The Costa Rican Silicon Valley

February 25, 2013 04:53 0 comments

The IMF predicts that in 2013 Costa Rica’s economic growth will surpass the world average.  By playing host to numerous leading international corporations in the information and communication technology (TIC) sector, the country has placed itself at an advantage. 

 

 

image_19Ramón Alabau

 

His father worked on a coffee plantation a few kilometres outside of San José yet in contrast, he has swapped the green fields for a computer screen.

He works for one of the US multinationals that have set up headquarters in this Central American country.  His role is to develop and improve wireless networks, work which he carries out in Costa Rica but which serves a worldwide purpose.

image_17 (2)In his office his co-workers are both Costa Rican and natives of other nationalities who all form part of the renowned Silicon Valley of Costa Rica.  The arrival of international corporations has served as a catalyst for the area.  According to predictions made by the World Bank, the Costa Rican economy is set to experience a growth of 4%, a figure which exceeds the Latin American average.

The Prisma talked to Luciano Ciravegna, author of “Promoting Silicon Valleys in Latin America: Lessons from Costa Rica” and professor at the University of London.

image_21Ciravegna reveals Costa Rica’s keys to success in becoming an operations centre for large multinational leaders in the information technology sector.

What is the Silicone Valley effect?

It is the heart of the world’s electronics and software industry, located in the North American state of California.  It is renowned for its mass of large and small scale businesses and for its entrepreneurship.  It is where many of the leading multinationals in this sector were created.  Financially speaking, this cluster of corporations has fuelled the whole of the Californian and  US economy.

For this reason, many Latin American countries are looking to follow suit and the majority begin by promoting policies which facilitate the installation of foreign companies specialising in technology.

image_11 (2)What are the characteristics of the Costa Rican Silicone Valley?

On a global scale, production levels are not as great as China, Taiwan or South Korea.  However, per capita, Costa Rica is Latin America’s primary producer and exporter of electronic and software products.  Furthermore, thanks to successful policies for attracting foreign investment, 10% of the workforce (higher than the US average) is employed in this high-tech industry.

Its success is linked to the fact that Costa Rica is seen as a pacific country and has a skilled workforce.  Costa Rica is now reaping the rewards of several years of state investment in state education.

image_7 (3)What strategy was employed in order for Costa Rica to become an operations centre for large multinationals?

It is important to highlight that success has been achieved in three sectors which are all interrelated; tourism, the software industry and the manufacturing of medical apparatus.

Everything originated from the idea of developing a country brand in order to attract tourism which drew the attention of many American businesses.  Despite lower wages, many employees prefer to work in this Central American country than in other parts of the world.  Its close proximity to the US, agreeable climate and political stability are but a few of its appealing characteristics.   The country has a multinational atmosphere and is home to various immigrant professionals from countries such as Argentina, Venezuela, US, Israel…

How has Costa Rica promoted its country brand?

Let’s just say it has been a long, gradual process.  Costa Rica made a significant effort to promote its name amongst potential investors.  It has invested a lot in this.. During the 80’s it opened an office in New York and gradually opened up others throughout the United States.

image_5 (3)The aim of these offices is to promote the positive aspects of visiting the country.  The arrival of the first tourists and mouth to mouth promotion strengthened the area’s reputation.  Other Latin American territories have tried to do the same but have encountered difficulties in establishing an image capable of overcoming the notions of instability linked to drug trafficking.

Has the Silicone Valley effect had any impact on other areas in Latin America?

Yes and it has had a significant impact on the economic growth of several countries.  Latin America mainly specialises in the services and software sector.  These are clean industries as they cause no pollution.  The majority of production and manufacturing is carried out in Asia.

The greatest impact is seen in the workforce that this industry employs with qualified and generally well paid jobs.

image_16 (2)The biggest advantage is that national industry is benefitted.  Brazil began offering its services to the US and the EU but it now supplies the national market.  It is important that these countries are not just grain and soy bean producers but that they also invest in high-tech industries.

Is it possible that this current growth might become stagnant or disappear?

I do not believe that production could disappear completely, partly because it is an industry which is constantly being up-dated, each year people are buying new mobile phone models.

Over the last few years innovation has increased resulting in the need to provide customers with the services and electronic components that they demand.  Latin America’s challenge is to continue to develop increasingly sophisticated services.  Production costs in South America are more expensive than in Asia which means that the country must invest in levels of sophistication.

image_15 (2)Is Silicon Valley just a synonym for economic impact?

It has introduced a significant level of education into society, we are dealing with specialised professions.  There are individuals who at the age of 16 are already programmers and at 25 years old are sales managers.  Compared to my country, Italy, there are a significantly higher number of skilled professionals in these sectors and with large salaries that would be satisfactory for even young Europeans.

Are there many British companies in Costa Rica’s Silicon Valley?

image_2 (3)No.  The majority are from the US and some from India but there are no British companies in this sector.  This is a reflection of the poor economic relationship that exists between the UK and Latin America.

 Which country is most likely to repeat Costa Rica’s boom?

Undoubtedly, Uruguay has the most similar characteristics.  It has a small and relatively open economy.  The population is well educated and it is already home to a significant cluster of technological corporations.  This country represents competition for Costa Rica.  Chile is another option thanks to its stable economy and success in attracting investors and entrepreneurs through favourable tax and immigration laws.

 

(Translated by Rebecca Hayhurst – E-mail: rhayhurst14@yahoo.com)

Share it / Compartir:

Leave a Reply


*


× 9 = forty five



The Prisma News

  • Comments, EdgeNotes, In Focus Money rules

    Money rules

    Society is being hollowed out by a set of non-values which are overwhelming ever other set of criteria for evaluating worth.   Steve Latham   F. S. Michaels’ book, “Monoculture. How one story is changing everything”, analyses the deep structure of our culture’s infatuation with wealth. It...

    Read more →
  • Culture, Listings, Screen The real drama is in the ‘corridor of death’

    The real drama is in the ‘corridor of death’

    The documentary film ‘Who is Dayani Cristal’ will premiere in British cinemas on July 25th, the story of a migrant whose body was found in this deadly area of desert.   The film is directed by Marc Silver and produced by Gael Garcia Bernal, and is based on real events. The film shows the arduous...

    Read more →
  • Culture, Listings, Pages Don Quijote rides into London

    Don Quijote rides into London

    “The Ingenious Gentleman Don Quijote de la Mancha”, a new play directed and performed by the company Little Soldiers, opens on 23rd July.   By Virginia Moreno Molina   The Little Soldiers company made its debut in London in 2010 with a piece entitled Pakita: Stimulating, Bitter, and Necessary....

    Read more →
  • Culture, Screen “Angola year Zero”: the Wild West of Africa & its identity

    “Angola year Zero”: the Wild West of Africa & its identity

    Huge changes have taken place in both Cuba and Angola especially since the collapse of the USSR in 1991. In both countries the sudden loss of Soviet support led to a crisis, and an increase in migration, out of Cuba and into Angola.   Director Ever Miranda Palacio Graham Douglas   Ever Miranda...

    Read more →
  • Comments, Globe, In Focus, Latin America Praise to forgetfulness

    Praise to forgetfulness

    Fanatical fans are from everywhere not only here in this country of crazy, violent, passionate people… without passion, they want to see themselves reflected in the heroic ball-playing characters, but the next day they still don’t agree on anything.   Armando Orozco Tovar   Forgetfullness...

    Read more →
  • Culture, Pages, Screen A debate: the new and the classic of Zed Books

    A debate: the new and the classic of Zed Books

    This publishing house will inaugurate their first “Open House” event on the 17th of July. It will allow people to find new books and take part in an open debate on various subjects.   Tony Phillips, author of “Europe on the Brink: debt, crisis and dissent in the European periphery”, will...

    Read more →
  • Comments, EdgeNotes, In Focus Playing with dragons

    Playing with dragons

    How do we fill that vast expanse of empty time during the post-university phase of early adult life, before working out what to do with the rest of our lives?   Steve Latham   We drift through endless days, unsure of our purpose, attempting to fill the hours with something, anything, while we cogitate...

    Read more →
  • Comments, In Focus The tower of bats

    The tower of bats

    “We start to talk of food/ when we replace/ water with the essence of blood”. Fabio Arias.   Armando Orozco Tovar   It was during the years when thousands of members of Colombia’s left-wing “Unión Patriótica” party were assassinated throughout the country. At the height of this...

    Read more →
  • Culture, Visual Arts Fred Jordao: cultural cleansing & carnival in Brazil

    Fred Jordao: cultural cleansing & carnival in Brazil

    The carnivals of Rio, Salvador and Recife are different, but the opportunity to make money is homogenising them. Photographer Fred Jordao from Recife decided he was more interested in the popular festivals put on by the poorest people in the outer areas of the city, with no patronage or financial support.     Carnaval...

    Read more →
  • Comments, Critical Dialogues, In Focus Recognition as a ontological and human relationship

    Recognition as a ontological and human relationship

    Recognition is looking in the mirror at the other to build a community that is not homogeneous but diverse.   Claudio Chipana G.   Here are some thoughts on the issue of recognition. Recognition in its broadest sense embraces the individual in their uniqueness and in the constitution of the...

    Read more →
  • Comments, Globe, In Focus, United Kingdom NHS on a knife edge

    NHS on a knife edge

    The Commonwealth Fund has just released a report that rates the NHS the best value for money health service in the developed world.   Naomi Beer   They also rate the US system the worst, yet this government (and previous governments) are taking us headlong into the American style system which...

    Read more →
  • Comments, EdgeNotes, In Focus Cognitive counter-revolution

    Cognitive counter-revolution

    Cognitive Behavioural Therapy (CBT), developed by Albert Ellis, is the latest fad to sweep the world of counselling. And I have benefitted personally. Steve Latham   Claiming to be based on rigorous empirical research, CBT is supposedly superior to old-fashioned psycho-therapy, with its time-consuming...

    Read more →
  • Comments, In Focus Just like Planet Earth

    Just like Planet Earth

    On a blanket of artificial grass amongst the sound of loud-mouthed announcers, men run from one side to another, moving like in a dance arms and legs back and forth, back and forth…   Armando Orozco Tovar   They advance, they retreat, they fall down, and they get right back up. Others...

    Read more →
  • Culture, Globe, Listings, United Kingdom, Visual Arts Full Contact 2014… open call for photography

    Full Contact 2014… open call for photography

    Tarragona welcomes a new edition of the International Scan Photography Festival, which is organising a gathering between artists and fans to discuss and share ideas about this art form. The event will take place on the 24th and 25th of October, following the selection of the in June.   Once again, the...

    Read more →
  • Comments, In Focus, Struggles, Trade Unions, Workers Deprived of General Practice?

    Deprived of General Practice?

    As a GP, working in the inner city for 25 years, I have a problem and it is not the patients I deal with on a daily basis. My problem is that I know what is happening to General Practice and the NHS but the public who use the service do not.    Naomi Beer   They are told that General Practice...

    Read more →
  • Economy, Globe, Lifestyle, Ludotheque, World The Internet continues to revolutionise world trade

    The Internet continues to revolutionise world trade

    The “World Wide Web” is thought of as the source of a revolutionary trend in the way that goods and services are traded over computer networks, giving rise to so-called e-commerce, which has been generating so much interest in the businesses sector.   Masiel Fernández Bolaños   A recent...

    Read more →
  • Comments, EdgeNotes, In Focus King’s Cross is a non-place

    King’s Cross is a non-place

    Behind King’s Cross railway station in London lays one of the most exciting capital city regeneration schemes in Europe.   Steve Latham   A multi-billion pound rebuilding programme is replacing the old goods yards with many square feet of offices, businesses, accommodation, and university or research...

    Read more →
  • Comments, In Focus Humans and objects

    Humans and objects

    The idea that people use people is quite common nowadays. It seems acceptable that we are seen or we see others as objects.   Mabel Encinas   This can be such an everyday idea that it may sound familiar that you can use your colleague to convince your boss or use your children to win a argument...

    Read more →
  • Culture, Guide, Visual Arts Pinta London, five years of bringing art

    Pinta London, five years of bringing art

    Alfredo Esposito, Energy 2 On its fifth anniversary, this unique Art Fair in London is dedicated to Latin-American art and committed to a new generation of artists, while also recognising the continued lack of women in the art world. The event will be held from the 12th to 15th of June.   Central...

    Read more →
  • Comments, In Focus Denis Fernando: “Racist attacks are common in the UK”

    Denis Fernando: “Racist attacks are common in the UK”

    The government has created a smoke screen of “migration” in order to cover up economic and social reality by blaming immigrants. Many believe it, others do not, but all the same, they do not want foreigners in their home. This was once a country that continually welcomed immigrants; today it appears...

    Read more →