Incentives lure call centres
The government’s scheme to provide incentives to lure international companies to establish their call centres in SA had already met with a lot of success, according to a trade and industry department official.
The success achieved so far belied the scepticism which greeted the project shortly after its launch last year, trade and industry deputy director-general Tumelo Chipfupa said in an interview.
The fiscus has allocated R680m for the incentives over three years as part of government’s strategy to deal with unemployment and poverty.
The initial slow take-up of the incentive scheme led to suggestions that its acceptance criteria were too high and predictions were that it would fail.
But Chipfupa said so far 11 major applications for incentives to set up business process outsourcing operations, with 12000 seats and representing a total investment of R1,2bn, had been processed. These businesses would create 15 000 jobs over the next three years, already more than half the 25000 targeted by the government. This does not represent the total size of the industry as many call centres had already been established.
The biggest company to invest so far has been Teletech, a huge US multinational which also operates a call centre in the Philippines. Gauteng and Cape Town had been the major beneficiaries of the investments.
An industry survey by Deloitte and CallingtheCape, the Western Cape’s contact centre and business processing outsourcing development agency, estimated the economic benefit of the sector at about R2,5bn a year. Employment in the industry in the province had risen from 6500 in 2003 to more than 27000.
Chipfupa said the generous incentives were a strong attraction as well as the fact that SA was in the same time zone as Europe, had a high level of proficiency in English and could offer sophisticated services.
A lot of companies also want to diversify their geographic risk. India, another major destination for call centres, was running out of capacity in certain instances and its labour costs were increasing.
Chipfupa said SA featured quite high as a location for business process outsourcing and was beginning to be seen as a major player in the sector. A downside had been the high cost of telecommunications but this was coming down and the internet offered cheap alternatives.
He did not believe demand would dry up as a result of the financial crisis as companies would be looking to cut costs and improve efficiencies.
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