The Evolution Of The Mauritian Economy Information Technology Essay

The Evolution Of The Mauritian Economy training applied science EssayIn the past times two decades, the orbit scenario has considerably changed with one of the pioneering factors leading much(prenominal) changes as globalisation being data engineering science (IT). The pervasiveness of information and communication theory technologies (ICTs), may it be at home, in spite of appearance offices, or at schools cannot be denied today. The phenomenal increase of ICTs world bulky has had scotch, mixer, political, and licit implications. For instance, creasees operate in more(prenominal) war-ridden purlieus today while both(prenominal) differents surrender closed down receivable to unforeseen pressures.ICTs carry in give cargon manner been the understructure blocks for globalisation. Global network systems be today considered as being the un routined basis for power. The core elements propel developing and developed economies to surface have been free trade, un restricted investiture, de ordinance, match budgets, grim inflation, privatisation of state owned institutions and infrastructure among others (APC, 2003).Few multi field of studys are autocratic a vast part of the grocery share in the bulk of countries. ICTs have been contributing largely to much(prenominal) encroachment in the social and frugal conditions of states. With the advent of ICTs instantaneous, global and electronic information is widely ge dining table to each(prenominal).Today, a world without ICT cannot be fathomed. Increased dependence on the new forms of information has marked the whole world financial markets, competition, research and ontogeny, program lines and induction are all observeed by the recent developments in ICT. fit to Castells (2000) ICTs are the equivalent to the importance of electricity in the Industrial Era. versatile other authors have appraised ICTs as being the tool to leapfrog economic egress through modernisation of producti on systems and increase conflict.Economies ignoring the developments in technology depart nevertheless re master(prenominal) poor, marginalised and cast aside while those winning advantage of it go forth simply acquire further by spill beyond the traditional restrictions of space and time (ITU, 2004).The Mauritian Economy has not been left unscathed by phenomenal changes brought about by globalisation. decrement in trade barriers and the erosion of trade preferences enforced by the world Trade Organisation (WTO) has exposed the scrimping to diverse hazards on the world market. Fiscal measures are currently being tightened with a view to sustain the economy in the long-term increase dependence on topical anaesthetic quality products is being support. Consultancy function are being sought from wise(p) persons with a view to identifying means as to how the economy can hold up the impact of globalisation.Among the long-term strategies put forward, lies the development and progress of the Mauritian ICT welkin as a means of reducing reliance on other pillars. The ability of ICTs to counter the effect of globalisation has been proven by countries such as Singapore as a reliable path towards sustaining competitiveness in the world market. Indeed, several courses have elapsed since Mauritius has meshed itself in a new imagination of transforming the country into a cyber-island. As such, numerous changes and developments have been achieved taking from infrastructure to the legislative framework for ICTs. constituent of established pillars to economic progressAgricultureManufacturingTourismFinancial and serveThe ICT arenaContribution to the economyGiven the lack of move intos for GDP character, the main emphasis has been on the train of habit generated in the ICT arena to hunt its harvest-festival. However, in 1997, the ICT arena has been reported to have generated 3.3% of total sales to the economy and by 2002 this figure had grown to a tota l of Rs.4.1 Billion (2.9% of the bring in National Income). The Mauritius IT Industry Association (MITIA) estimated the ICT sectors turnover to be near $70 Million for the 2001/2002 period. The telecommunications sector has been accredited with bringing in the major contribution from the ICT sector to Foreign Direct Investment (FDI).This result is due to almost 300 companies direct in the ICT sector, involved in a wide range of activities including software system development, reverberate centre, Business Process Outsourcing, IT Enab direct go (ITES), upbringing, hardware assembly and sales, networking and other support utilitys. World leaders such as IBM, Microsoft, Oracle, HP, Infosys, Accenture, Hinduja Group have started operations on the island. ITES-BPO so far is the strongest ingredient of the topical anesthetic ICT industry, experiencing a robust growth recently. These ITES-BPO companies have already invested some MUR 727 M and were employing around 5513 deal at the end of kinfolk 2006. This figure includes an increase of 27.2% from January 2006 to September of the same year. Call centres contributes most to ICT sector employment in Mauritius with 42% of the workforce pooled into their activities (2338 persons). A remarkable increase of 158% should excessively be noted with regard to software development where employment increased from 277 to 716 lately, indicative of a rise in demand for software developers as well (BOI, 2008).Furthermore, with respect to encouraging small local entrepreneurs to invest in ICT, some 18 start-ups have benefited from the National calculator dining table (NCB) incubator effect. These start-ups have in turn contributed towards the creation of 86 jobs and an investiture of MUR 12.75 M.When it comes to IT Export, companies like Blanche Birger, DCDM Consulting, State Informatics Limited and Mauritius Telecom have extended their operations to the regional market (NCB, 2006).InvestmentThe Mauritian organisat ion has realised the spacious effectiveness of ICT, in boosting the economy. It wants ICT to offer efficient, effective and citizen-focused ordinary works 24 hours a day, 7 days a week (ITU, 2004). Mauritius is presently class-conscious 32nd worldwide as an easy and captivateive location for billet (BOI, 2008). Foreign enthronement being constantly sought the governance offers a range of facilities and incentives aimed at creating a favourable climate for FDI for both the individual and Corporate Investor. At the foreign level the government maximises on its political, economic and diplomatic endeavour to secure market attack and investment guarantees (NCB, 2006).Mauritius has been a leader in Africa in making tax concessions and giving other investment incentives, dating from 1970. All of these benefits have in a flash been extended to the ICT sector. It is now emphasising a targeted promotion project kind of of an incentive driven approach.The government has, in th at respect, given(p) many facilities regarding FDI. The package of incentives as listed in the ICT fillip Regime is as followslow corporate tax of 15% instead of 25%VAT at 15%, refundableNo capital get tax100% foreign monomaniaFree repatriation of profits, dividends and capitalNo minimum foreign capital required50% annual adaptation on declining balance for the purchase of electronic and electronic computer equipmentStreaming of all administrative procedures privilege of customs and excise duties on the import of materials and equipmentexemption from tax on dividendsFDI is governed by the Non-Citizen (property restriction) interpret of 1975. This investment regulation is in line with WTOs agreement on TRIMS. A World Bank engage targeted in collaboration with the Board of Investment (BOI) portendd that delays in the issue of business licenses and operating permits severely and negatively affect investment. Consequently, recent developments have led to the creation of busine ss within three days.Most activities in the ICT sector are under call inn by a a fewer(prenominal) big groups and governmental entities. The latter(prenominal) fare fairly well, as compared to other regional countries. Most of our investment in 2005 has been obtained from Indian companies with the objective of using the island as a origin to the African market. For example Mahanagar Telephone Mauritius Limited (MTML) has started operation in July 2005 with supranational long quad foretell services. As from this year, it has launched fixed phone services and will soon be offering cellular phone services. It was estimated in 2005 that MTML would have invested $25 million in its network. Many European companies are similarly reported to have entered into meatt feigns with Mauritian organisations in the ICT sector. The potential for BPO, call centre services and offshoring is increasing. Many foreign-owned call centres have invested in Mauritius, such as V-Lines from France, an d Infinity enounce venture between french and Mauritian organisations.As such, the potential for BPO, call centre services and offshoring in particular are increasing. In fact, BPO is the most thriving activity at the moment. Investment in BPO activities has increased by 38.3% (to the number of 148) over septet months (January 2006 to September 2006). Following Mauritius, France brings the most funds in the sector (forecasts indicate a figure of MUR 529 million). India is the next big investor in BPO, with a forecasted investment of MUR 440 million (BOI, 2006).The ITES-BPO sector is actually intended to bring investment of MUR 1.94 million in the island. So far, MUR 1.01 billion has already been pooled in the economy. By September 2006, ITES-BPO activities were distributed as followsFigure 1 ITES/BPO exemplifyivity in Mauritius (In Numbers)Many foreign-owned call centres have invested in Mauritius such as V-Lines from France, and Infinity joint venture between french Mauritian organisations. software product Development companies are coming in larger numbers, with a 43% growth rate, followed by BPO (40%) and multimedia system Companies (33%). By end September 2006, the BOI has approved of 29 ITES/BPO investment projects. 24% of these come from call centres and 21% from Software Developers. The main target markets of investment companies are France, United Kingdom (UK), United States (US), and India.LegislationsGiven the increasing growth of the ICT sector, in that location has been a shift in the paradigm of regulation during the belong decade. The development of the ICT sector is not solely dependent on the proficient advancements but alike on a strong and supportive regulative and legislative environment.The ICT potentiality (ICTA) has identified seven major market segments where regulation is deemed to be imperative. The market segments are as follows1. Fixed telephonya. local anaestheticb. world-widei. Conventionalii. profit Telephony2. Mo bile telephony3. Services related to fixed and mobile telephony4. Dial-up Internet5. Broadband Internet6. Wholesale7. Sale of EquipmentMauritius has been accredited with having a sound and an impartial legal system based on the Napoleonic Codes and the British Common Law. able Property rights have been strengthened by recent trademark, patent and industrial design laws which comply with the WTOs TRIPS agreement. Furthermore, Mauritius is as well as a member of the World gifted Property Organisation (WIPO) and party to the Paris and Bern conventions for the protective covering of industrial property and the Universal Copyright Convention (Bank of Mauritius, 2006).Over the past decade, the presidential term of Mauritius (GOM) has taken a proactive role in the regulation of the ICT Sector and has passed five laws to deal with issues such as recognition of digital signatures, surety of copyrights and combating cyber-crime. A brief description of each act is bidd below gameboard 1 Overview of Main Legislations for the ICT Sector RegulationLawDescription term PassedThe estimator Misuse and Cybercrime BillProvides for repression of criminal activities perpetrated through computer systems and testimonial against computer misuse and new forms of CybercrimeMay 2003Information and Communication Technologies ActProvides for the establishment, management, regulation and promotion of ICT sectorDecember 2001Electronic Transaction Act (ETA)Covers electronic records and electronic signatures and the security thereof. (ICT Sector in Mauritius, ICT Authority, 2004)July 2000Information engineering (Miscellaneous Provisions) ActDeals with admissibility of electronics documents as evidence in court cases data protection and security, computer misuse and patenting of software.December 1998Copyright ActPertains to the protection of software and electronic databases.September 1997Data Protection Act2010As per the supplying of the ICT Act, a number of institutions, namely the ICTA, the ICT Appeal Tribunal, the ICT Advisory Council and the Internet steering Committee have already been set up. This regulatory framework has encouraged and allowed internationalistic ICT players such as Microsoft, Infosys and so on to successfully conduct their business from Mauritius while allowing the state to trifle its social and economic goals. The GOM has also proposed one more bill, entitled the Data Protection Act, which is planned to control the ITES companies and their customers on the safety of their data (BOI, 2008). This bill has been in the pipeline for the past 2 years now.LiberalisationThere has been a marked remainder in the ICT sector structure as from 2000 to 2004. The international long distance and Internet Service Providers (ISPs) have changed from having a monopolistic structure to a highly competitive one. The mobile operators have also drifted into full competition, as compared to a previous situation characterised by partial competition (World Bank, 2004).As per the WTO agreement, in 1997, to liberalise the telecommunications sector, the ICT Act was laid as a foundation for proper legal framework governing and enabling liberalisation to take place (ICTA, 2001). It was agreed that all state monopolies and exclusivity rights in domestic and international services would be terminated by 2004. This date was however innovational to the 1st January 2003 as the legislative environment was then deemed insufficient to meet the development of the ICT Sector as regards to foreign investment. Prior to 2003, Mauritius Telecom (MT) held scoop rights on most national and international services. However, with liberalisation, the Mauritian population has seen the offshoot of several new entrants in the sector to their benefit.In 2001, the ICTA replaced the MT Authority as per the ICT Act of 2001. It oversaw the full liberalisation of the telecommunications sector and in its starting line year it granted several licenses.The liberalisa tion of the telecommunications services since 1st January 2003 has given a major impetus to the ICT sector (African Economic Outlook, 2006). Exclusive rights of ownership of the SAFE transmission line have been given to MT however. The mobile market on the other hand, involves two major competing firms Emtel and Cellplus, and a third probably in the near future MTML.Current State of Information Technology in MauritiusPeopleMauritius is a highly erudite economy with 88% literacy rate (BOI, 2006). The island is on the go towards increasing its IT literacy rate. For this purpose, it has started at the ground level i.e. from schools. Another project launched in 2001, was the School Information Technology project, where primary and secondary schools will have computers, with at least one computer lab. In 2002, 100% of schools in Mauritius had a computer but only 18.7% of these had access to the net (ITU, 2005). All the universities have LANs and high speed meshwork access. In 2004, 48% of the secondary schools and 4% of the primary schools had internet access (BOI, 2006).With regard to the distribution of the educational level in Mauritius, in the year 2005, there were a total of 11,814 school leavers in S.C. and 5555 school leavers in H.S.C. Only 4444 tertiary students enrolled in Mauritian institutions of which 2,020 enrolled for IT Courses taking from Diploma to superior degrees (BOI, 2006). Adding to the tally of developing IT skilled professionals is the high number of students who are returning(a) to Mauritius each year with degrees from leading universities in Europe, Australia, India, Canada and South Africa.There are five main institutions offering courses leading to certificates, diplomas and degrees in IT. These include the University of Mauritius (UOM), Mauritius sleeping room of Commerce and Industry, Swami Dayanand Polytechnique, De Chazal Du Mee Business School (DCDM) and University of Technology Mauritius (UTM). Other institutions include Fo rmation, Recruitement et Conseil en Informatique, State Informatics Limited and NIIT Computer Education and Training Centre (NCB, 2006).However, the Mauritius College of Air (MCA), which is the countrys leading public distance learning institution, has very few Computer Science courses and in the year 2002 only 3.6% were enrolled in the Computer Science field. Nevertheless, there are many other international universities which provide distance learning courses. Distance learning accounted for the largest share of tertiary Computer Science students with a total of 1,962 students in 2002 (ITU, 2004).The Tertiary Education missionary work (TEC) and the Task Force on E-Education and Training projected the number of graduates to join the ICT lug market up to 2005 at around 4000 (NCB, 2006). The following plot illustrates this distribution by the type of institutionFigure 2 memorandum in Tertiary Computer Science Courses by Institutions (2001)Adapted from ITU (2004)However, the foreca sted demand of IT workers and/or IT specialists far exceeds the forecasted supply. It was forecasted, in 2003, that if GOM accelerated training accompanied with a low demand for IT professionals, Mauritius will just meet the demand for IT professionals in 2006. If the reprobate was to be true, then Mauritius would face an acute shortage of capable labour which was forecasted to be around 8000 IT professionals.In the year 2000, there were approximately 1,900 IT Professionals jibe to a survey carried out by the NCB. Three years by and by that figure had increased to 3,200 professionals. Furthermore, an annual growth rate of 15% per annum of newly trained IT graduates is estimated by the TEC. However, as stated earlier, it would prove to be grossly inadequate to meet the demand if there is the brooked and the desired growth of the ICT sector. The GOM is providing incentives to attract internationally renowned institutions and universities to set off-campus branches in Mauritius (I TU, 2004).Due to Mauritius relatively poor adoption of the internet, the GOM has sharpened its focus on education at all levels. Promotion of an ICT Culture at the national level has been acknowledge through operation ofAn IT Coach Project (Cyber Caravan) to raise ICT awareness around the countryA Computer Proficiency Program a joint giving medication Private-Sector initiative by the National Productivity and Competitiveness Council (NPCC) on basic computer skills is available to the community at large at a subsidised fee of Rs.700.Also, the GOM has recently launched an ambitious and enormous training programme of 400,000 Mauritians in ICT over the next four years on the 4th September 2006. Commonly known as the IC3 programme, it aims to dispense a series of training sessions under the Universal ICT Education Programme (UIEP) which will eventually lead to the highly recognised Internet and Computing bosom Certification (IC3). In that respect, the NCB has been delegated the tas k of implementing the project which will include people from miscellaneous background, be it educational, social, or work. The IC3 Certification which was developed by Certiport incorporation (USA) is the first globally accepted, standards-based, validated certification program for basic calculation skills. It consists of three modules, namely Computing Fundamentals, Key Applications, and living Online. IC3 being a foundation course for ICT studies, the trainees can further evolve in the sector by going as far as the MCSE (Microsoft Computer Software Engineer) qualification.IT shrewdness among the Mauritian PopulationSince it has adopted a vision of go a cyber-island, the state has been strongly emphasising the need to bring the technology to the give of one and all. On one hand, the younger generation has been heavily benefiting from the inclusion of ICT in their curriculum. 2004 reports confirm that around half of all secondary school and a number of primary institutions be nefit from internet access. A large portion of the educational institutions have been equally fitted with computers for students use. On the other hand, the government has also been providing training in IT. As per October 2004, 2500 civil servants had already been trained. The table below illustrates some economic and ICT forefingers for 1999-2004Table 2 Economic and ICT-related indicator (1999-2004)YearIndicators20032004Estimated Population (Millions)1.1861.196GDP per capita (MUR at Market Price)128,288141,826GDP egress at basic prices+3.7+4.5Mobile Subscribers/100 inhabitants38.1347.58Fixed Telephone Penetration (%)9192Estimated Internet Users180 000230 000No. of Internet Subscribers (dial up)60 05277 558Estimated Household Internet Penetration (%)International Internet Bandwidth (Mbps)4561Estimated Internet Hosts39854836Source Central Statistics Office, MauritiusA survey conducted by the NCB in 2002 showed that the main reason why people did not have a PC at home was that the y already had one at work and the second reason was cost. The government started a Computer in Every Home campaign and also provided subsidised loans to civil servants for get PCs but CSO figures claim that people did not know about these initiatives.Furthermore, the Ministry of health had implemented the National Health Information System, so as to stigma health care more efficient. By 2002, seven health centres had been computerised.Mauritius also has the cheapest internet access rates in the African Continent. However, on a global basis, the price of internet connection is relatively high. Indeed, in July 2004, there was a 15% VAT charge on internet services. much(prenominal) diverging strategies directly hinder the governments policy of spreading internet use throughout the island.With prospective competition from MTML, the internet tariffs were expected to fall by the end of 2006. This would have rapidly increased the number of internet users. Nowadays, grade offices also p rovide electronic services, namely for payment of bills and the sale of telephone services. Mauri-Post is further expected to launch online banking services.ConclusionThe ICT Sector in Mauritius has undeniably emerged as a sector in its own right today. The vision of the Mauritian government to make it the next engine of economic growth is in its making as ICT starts to make important inroads to the contribution of GDP. An analysis of 18 economies on their abilities to effectively implement ICT putting Mauritius in fifth position clearly supports this view.The Mauritian government has taken several stairs to make the islands outlooks more favourable to investors in the ICT Sector. Additionally, infrastructural developments, especially in the strong-arm terms, are highly conducive to the foreign investment and the GOM is taking pro-active measures to attract further FDI in the ICT Sector.The legislative framework for the sector clearly demonstrates the countrys willingness to raise competition, openness, and an attractive business environment as well as the provision of universal service with efficient interconnectivity. With the liberalisation of the local telecommunications market, investors can expect lower rates of internet access as well as better services from international brands in the future. The liberalisation is also attracting investment in the telecommunications field.To complement the above, several unprecedented initiatives, with the IC3 programme being the latest, have been undertaken to create a first-time-ever educated population in respect of information technology. The combination of the discussed issues, projects, and factors in this chapter will irrefutably link Mauritius firmly to the global information highway in the near future.Yet, development cannot happen in a vacuum, and Mauritius will need to keep pace with the fast changing environment of ICT as it develops the sector further. Pro-activeness, responsiveness, and flexibility repr esent key requirements for the ICT sector development to prevent the country from losing its position.Literature ReviewThis chapter describes the strengths, weaknesses, opportunities, and threats (SWOT) of the Mauritian ICT industry. The following plot illustrates the main elements of the analysisSTRENGTHSWEAKNESSESLanguage- Bilingual WorkforcePolitical WillingnessInfrastructure somatogenic Telecommunications engaging Fiscal IncentivesSound Legal FrameworkGeographical spatial relationPolitical Stability and Low riskiness of TerrorismInfrastructural WeaknessesPoor education systemDeteriorating economyLack of Research and Development (RD)OPPORTUNITIESTHREATSMembership in major Regional Trade BlocsIndian Government supportspeedy Development PaceBrain DrainCompeting ICT economies in the regionRisk of natural disaster/sTable 3 SWOT for the Mauritian ICT IndustryStrengthsBilingual WorkforceMauritians are bilingual being familiar(predicate) in both French and English and can therefo re service both English-speaking and French-speaking markets (Novatech, 2008).The Industrial Vocational Training Board (IVTB) furthermore organises the training of call centre and BPO operators (which currently constitute a high proportion of the ICT sector) on a regular basis. Additionally, ten public and some thirty private institutions, in collaboration with reputed foreign universities and international training centres provide professional training courses in the IT sector. Key players operating in Mauritius include NCC, NIIT, Aptech, University of Surrey, University of Birmingham, University of Witwatersrand, Universit of Poitiers, Dale Carnegie, BCS, ACCA, CIMA. Additionally, Mauritian employees are commended for their loyalty by Indian, French and British firms. This, according to them, improves the quality of the Mauritian workforce.InfrastructureTelecommunicationsThe SAT-3/WASC/SAFE shooter optical fibre cable links Europe to the Far due east through Mauritius and provi des connectivity to worldwide destinations through ADSL, ISDN and high bandwidth international leased lines (IPLCs).Government has equally accelerated the liberalisation of the telecommunications sector by an early consequence of the exclusivity of the incumbent operator, Mauritius Telecom (MT) as mentioned earlier. As such, new operators have entered the local telecommunications industry offering value added services in the field of International Telephony, Internet Service Provider and Voice over IP. The market has make highly competitive and new entrants compete mainly on prices to gain new clients.A further asset is possessed by Mauritius Telecom, the national operator, with a Point of Presence (PoP) in Telehouse, Paris where major international bandwidth providers and key telecom operators are present for interconnection, thereby providing end-to-end service at very competitive rates (BOI, 2008).Another underwater cable of East Africa, EASSy (Eastern Africa Submarine Cable Sy stem), will soon add to the bandwidth provided by the SAFE cable. The cable of a length of more than 8000 km will link Mauritius to around 20 countries of the Eastern coast of Africa including Kenya and Madagascar. As such, telecommunications and internet costs, which have already been reduced substantially over the past few years, are deemed to further decrease. The Minister of Information Technology and Telecommunications, has signed the communications protocol for linking Mauritius to the EASSy project on the 20th November 2006. This will give Mauritius a competitive edge in telecommunications costs.PhysicalThe Ebene Cybercity is the first IT Park in the African region. It is spread over an area of 172 acres and with consist of various facilities such as video conferencing, conference halls, 24/7 restaurants and banks. The first Ebene Cyber dominate has already been constructed with many international ITES-BPO players are already operating within the most intelligent building in Mauritius.A second cyber reign is also now operational and has already been booked up to 70%. Among the operators are the French company, Phone Sales Experts, which has already started its activities with 50 employees and an American BPO which has booked five floors and is expected to employ around 600 employees.Political WillingnessThe inscription of the Mauritian government to achieve its goal of making Mauritius a cyber-island has also been reflected over the past few years by its e-government initiatives (e-government, 2004). E-government is the use of ICT to forego public services which provides greater convenience for citizens (G2C) and to businesses (G2B), as well as between different ministries (G2G). Such initiatives includeThe fit up of a Government Online Centre (GOC) as a point of interaction with citizens and businesses.The setting up of a Government Intranet System (GINS) as a strong suit for collaboration between civil service departments.The designation of Chie f Information Officers to champion IT developments and for the provision of learning materials.The approval of international standards to benchmark the midland level of security.Indeed, the government took the initiative to invest in an e-government scheme caravan towards e-management, e-services and e-democracy. E-management consists of computerising all governmental departments while E-services are a platform for the substitution of information between the population and the state. E-democracy on its part is a concept that allows citizens to participate in government decision-making through the posting of queries. Citizens are also provided with e-services such as Application for Lump Sum, Drivers License, Scholarships and Passports are offered online (Govt. Mtius, 2010).The enactment of various legislations for regulating the ICT sector equally reflects such willingness at top level.Attractive Fiscal IncentivesFiscal incentives are being used as a means to increase FDI and in vestment potential in the island. Such differing tax