A RECENT report on Jordan's IT sector suggests it could create 30,000 new jobs and generate $550 million a year in exports by 2004.* That is quite a jump for an industry which currently employs an estimated 1,250 people and generated just $7 million-10 million in exports in 1998. However, young Jordanians are flocking to the sector, local universities produce 2,500 IT graduates a year, and exports are estimated to be doubling every 12 months.

The US Agency for International Development, which financed the report, in late September organised a seminar to put Jordan's IT companies together with representatives of major US firms, including Compaq, the Harvard Computer Group and Neill & Company. The idea was to see how Jordan could increase its share of the exploding outsourcing market in the US. Local companies are happy to have the support, but they are also getting on with the job themselves.

When Hatem Zeine established Zeine Technological Applications in 1991 with four staff, local companies were positioning themselves for the Arabisation market. His first success was Alef, an Arabic language word processor for the US' Apple Macintosh. 'At the time, there wasn't such a thing as a fully customised Arabic word processor,' says Zeine, 'We saw a niche market, spent our own money on development and found a market.' The success of Alef won them a contract from Apple to do the full localisation of all its operating systems. Eight years later, the company is still developing Alef, but it now has 72 staff and virtually all its business is for international clients.

'Jordanian companies have actually made the major regional contribution in a number of areas, including web-site development, Oracle, client server applications and e-commerce,' says Ideal Group president Karim Kawar. Ideal has developed a smart card for a local company as part of an electronic health claim processing system which is attracting interest both from regional and international companies.

Newer companies, such as One World Software Solutions and Integrant, are part of a trend which is seeing US-based companies, usually with an element of Jordanian ownership, establishing Jordanian offices to take advantage of the inexpensive, but skilled local labour.

One World has steered clear of simple subcontracting and is now providing software solutions for hi-tech US companies. 'We are not a 'body-shop' like so many Indian companies' says One World's Basil Qubain, 'We are fully solution-oriented.'

Rami Awad, general manager of the Amman office of San Diego-based Integrant, admits that the company faced some scepticism from US companies when it opened in Jordan in 1997. 'At first US companies did not quite believe Jordan could produce quality work,' he says. 'But now we have proven ourselves and we are planning to expand in Jordan and to open an office in Egypt.'

The industry is still in its infancy but the report shows that companies are already earning annual revenues per employee of $17,480 and export earnings of $6,000. This is well below market leaders such as Israel and Ireland, but in line with the developing world's major subcontractor, India. One of their major problems is holding on to staff with annual turnover among local companies estimated at 30-40 per cent. This is overwhelmingly due to the attractions of the Gulf markets, but early in 1999 companies also found themselves losing staff to Microsoft when the US giant made its first recruitment drive in Jordan.

* The REACH Initiative: Launching Jordan's Software and IT Services Industry. Prepared by TSG of the US, August 1999