…A window of opportunity for Ghana
Global Business Services (GBS) in recent years has emerged as an economic powerhouse, driving job creation, revenue generation, and economic diversification across the globe.
From bustling metropolitan hubs to emerging markets, GBS is reshaping the economic landscape, bringing prosperity and growth to many regions.
As a sequel to the first article on the ‘GBS focus series,’ put together by the Institute of ICT Professionals Ghana and the Deutsche Gesellschaft für Internationale Zusammenarbeit (GIZ) GmbH, this article provides further insight into the economic impact of GBS.
Global Statistics: Job Creation and Revenue Generation
The GBS sector has proven to be a major employment engine worldwide. According to recent industry reports, GBS has created in 2023 alone an estimated 5 million jobs globally.
These job roles include platform and digital service delivery, coding, software development, tech support, contact center agents, helpdesk support agents, back-office operations, content management services, payroll and HR services, and web services.
The global workforce of the GBS sector is close to 43 million people, with Asia Pacific alone employing close to 14 million people. Africa currently employs an estimated 1.02million people, contributing to 2.5% of the global workforce.
In terms of revenue, the numbers are equally impressive. The global GBS market has been growing at an exponential rate. In 2023, it was estimated at around $1.01 trillion annually. Key regions driving this growth include North America, Western Europe, and GBS stalwart economies like India and the Philippines. These regions have become hotspots for GBS operations, attracting multinational companies seeking cost efficiencies and access to skilled labor.
Although, still emerging, Africa has also been a location of interest for GBS companies. African countries like Egypt, has one of the largest GBS workforce, and has consistently ranked 4th on the Most Favored CX Offshore Delivery Point; an index for ranking the best locations for GBS worldwide.
In addition, South Africa; considered as the most mature market in Africa for global outsourced service delivery, has tied many times with India on the Most Favored CX Offshore Delivery Point. Other emerging locations in Africa include Ghana, Kenya, Nigeria, Ethiopia, Morrocco and Rwanda.
GBS and GDP Growth: A Symbiotic Relationship
GBS plays a critical role in boosting the GDP of many nations. By providing high-value services and creating well-paying jobs, GBS stimulates economic activity and contributes to overall economic growth. For instance, in India, the GBS sector has been a major driver of the country’s GDP, contributing approximately 7.7% in 2022. This growth is attributed to the influx of foreign investments and the establishment of many GBS centers across the country.
Furthermore, GBS aids in economic diversification. Countries traditionally reliant on agriculture or manufacturing are now finding new avenues of growth through GBS. The sector helps reduce economic dependency on a single industry, making economies more resilient to global market fluctuations. For example, South Africa has leveraged its strategic location and multilingual workforce to attract GBS operations. This strategy has diversified its economy and reduced reliance on mining and agriculture.
Transforming Developing Economies: The GBS Success Story
Several developing economies can serve as good examples of the economic opportunity the GBS sector offers. For example, the Philippines, once heavily dependent on agriculture, has been transformed into a global BPO (Business Process Outsourcing) powerhouse.
The GBS sector now employs over 1.3 million Filipinos and generates approximately $30 billion in annual revenue. This transformation has created jobs, spurred the development of urban infrastructure and in the process, improved the standard of living for many.
Similarly, Poland has served as a key nearshoring GBS destination for European companies. With a combination of s a strong educational system, a multilingual workforce, and competitive costs, multinational companies have set up their service delivery centres in cities like Krakow and Warsaw. The GBS sector in Poland employed as at 2022 estimates, over 400,000 people, whilst significantly contributed to the country’s GDP growth.
Developing economies like Ghana truly have a window of opportunity to take advantage of the GBS sector for economic growth. With rising unemployment, an increasing young population and a high population growth rate, the GBS sector stands out as a pillar for job creation.
However, to harness this opportunity, the international audience will have to recognize the potential the country has as a global delivery location, and in parallel the country will have to position itself to offer suitable conditions for GBS sector to thrive.
Challenges and Future Prospects
While the benefits of GBS are undeniable, developing economies face challenges in establishing and sustaining these services. Challenges such as infrastructure deficiencies, regulatory hurdles, and talent suitability can impede the attractiveness of the country to prospective GBS companies. However, with the right policies, support and incentives for investments, these challenges can be addressed.
An example is the technical support provided by the Special Initiative “Decent Work for a Just Transition,” implemented by GIZ on behalf of the German Federal Ministry for Economic Cooperation and Development (BMZ). The continuous support seeks to boost the job-growth potential of the GBS sector in Ghana and 7 other African countries. Through this initiative, the potential of partner countries has been highlighted in the global GBS market, and individual companies have in turn taken steps to create jobs in the sector.
Looking ahead, the future of GBS appears bright. As technology continues to advance and businesses increasingly adopt digital transformation, the demand for GBS is expected to rise. Emerging technologies like artificial intelligence, machine learning, and robotic process automation will enhance the efficiency of GBS operations.
Conclusion
Global Business Services is not just a trend; it is a powerful economic catalyst transforming nations. By creating jobs, generating revenue, and fostering economic diversification, GBS is playing a pivotal role in shaping the future of the global economy.
For countries like Ghana, the potential of GBS could be a game-changer. By strategically investing in infrastructure, enhancing the skill set of the workforce, and creating a conducive business environment, Ghana can position itself as a key player in the global GBS landscape. If Ghana and other nations continue to harness the potential of GBS, the economic benefits will only multiply, paving the way for a more prosperous and resilient future.
This article is written in cooperation with the Institute of ICT Professionals Ghana and the Special Initiative ‘Decent Work for a Just Transition”, an initiative of the German Federal Ministry for Economic Cooperation and Development (BMZ) and implemented by GIZ.
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