by Raul Amador
Nicaragua needs to embark into the Global Markets. For this reason, there should be an approach towards the promotion of competitive advantages that allow us to offer world quality competitive services to the global market.
An example of competitive advantage is the agricultural sector; its competitive advantages are that we have cheap labor force and cheap land. Therefore, we can add assets, technology, and genetics so as to obtain highly competitive worldwide products such as sugar, peanuts, or irrigated rice. Hence, we link all our products to the global market.
In Nicaragua, the coffee industry took 120 years to evolve and produce an estimate of 2 million quintals and an average of US$250-280 million dollars in exports. It offers employment to 250 thousand people and pays US$60 million in salaries. Nevertheless, this is an example of an inefficient structure of the exporting system since it was built in 120 years.
The limitations we have in Nicaragua refer to social inequity, poverty, and poor educational development. If we do not make changes to the system and create good practices that contribute to the development of the markets we will continue in poverty. Technology and globalization are two wealth factors that contribute to resolve social divisions, social inequity and bring wealth to the country. So, we have to take advantage of this wealth and create conditions for new competitive advantages to emerge.
Now, we have to emulate the agricultural industry with the outsourcing industry and all services in English. We need to add competitive advantage to Nicaragua through the development of English speakers. We will add competitive advantage by resolving the bottle neck that currently exists in terms of limited labor force that speaks English; English speakers who lack specialized training in Informational Technology, Tourism, and Call Center; and active labor force, speakers of English who do not meet international standards, due to poor educational background.
At first Nicaragua’s competitive advantage was a group of young people who spoke perfect English, an infrastructure cheaper than Costa Rica or Panama, and a Free Trade Zone law. All these features linked to the great wealth of globalization and technology contributed to a competitive advantage for investors to come to invest in Nicaragua, especially in outsourcing. Yet, we are running out of labor force. If we do not create a system with new advantages, and continue this trend, our competitive advantages will vanish. Also, we run the risk of the business to disappear.
What do we need to do? The first step is to promote activities with stakeholders to raise awareness of the reality of the industry. Who are the stakeholders? COSEP, CNU, CNZF, MINED, Chamber of Tourism, CACONIC, English Institutes, INATEC, INTUR, and Central Government.
The country has given a step forward in matters of competitive advantage with the Trade Zone Law which helped to create 6000 employments through the establishment of call centers and outsourcing companies. This industry generated 6000 jobs in 8 years. We exported almost US$100 million dollars; paid almost US$ 40 million in salaries; and opened a new business opportunity for the country. Therefore, 8 years ago it was proven that through the Free Trade Zone we have added competitive advantage to the country.
Now we can replicate this scalable example and produce a new badge of 6000 new employments and export another US$ 100 million, though the English speakers demand is higher. These new employments would ensure a job to 6000 families. Likewise, we need to complement the industry with an even stronger law, one that expands the benefits. Therefore, by having an industry that has a competitive advantage and all these elements would greatly contribute to resolving the country’s poverty and misery issues. Our responsibility is to create an industry that has competitive advantage at a global scale and can solve the need to develop the country, Nicaragua.
What do we need in the case of English? We need to create activities that attack the problem and bring results in a short term. We also need to develop better training practices, and design new intensive programs that prepare English speakers for the work field. For this, we require solid institutions that can train English teachers in the teaching methodology required to prepare English speakers in the short and medium term. Also, we need institutions that go and reproduce English training to public and private schools. We need to form institutes like Keiser which offers intensive English programs that could offer training to young people in an 8-9 month period.
Once trained, these people can easily incorporate and satisfy the needs of the outsourcing industry. In this way, Nicaragua could possess an outsourcing industry that would be a key factor to the development of the country. As well possess a specialized work force in different areas. Equally, we need to ideate new strategies with clear outcomes and competitive advantages to renovate our industries, and add new competitive strategies for Nicaragua to visualize the potential growth of the industry and maintain low costs.
My proposal is to create a Commission of English Development. Its name should be National Commission for the Settlement of a Strategic Route for the Development of English Speaking Resources in Nicaragua. This commission should submit a proposal to the central Government through COSEP. This commission should work towards the development of the service of quality in English. Its role should be to develop a National Plan for the strategic development of the country; assign budget as well as define sources for budgeting. Correspondingly, as a leader in education, we want Keiser University to write a proposal for an Intensive program in the fields of Call Centers, Tourism, Teacher Training and English Teaching.
In summary, it took 120 years for the coffee industry in Nicaragua to evolve and produce in exports US$250 million, which is a proportionate dive compared to the outsourcing business that in 8 years generated the same exports in million dollars. Therefore, it means there are industries that with little competitive advantage, a Free Trade Zone law and the creation of English courses could shift Nicaragua upward to the global markets.