not preclude an IBC from being an operating entity after it has been incorporated and paid the Registration Fee of US Prepared by Henderson B. Holmes for The National Development Corporation of Dominica Page 27 of 45 Report - Analysis of IT Sub-sector in Dominica Final Report $ 90. However, according to the current provisions, an IBC cannot carry on an active business in Dominica unless and until it completes the following:a) b) c) submits an application to the International Business Unit (IBU), signs an agreement with Government, undertakes to contribute to an environmental, health or educational project, and d) pays additional Registration and Annual fees as explained below. In addition to the Registration Fee an IBC is required to pay an annual fee of US $150. With the interposed Application and Agreement required for an IBC to carry on business in Dominica, the IBC must pay an additional Registration Fee of US $15,000 and an Annual Fee of US $50,000 (or 5% of Gross Revenues), if the company is an Internet Gaming or Sports Betting operation. Other operating IBCs are required to pay a Registration Fee of US $10,000 and an annual fee of similar amount. They are also required to purchase Treasury Bills in the amount of US $100,000 in the case of Gaming and Sports Betting companies and US $25,000 for other companies. In St. Kitts internet gaming companies pay a processing fee of US $2,000 per individual, a registration fee of US $80,000 and an annual fee of US $40,000. This could be an example of what the Chicago Group’ 1995 report is s referring to when it observes that “there is a tendency, as in other OECS Prepared by Henderson B. Holmes for The National Development Corporation of Dominica Page 28 of 45 Report - Analysis of IT Sub-sector in Dominica Final Report countries, to interpose requirements and regulations that are perceived as impediments to the free-flow of investments into the country”. The length of the approval process and the time it would take an investor to be operational is indeterminable especially because the due diligence done by the IBU and the checks done by the Ministry of Labour and Immigration in relation to Work Permit applications involve outside agencies such as Interpol. Both agencies would only say that they cannot say how long the process would take because it has to be sent overseas and there is no telling how soon they would receive a response. What is more is that there is no provision for an investor to set up his business once the project is approved and the only matters pending are those which relate to the investor’ character. s Barbados is an example of another Eastern Caribbean country seeking to attract IT business through its IBC Act. The Act is administered precisely in accordance with its provisions and makes the process of setting up an IBC very simple and fast. The investor can be in business as soon as his/her attorney completes the registration or incorporation of the business. The investor would be issued a short-term work permit while his long-term work-permit application is being processed in accordance with the Immigration Laws of Barbados. In Barbados an IBC pays an initial Registration Fee, and an Annual Fee of US $100 and corporation tax at the rate of 2.5 % (maximum) of Net Profits annually. Prepared by Henderson B. Holmes for The National Development Corporation of Dominica Page 29 of 45 Report - Analysis of IT Sub-sector in Dominica Final Report 4.5.3 Institutional Framework Efforts to develop the IT sector in Dominica will require the identification of the agency or unit which will take the leadership role and assume full responsibility for initiatives to develop and maintain an efficient and attractive enabling environment, develop local entrepreneurship, aggressively promote foreign investment, provide professional investor facilitation services, and ensure routine and helpful assistance to businesses after they have been set up. The administration of business development in Dominica appears disjointed especially as it relates to the offshore sector. Although the NDC considers that it has a cordial relationship with the IBU, the cooperation between the two units is not at the level required to facilitate effective development of the offshore sector. For example, there is no consistent nor formal communication between the IBU and the NDC regarding new IBC’ registered to conduct s business in the information technology sector. 4.5.3.1 Administration The IBU deals with the registration and regulation of offshore business. It was learnt that after these offshore businesses have been approved and have paid their fees they are very much on their own; not serviced by the IBU, the NDC nor any other official body. The offshore IT businesses interviewed reported not having any assistance nor guidance in setting up their operations, nor in dealing with the problems their expatriate personnel experienced in relocating to Dominica. In other words hand-holding, an important part of foreign investment promotion, is totally absent. One investor described the experience of setting up Prepared by Henderson B. Holmes for The National Development Corporation of Dominica Page 30 of 45 Report - Analysis of IT Sub-sector in Dominica Final Report his business as “horrible” and said it would have been worst if the DOMINI Corporation had not stepped in and helped them find their way around. The IBU is not a business development agency. It is a unit set up as an extension to the Ministry of Finance to carry out registry and regulatory functions in accordance with Section 10 Subsection (4) of the Offshore Banking Act which states “The Minister may in writing authorise any person by name or office to assist the Financial Secretary in the performance of his functions under this Act”. The IBU has neither the mandate nor the staffing to assume the role of a development or promotional agency. On the other hand the National Development Corporation is the sole agency with statutory responsibility “to stimulate, facilitate, and undertake the development of tourism and industry in Dominica”. The National Development Corporation (NDC) Act goes on to say that it shall be the duty of this Corporation to, inter alia, ?? promote, assist or undertake whether by itself or jointly with another person, the establishment or development of any industrial undertaking; ?? to adopt all measures it may think fit to advertise and publicise the island as a tourist resort and as a favourable location for industrial investment; ?? to advise on ways to improve the industrial climate of the island. As far as the consultants are aware there is no other agency on the island with similar responsibilities. It seems therefore that the NDC is the agency which Prepared by Henderson B. Holmes for The National Development Corporation of Dominica Page 31 of 45 Report - Analysis of IT Sub-sector in Dominica Final Report should take full responsibility for developing and promoting the IT industry and providing the facilitation service, regardless of how the investor may have found his way to the island. It seems therefore that it should be formally agreed that the IBU be required to communicate to the NDC, the details of new IBC’ registered to s conduct business operations in Dominica, as a matter of normal procedure. 4.5.3.2 Structure and Capability of NDC The NDC currently has only four (4) persons assigned to the Industry Division with responsibilities for tourism development projects, agribusiness, manufacturing and IT activities. NDC’ staffing and budget allocations suggest s that its main focus is tourism promotion, and in fact the organisation reports to the Minister of Tourism. In its current state it is obviously unable to assume the range of functions and tasks necessary for the development of the IT Sub-sector. The Corporation will therefore need to be restructured and staffed appropriately to enable it to assume full responsibility for a dynamic IT development programme. This will require a dedicated unit of business promoters and facilitators knowledgeable in the IT industry. 4.5.4 Promotional Activities The primary market for IT business is North America and the sources by which this business goes offshore are by way of direct investments, outsourcing to existing operations in an offshore location, or through joint ventures or other strategic partnerships with existing operations in an offshore location. Prepared by Henderson B. Holmes for The National Development Corporation of Dominica Page 32 of 45 Report - Analysis of IT Sub-sector in Dominica Final Report Any effective promotion strategy has to be part of a clearly thought out marketing initiative to exploit the opportunities in this industry through these various avenues. There is no evidence of a deliberate promotion strategy aimed at attracting domestic or foreign investment in the Information Technology Sub-sector. However, the NDC does have an ongoing working relationship with the Eastern Caribbean Promotion Service (ECIPS), based in Washington D.C, which pursues North American investments for the OECS countries. In association with ECIPS NDC attends one or two IT tradeshows per year. Effective promotion requires a more sustained presence in the market. The development of the specific objectives and strategies for an appropriate marketing programme is outside the scope of this assignment, but it is a natural follow-on initiative and is strongly recommended as an immediate requirement. 4.5.4.1 Local Involvement There is currently no programme for developing local participation in the IT industry. Locals who are involved have done so on their own initiative because of their exposure and understanding of the potential of the industry. 4.5.4.2 Attracting Foreign Investment The NDC has an ongoing working relationship with the Eastern Caribbean Investment Promotion Service (ECIPS), based in Washington, which promotes inward investments into the OECS. All inquiries of which ECIPS becomes aware are sent to all OECS countries without favour. Unlike St. Lucia, Dominica has no Prepared by Henderson B. Holmes for The National Development Corporation of Dominica Page 33 of 45 Report - Analysis of IT Sub-sector in Dominica Final Report national presence in the primary marketplace in terms of a person or persons assigned to investment promotion, or business development activities. The companies interviewed said they became aware of Dominica as a place for their business, either through a business colleague with some relationship to another offshore company, or through the DOMINI Corporation’ s web-site. From all reports the DOMINI Corporation has been doing a commendable job promoting Dominica as an offshore location. However the involvement of knowledgeable, professional government representatives in the offshore promotion efforts would assure the foreign investor of being welcomed in a way that a totally private sector effort would not. This is another opportunity for beneficial partnership in which the Government’ development agency can draw s on the experience of DOMINI and similar companies. An aggressive overseas promotion programme involving key strategic partners such as DOMINI Corp. is therefore suggested. 4.5.4.3 Promotional Strategy Dominica cannot boast of any special attributes which would be attractive to any particular segment(s) of the IT Sub-sector. India and Ireland are countries which are in such a position with respect to software engineering, and call centres, respectively. Therefore Dominica’ promotional strategy should be one in which its s message to the market consists of the elements of its business environment which would appeal to the investors in this industry. These would be such things as Prepared by Henderson B. Holmes for The National Development Corporation of Dominica Page 34 of 45 Report - Analysis of IT Sub-sector in Dominica Final Report quality of workforce, relevance of education programme, available incentives, ease of establishing a business, and the existence of high quality support infrastructure and services. The promotional strategy and activities must be understood to be only part of a comprehensive marketing plan a major component of which is product development. In this case the product is the country or those features of its environment which are important to investors. The specific promotional strategy would incorporate advertising in carefully selected media, attendance at appropriate tradeshows, seminars and conferences, effective use of the internet, direct mail, and any other activity which seems capable of delivering the message to the target market. The overall strategy should seek to encourage the involvement of the local investors. This may require a special programme which would include provision of appropriate space at concessionary rental rates, availability of development financing on attractive terms, access to government sponsored or subsidized professional business development services, and assistance with exploiting the target (overseas) market. 4.6 OTHER IMPEDIMENTS 4.6.1 Electricity One of the important requirements for the development of an IT Sector is the availability of reliable and high quality (clean) electricity at reasonable rates. In our research the Dominica Electricity Services (DOMELEC) did not score well on any of these. The service was described as being very unreliable and Prepared by Henderson B. Holmes for The National Development Corporation of Dominica Page 35 of 45 Report - Analysis of IT Sub-sector in Dominica Final Report its output subject to wide fluctuations. According to reports, there are frequent outages and the voltage can fluctuate between 205 and 250. This is very dangerous for the sensitive equipment used in the IT industry. There were many reports of severely damaged equipment including Uninterrupted Power Supplies (UPS). Some pieces of equipment were actually shown as evidence of the kind of damage done by sharp spikes in the electricity supply. One foreign investor reported losing US $167,000 in equipment through damage caused by the electricity service. To ensure reliable electricity, every offshore company made additional investments, averaging about US $ 20,000, in generating and voltage stabilising equipment, or shared such equipment with another firm. In comparison, St. Kitts, St. Lucia and Barbados provide very reliable and clean electricity supplies. It was also thought that the electricity is too expensive. As an indication of where the price stands, in Barbados industrial customers are billed at US $0.10 per KVA as opposed to US $0.21 per KVA in Dominica. The management of the Dominica Electricity Services (DOMELEC) agreed fully with the consumers assessment of its service. In fact the company informed that its capacity is insufficient to meet customer demand but its plans will place it in a position to exceed demand sometime in 2001. Every avenue to accelerate the upgrading of this service should be explored. Prepared by Henderson B. Holmes for The National Development Corporation of Dominica Page 36 of 45 Report - Analysis of IT Sub-sector in Dominica Final Report 4.6.2 Professional Services The availability of high quality professional services, including legal and accounting services, is a major consideration for potential investors in IT as well as Financial Services. There were no complaints regarding the legal profession, except that there was no firm which distinguished itself as being an authority or specialist in international business. Unfortunately, Dominica has no internationally recognised accounting firm. Coopers & Lybrand once had an office on the island but that is now closed. In the interest of developing the offshore sector it would be beneficial to seek to encourage one of the big names, such as Price Waterhouse Coopers, Arthur Andersen or Ernst & Young, to establish a presence on the island in partnership with one of the established local accounting firms, or appoint a local firm as its representative. 4.6.3 Banking Services It was reported that the commercial banking service is neither welcoming nor friendly to the offshore sector. They are said to view this sector with a suspicion believed to be widely shared in the society. For example, banks are said to be reluctant or unwilling to allow firms to establish even normal business accounts. This attitude would have to be changed through public awareness initiatives designed to educate the country at large as to the nature, needs and sensitivities of the offshore sector as well as to its benefits to the various stakeholders, including the commercial banks. Prepared by Henderson B. Holmes for The National Development Corporation of Dominica Page 37 of 45 Report - Analysis of IT Sub-sector in Dominica Final Report 4.6.4 General Infrastructure Infrastructural challenges which Dominica faces in areas such as roads, airport facilities and hotel accommodation, are not only important for the tourism industry but could have some bearing on the decision to locate IT business on the island. The offshore investor will also evaluate whether he and his family can live on the island and whether the services on the island are suggestive of a quality location. Prepared by Henderson B. Holmes for The National Development Corporation of Dominica Page 38 of 45 Report - Analysis of IT Sub-sector in Dominica Final Report RECOMMENDATIONS The Situational Analysis has identified and examined weaknesses and concerns in those aspects of Dominica’ business landscape which are pertinent to s creating an environment which would attract and sustain the development of the Information Technology Sub-sector. The following Recommendations address the issues, problems and deficiencies uncovered in the Situational Analysis and indicate the actions required for developing and growing the IT Sub-sector. The Recommendations are Short-Term and Medium-to Long-Term initiatives, with suggested timeframes for implementation indicated in the Implementation Plan, which is presented in Section 6.1. 1. The government needs to formulate a policy for the development of the IT Sub-sector that would address the question “ What is to be the character of the IT Sub-sector?” The policy should indicate?? ?? ?? what types of business Dominica wants to attract, the type and level of inducements it will offered, the operational requirements for an activity/business to qualify, and ?? the desired end result of the development effort i.e. what benefits are expected. 2. Government, through its selected agency, must initiate discussions, and work closely, with DOMELEC to ensure improvements in the reliability and stability of the electricity service in Dominica. Prepared by Henderson B. Holmes for The National Development Corporation of Dominica Page 39 of 45 Report - Analysis of IT Sub-sector in Dominica Final Report 3. NDC should be given responsibility for planning and coordinating all activities necessary for the promotion and development of the IT Sub-sector. This will require dialogue and documentation on role assignment between the relevant Ministries and the NDC. An essential prerequisite for success would also be the development of effective co-operation between the entities concerned. 4. The NDC’ operation should be rationalized and it should be s adequately staffed to provide professional and efficient development, promotion, advisory, facilitation, and postestablishment services to foreign and local investors. A strategic planning and organisational renewal exercise is indicated. Also Government should give consideration to establishing a bi-partisan private/public sector group to work with the NDC, as a Strategic Partner, to plan the shape and development of the IT Sub-sector. 5. NDC should exploit the current disposition of Cable & Wireless to be a strategic partner with Government in the development of the IT Sub-sector. This should extend to ensuring their willingness to negotiate reasonable rates with new investors. 6. NDC should create and maintain a database of all IT companies on the island and establish a professional service relationship with the companies in order to secure their confidence in NDC as a friendly, helpful source of assistance, guidance and encouragement. The relationship building will require promotional Prepared by Henderson B. Holmes for The National Development Corporation of Dominica Page 40 of 45 Report - Analysis of IT Sub-sector in Dominica Final Report visits and presentations to the companies on NDC’ Mission, s Vision and Modus Operandi as these relate to the needs of the IT Sub-sector. 7. In collaboration with relevant private sector agencies, the Government should conduct a public education campaign to ensure awareness of the benefits, needs and sensitivities of the IT industry and the offshore sector in general. Ongoing surveys of the needs of the sector would also serve to help keep Government abreast of developments in the field. 8. The processes for approval of projects and work permits should be reviewed and altered so they can be conducted with a greater emphasis on facilitating business development rather than a preoccupation with administrative procedures. The desired improvement in the system will require improved co-ordination of the reviews and permissions of the various agencies involved and delegation of authority at both operational and decision-making levels. 9. Of considerable importance, and as a matter of urgency, Government needs to create an attractive package of easily accessible tax, duties, and other incentives for the IT sector. 10. Dominica needs to construct A-Class workspace for IT business operations and should design the facility in a way that takes advantage of the Nature Island image of Dominica. This should Prepared by Henderson B. Holmes for The National Development Corporation of Dominica Page 41 of 45 Report - Analysis of IT Sub-sector in Dominica Final Report give the complex a unique character which could be effectively used in marketing the island as an attractive location. 11. NDC should take initiatives to encourage training in modern programming languages in private and/or public training centres. Existing IT companies should be co-opted into the effort and encouraged to make their experienced staff available to this effort. A strong IT component in the educational curriculum should also be implemented. 12. To ensure the stability of the IT Sub-sector there must be a strong programme for the development of local or “home-grown” operations to take advantage of outsourcing and joint-venture opportunities. Elements of such a programme would include provision of appropriate space at “preferred customer” rental rates, availability of development financing on attractive terms, and access to Government sponsored or subsidized professional business development services. 13. Dominica should have direct representation in the primary market (North America) to ferret out new opportunities, conduct promotional and advertising campaigns, provide valuable feedback on the market, and follow up inquiries in a timely and efficient manner. Recruitment and selection of suitably qualified experienced personnel to fill this role will be a key success factor. Prepared by Henderson B. Holmes for The National Development Corporation of Dominica Page 42 of 45 Report - Analysis of IT Sub-sector in Dominica Final Report 14. The NDC needs to identify and mobilize Strategic Partners for its economic development activities generally, and Information Technology especially. This group must include Cable and Wireless, DOMELEC, the training institutions, facilitating government agencies, and the legal, banking, and accounting professions. There should be fairly frequent informal and/or official meetings to engender the feeling of fraternity and ensure continued support and commitment to the development effort. Prepared by Henderson B. Holmes for The National Development Corporation of Dominica Page 43 of 45 Report - Analysis of IT Sub-sector in Dominica PROPOSED SCHEDULE FOR IMPLEMENTATION OF RECOMM ACTIVITY TIME FRAME ACCOUNTABILITY MAJOR ASSISTANCE REQUIRED FROM: SHORT-TERM Formulate policy re IT industry March 2001 Make N.DC fully responsible for IT industry Rationalize N.D.C. Create and maintain database of IT companies Review and alter approval processes March 2001 March 2001 Jan. 2001 March 2001 Ministry responsible for Industry Minister responsible for Industry N.D.C Board of Directors N.D.C. Management Ministry responsible for Industry. -N.D.C. -Cabinet -N.D.C Board of Directors -Min. of Tourism Consultants N.D.C. Staff -I.B.U. -Ministry of Labour. -Ministry of Finance and Economic Planning -Consultants -Ministry of Finance and Economic Planning. -I.B.U. -DAIC -DOMELEC -Ministry of Public Works -Government Information Service -DAIC Create incentives for IT sector March 2001 N.D.C. Board and Management N.D.C. Board and Management N.D.C. Board and Management N.D.C. Board and Management Explore strategic partnership with Cable & Wireless LONG-TERM Work to improve electricity service Conduct public Awareness Campaign. Jan. 2001 Start Jan. 2001 Complete Dec. 2001 Start Jan. 2001 The Nati Page 44 of 45 Report - Analysis of IT Sub-sector in Dominica ACTIVITY Establish bi-partisan private/public sector working group. Carry out organisational renewal of NDC. TIME FRAME Start Jan. 2001 ACCOUNTABILITY N.D.C. Board and Management Start Feb. 2001 N.D.C. Board and Management. Develop strategic and marketing plans for IT Subsector. Construct A-Class workspace Start Feb. 2001 N.D.C. Board and Management. Start Jan. 2001 AID Bank Industrial Estates Unit N.D.C. Training in programming and IT generally Programme to develop local IT firms Direct representation in primary markets Identify and mobilise strategic partners Start April 2001 Start March 2001 Start April 2001 Start Jan. 2001 N.D.C. N.D.C. N.D.C. MAJOR ASSISTANCE REQUIRED FROM: -DAIC -Relevant Ministries and Departments -Consultants. -Ministry of Tourism. -Ministry responsible for Industry. -Consultants. -Min. of Tourism. -Min. Of Trade, Industry and Trade. -N.D.C. -Ministry of Finance and economic Planning -DAIC -IT sub-sector -Ministry of Education -Youth Skills Training Centre -DAIC -Ministry of Foreign Affair -Ministry responsible for Industry. DAIC The Nati Page 45 of 45 Report - Analysis of IT Sub-sector in Dominica Final Report APPENDIX A-1 Situational Analysis of the Information Technology Sub-Sector in Dominica Interviewer’ Guide s NDC/Ministry Personnel Cooperating Agencies Investors/Business Operators Business Support Service Providers Good Morning / Afternoon. The National Development Corporation (NDC) wants to develop an effective strategy for development of the information technology sub-sector in Dominica and with the endorsement of CDB has commissioned my services to assist in achieving this objective. My name is Henderson Holmes and I have over 20 years relevant experience with the Barbados Investment and Development Corporation and with an offshore Company in Barbados. We need the benefit of your ideas, opinions and concerns regarding the present status of the IT sub-sector and the prospects for its future development in Dominica. Your input is highly valued. We invite you to be straightforward and candid in your answers which will not be reported on an individual basis. Your contribution will, however be used, along with other feedback, in the preparation of a composite report on the existing situation and critical development needs of this sub-sector in Dominica. 1. What is the mandate / mission and priority goals of NDC? … .… … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … What are the major functions of NDC? … .… … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … .… … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … ... … … … [ [ [ [ ] ] ] ] 2. 3. What is the current focus of NDC in terms of a development strategy for Dominica? … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … 4. What is the current status of the IT sub-sector in Dominica? … .… … … … … … … … … … … … … … … .. … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … Prepared by Henderson B. Holmes for The National Development Corporation of Dominica Page 1 of 5 Report - Analysis of IT Sub-sector in Dominica 5. Final Report Are there national policies, incentives, etc. designed to promote the establishment or growth of ITrelated businesses in Dominica? … .… … … … … … … … … … … … … … … … … … … … … … … … … … .. … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … . Yes [ ] No [ ] … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … . … . … . If “yes”, please specify: … .… … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … 6. What specific training programmes exist in support of Information Technology? Where does the promotion and development of IT related investments fit in the NDC work Plan? (and why) How recent is this Work Plan? … .… … … … … … … … … … … … … … … … … … … … … … … … … … … … .… … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … Where does the promotion and development of IT related investments fit in the NDC Work Plan? (and why) … .… … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … .. … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … On a scale of 1 – 5 , with 5 being the highest, how would you rate Dominica in terms of the following infrastructural services: Reliability 1- 5 Cost 1–5 Quality 1–5 7. 8. Electricity Water Telecommunications: Local International 9. What are the telecommunication services available in Dominica? … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … Prepared by Henderson B. Holmes for The National Development Corporation of Dominica Page 2 of 5 Report - Analysis of IT Sub-sector in Dominica Final Report 10. On a scale of 1 – 5 with 5 being the highest, how would you rate the following telecommunication services in terms of reliability, cost and quality? Reliability 1- 5 Cost 1–5 Quality 1–5 Dial- up ISDN Lease Circuit Frame Relay Internet 11. Which of the available telecommunication services do you use in your operations? … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … ..… … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … ..… … … … … … … 12. Do you consider that the services which you use are adequate for your current and future needs? Yes [ ] No [ ] If no, which services would be more appropriate to meet your needs? … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … . … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … 13. To what extent, if at all, is Information Technology included in the educational curriculum in Dominica? … .… … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … 14. What is the status of IT development within your organisation? … .… … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … 15. What is the status of IT development in the Public Sector, generally? … .… … … … … … … … … … … ... … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … ...… … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … . Prepared by Henderson B. Holmes for The National Development Corporation of Dominica Page 3 of 5 Report - Analysis of IT Sub-sector in Dominica Final Report 16. What is the status of IT development in the Private Sector, generally? … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … 17. On a scale of 1 – 5 with 5 being the highest, how would you rate Dominica’ IT Development Support s Services, in terms of reliability, cost, quality and relevance to current and future development needs? Reliability 1–5 IT Training Providers Cost 1–5 Quality 1–5 Relevance 1-5 IT Technical Service Providers 18. Who are the Strategic Partners of NDC? . … .… … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … ...… … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … 19. What, in your opinion, are the most critical factors required to position Dominica for success in attracting and retaining IT related business? … .… … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … 20. How would you assess the adequacy of existing factory space and facilities available for Information Technology businesses? Not Adequate [ ] Fairly Adequate [ ] Adequate [ ] 21. What are some of the improvements required to make work space suitable for IT Businesses? … .… … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … ... … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … 22. What are some of the more prominent or prevalent constraints to development of the IT sub-sector in Dominica? … .… … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … 23. What are some existing factors which would encourage and facilitate the development of the IT sector in Dominica? … .… … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … Prepared by Henderson B. Holmes for The National Development Corporation of Dominica Page 4 of 5 Report - Analysis of IT Sub-sector in Dominica Final Report 24. Any final comments / suggestions? … .… … … … … … … … … … … … … … … … … .… … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … Prepared by Henderson B. Holmes for The National Development Corporation of Dominica Page 5 of 5 Report - Analysis of IT Sub-sector in Dominica Final Report APPENDIX A-2 Situational Analysis of the Information Technology Sub-Sector in Dominica Interviewer’ Guide s Electricity Service [ ] Good Morning / Afternoon: My name is Henderson Holmes. The National Development Corporation (NDC) of Dominica wants to devise an effective strategy for the development of the information technology sub-sector in Dominica and with the endorsement of the CDB has commissioned my services to assist in achieving this objective. I have over 20 years relevant experience working with the Barbados Investment and Development Corporation and the development of the offshore sector in Barbados and subsequently working with an offshore information processing company. We need the benefit of your ideas, opinions and concerns regarding the present status of the IT sub-sector and the prospects for its future development in Dominica. Your input is highly valued. We invite you to be straightforward and candid in your answers which will not be reported on an individual basis, but will be used along with other feedback in the preparation of a composite report on the existing situation and critical development needs of this sub-sector in Dominica. 1. What do you understand to be the major functions of the NDC ? … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … 2. Are you privy to the government’ interest in, and plans for, the development of teleservices ? s … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … What is the relationship between you and the NDC and related government Ministries / Departments with regard to the planning of economic development ? … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … How would you rate the reliability and quality of the electricity service in Dominica (Scale 1-5)? Reliability: Very Unreliable [ ];Unreliable [ ]; Fairly Reliable[ ]; Reliable [ ] Outage Frequency (average per year)? ...… … … … .. Average duration?… … … … … … … … … … … … … .. 3. 4. 4. Ct’ d. Prepared by Henderson B. Holmes for The National Development Corporation of Dominica Page 1 of 2 Report - Analysis of IT Sub-sector in Dominica Final Report Quality : Poor [ ]; Fair [ ]; Generally good quality but could be improved [ ]; Excellent Quality [ ]. … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … 5. Is there any particular area where the service is most reliable ? If yes, why? … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … What is the average annual investment in plant and equipment? … … … … … … … … … … … … … … … What was your most recent upgrade , and when was it done?… … … … … … … … … … … … … … … … .. … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … What was its purpose ?… … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … .. … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … What is your current generating capacity ? … … … … … … … … … … … … … … … … … … … … … … … 6. 7. 8. 9. 10. What is your current capacity utilization ?… … … … … … … … … … … … … … … … … … … … … … … … . … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … 11. Do you have any plans for capacity expansion or other service improvements in the near future? If yes, please explain. … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … 12. How is your service priced to commercial users ? … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … Prepared by Henderson B. Holmes for The National Development Corporation of Dominica Page 2 of 2 Report - Analysis of IT Sub-sector in Dominica Final Report APPENDIX A-3 Situational Analysis of the Information Technology Sub-Sector in Dominica Interviewer’ Guide s Telecommunications [ ] Good Morning / Afternoon: My name is Henderson Holmes. The National Development Corporation (NDC) of Dominica wants to devise an effective strategy for the development of the information technology sub-sector in Dominica and with the endorsement of the CDB has commissioned my services to assist in achieving this objective. I have over 20 years relevant experience working with the Barbados Investment and Development Corporation and the development of the offshore sector in Barbados and subsequently working with an offshore information processing company. We need the benefit of your ideas, opinions and concerns regarding the present status of the IT sub-sector and the prospects for its future development in Dominica. Your input is highly valued. We invite you to be straightforward and candid in your answers which will not be reported on an individual basis, but will be used along with other feedback in the preparation of a composite report on the existing situation and critical development needs of this sub-sector in Dominica. 1. Are you the sole provider of telecommunications services on the island? If no, who else provides and how does your service differ from theirs. …………………………………………………………………………………………………………… … … … … … … …………………………………………………………………………………………… …………………………………………………………………………………………………………… …………………………………………………………………………………………………………… 2. What do you understand to be the major functions of the NDC ? … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … 3. Are you privy to the government’ interest in, and plans for, the development of an IT Sub-sector ? s … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … What is the relationship between you and the NDC and related government Ministries / Departments with regard to the planning of economic development ? … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … 4. Prepared by Henderson B. Holmes for The National Development Corporation of Dominica Page 1 of 3 Report - Analysis of IT Sub-sector in Dominica 5. Final Report What is the nature of your infrastructure ?… … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … What services do you offer for the following (bandwidth etc. ? Voice:… … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … .......... .....................… … … … … … … … … … … … … … … … … … … … … … … … … … … … … ..… … … … … … … … … … … … … … … … … ..… … … … … … … … … … … … … … … … … … … … … … … … … … … Internet:… … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … ... … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … .. … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … . Data:… … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … ..… ..… … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … ..… … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … .. 6. 7. Are all your services available throughout the island?… … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … . .… … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … .. Is there any area on the island where your infrastructure is better that it is elsewhere? … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … How would you rate your service in terms of reliability and quality? Reliability: Not reliable [ ] Fairly reliable [ ] Reliable [ ] Very reliable [ ] What factors influence your choice? … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … Quality: Poor [ ] Fairly good [ ] Excellent [ ]. What factors influence your choices? … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … 8. 9. 10. How is reliability of your local service ensured ? … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … Prepared by Henderson B. Holmes for The National Development Corporation of Dominica Page 2 of 3 Report - Analysis of IT Sub-sector in Dominica Final Report 11. For your international service, what bandwidth ( capacity) do you have into, and out of, the country? … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … . 12. What provision(s) do you have for redundancy? … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … .… … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … ..… … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … .… … … … … … … … … … . 13. Is your company aware of the emphasis regional governments are placing on the development of IT and Financial services as important elements of their new economies, and what plans does your company have for ensuring that there is the range of services available to make this a reality? … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … … Prepared by Henderson B. Holmes for The National Development Corporation of Dominica Page 3 of 3 Report - Analysis of IT Sub-sector in Dominica Final Report APPENDIX B Contact List Dominica Government: Prime Minister (Rt. Honourable Roosevelt Douglas) Minister of Tourism (Honourable Charles Savarin) Minister of Education, Science &Technology (Honourable Hubert Sabaroche) Ministry of Education, Planning Unit (Mr. Durand) Ministry of Trade & Marketing (Mr. Alan Paul) Ministry of Communications, Works & Housing (Mr. Sylvester J. Cadette, Telecoms Advisor) Ministry of Labour Immigration Department (Inspector Cuffy, Chief Immigration Officer) International Business Unit (Ms. Lucilla Lewis) National Development Corporation (Mr. Ronald Lander, General Manager, Ag.) (Mr. Michael Fadelle, Operations Manager, Industry Division) (Ms. Rodha Letang, Industry Officer) Customs & Excise Division (Mr. David ) AID Bank Industrial Estates (Mr. Martin Warrington, Manager) Prepared by Henderson B. Holmes for The National Development Corporation of Dominica Page 1 of 4 Report - Analysis of IT Sub-sector in Dominica Final Report AID Bank (Ms. Patricia Charles, Manager) (Mr. Clement Carty, Manager Finance) Youth Skills Training Program (Mr. Letang) Government Computer Centre Private Sector Dominica Electricity Services (DOMELEC) (Mr. Murray Rogers, General Manager) Roseau Co-operative Credit Union (Mr.Clifford Gibbons) Dominica Associationof Industry & Commerce (Dr. J. Bernard Yankey, Executive Director) Mr.Milton Lawrence (Consultant) Cable & Wireless, Dominica (Mr. Haynes Jacob, Manager Engineering) MARPIN Telecoms & Broadcasting Co. Ltd. (Mr.Bennette Thomas, Manager) National Commercial Bank Waterfront & Allied Workers’Union The Domini Corporation (Ms. Jennifer M. Aird, President & CEO) Information Technology & Support Companies Premier Computing Services Ltd. (Mr. Milner Francis, Owner/Manager) Digital Design & Print (Mr. Paul Toulon) Prepared by Henderson B. Holmes for The National Development Corporation of Dominica Page 2 of 4 Report - Analysis of IT Sub-sector in Dominica Final Report Free Style (Mr. Geoffrey Guy) Caribbean Data Services (Ms. Benama Marie) Caribbean Consultancy Network Associates (Messrs. Nicholas Watkins & Oliver Sabetian) Isatcom (Mr. Anthony Betts) Worldwide Wager (Mr. Ronald Pape, President Mr. Steve Reynolds, Manager) Sports International 2000 Training Institutions School of Typing/Computing (Ms. Sarah A.Burton, Manager & Director) Business Training Center (Ms. Lucia Stedman, Managing Director) Clifton Dupigny Community College (Mr. Merrill Matthew Mr. Henry Wolney) St. Lucia National Development Corporation (Ms. Elizabeth Charles-Soomer, General Manager) Organisation of Eastern Caribbean States (Mr. Donnie De Freitas, Project Manager, Telecommunications Reform) St. Lucia Electricity Services Ltd. (LUCELEC) (Dr. Frederick N. Isaac, Planning & Projects Engineer) Cable & Wireless) St. Lucia (Ms. Hazel Sanchez, I.S. Manager) Prepared by Henderson B. Holmes for The National Development Corporation of Dominica Page 3 of 4 Report - Analysis of IT Sub-sector in Dominica Final Report Ministry of Commerce, International Financial Services and Consumer Affairs (Mr. David Jordan, Director, Commerce & Industry) St. Kitts Ministry of Trade & Industry (Mr. Horatio Versailles, Permanent Secretary) Net.Kn (Mr. Wayne Wattley) Development Bank of St. Kitts and Nevis (Mr. Auckland O. Hector, General Manager) Cable & Wireless (Mr. Burchell M. Crooke, Head of Networks Dept.) Prepared by Henderson B. Holmes for The National Development Corporation of Dominica Page 4 of 4 Report - Analysis of IT Sub-sector in Dominica Final Report APPENDIX C Statutory Instruments & Other Documents Reviewed ?? ?? ?? ?? ?? ?? ?? ?? ?? ?? ?? ?? ?? ?? ?? ?? International Business Companies (IBC) Act 1996 Offshore Banking Act 1996 National Development Corporation Act Draft Model Telecommunications Bill, 2000 Final Report of the Legal Consultant - OECS Model Legislation - The Information Services Investment Facilitation Bill (1996) Report on the Informatics Industry in the Commonwealth Caribbean - Miriam Jacobs Application Package for International Business Companies (IBC’ Engaging in Offshore s) Business (Excluding Internet Gaming) in the Commonwealth of Dominica Internet Gaming - Application Procedures Forms and Guidelines The Commonwealth of Dominica Telecommunications Sector Policy Diagnostic Evaluation of the Enabling Environment for Informatics in the Commonwealth of Dominica - The Chicago Group and Wolf et al (1995) List of Operational Internet Gaming Companies in Dominica Dominica Investment Information Checklist Progress Report of OECS Informatics Programme Requirements to obtain a Betting and Gaming License to operate an Internet/On-Line Gaming Enterprise in St. Kitts and Nevis Dominica Draft Telecommunications Act, 2000 Informatics Sector Report - Barbados Investment & Development Corporation Prepared by Henderson B. Holmes for The National Development Corporation of Dominica Page 1 of 1 Report - Analysis of IT Sub-sector in Dominica Final Report ABBREVIATIONS C&W CDB DAIC ECFS Cable & Wireless Caribbean Development Bank Dominica Association of Industry and Commerce East Caribbean Fibre Service. ECTA Eastern Caribbean Telecommunications Authority IBC IBU IT NDC International Business Company. International Business Unit. Information technology. National Development Corporation. OECS Organisation of Eastern Caribbean States. Prepared by Henderson B. Holmes for The National Development Corporation of Dominica Page 1 of 1 SITUATIONAL ANALYSIS on THE INFORMATION TECHNOLOGY SUB-SECTOR and MATTERS RELATED THERETO in THE COMMONWEALTH OF DOMINICA PREPARED FOR THE NATIONAL DEVELOPMENT CORPORATION OF DOMINICA Henderson B. Holmes August, 2000 TABLE OF CONTENTS Page EXECUTIVE SUMMARY I. INTRODUCTION...................................................................................................... 1 II. APPROACH AND METHODOLOGY.................................................................... 3 III. OVERVIEW OF THE INFORMATION TECHNOLOGY INDUSTRY........... 6 IV. ANALYSIS OF DIAGNOSTIC FINDINGS ......................................................... 10 4.1 4.2 The Information Technology Sub-sector in Dominica ................................... 10 Telecommunications ......................................................................................... 12 Telecommunications - Quality................................................................... 13 Telecommunications - Capacity ................................................................ 14 Telecommunications -Price........................................................................ 16 4.2.1 4.2.2 4.2.3 4.3 4.4 4.5 Workspace Adequacy........................................................................................ 20 Training Programmes in support of it .............................................................. 23 Investment Promotion Strategies...................................................................... 25 Policy re Development of the IT Sub-sector............................................. 25 Incentives Programme for IT Sector ......................................................... 26 Institutional Framework ............................................................................. 30 Administration ................................................................................... 30 Structure and Capability of NDC ..................................................... 32 4.5.1 4.5.2 4.5.3 4.5.3.1 4.5.3.2 4.5.4 Promotional Activities................................................................................ 32 Local Involvement............................................................................. 33 Attracting Foreign Investment.......................................................... 33 Promotional Strategy ......................................................................... 34 4.5.4.1 4.5.4.2 4.5.4.3 4.6 Other Impediments ............................................................................................ 35 4.6.1 4.6.2 4.6.3 4.6.4 Electricity .................................................................................................... 35 Professional Services.................................................................................. 37 Banking Services ........................................................................................ 37 General Infrastructure................................................................................. 38 APPENDIX A-1 Interviewer’ Guide (General) s APPENDIX A-2 Interviewer’ Guide (Electricity) s APPENDIX A-3 Interviewer’ Guide (Telecommunications) s APPENDIX B Contact List APPENDIX C Statutory Instruments & Other Documents Reviewed APPREVIATION Prepared by Henderson B. Holmes for The National Development Corporation of Dominica