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


*



The Prisma News

  • Comments, In Focus The US is coming for the homeland of Bolivar!

    The US is coming for the homeland of Bolivar!

    Let’s begin by saying that the US is not coming only for the Bolivarian Republic of Venezuela, they are coming for the whole land. For the entire continent. This is its visible need to recover what it considers itself to be losing. It is to secure the territory in order to protect its political, economic...

    Read more →
  • Comments, EdgeNotes, In Focus Inherent vice

    Inherent vice

    Based on Thomas Pynchon’s 2009 novel of the same name   a film noir set at the tail-end of the 1960s counterculture, as drugs replace booze as the drug of choice.   Steve Latham*   In this dissection of the Californian hippy fantasy Joaquin Phoenix plays the central character Doc Sportello,...

    Read more →
  • Comments, Globe, In Focus, United Kingdom Mining and Misery: two similar words

    Mining and Misery: two similar words

    “Music of the geography of our beautiful country, Colombia” is a phrase that is broadcast daily by a classical station in Bogota, announcing one of its musical programmes. What the producers don’t know, or don’t say, is that this beautiful country with its geography is on the brink of disappearing....

    Read more →
  • Culture, Globe, Listings, Screen, United Kingdom Sons of Cuba

    Sons of Cuba

     This documentary follows the lives of three Cuban boys at the Havana boxing academy as they undergo a tough training regime in the hope of winning the under-12’s national boxing championship. The film is showing on the 18th April in London.   Ever since the revolution in 1959 sport has been seen...

    Read more →
  • Comments, In Focus Dialogue in representative democracy

    Dialogue in representative democracy

    An acquaintance from my neighbourhood had had a recent operation, when my partner found her in the local shop. Everything had gone well while in the hospital, our neighbour asserted, even the fact that she “shared a room with a white woman”.        Mabel Encinas   My partner was shocked...

    Read more →
  • Comments, EdgeNotes, In Focus Black irony

    Black irony

    The Black Cultural Archives in Brixton are based in the renovated historic Raleigh House. Opened in 2014, the Archives are an important centre for African and Caribbean pride and self-identity.   Steve Latham   An assertion of worth in the face of a hostile host culture, the holdings include vast...

    Read more →
  • Comments, In Focus The bull that became a civil servant

    The bull that became a civil servant

    Based on a story that I have been hearing these days, of the unfulfillment and absence of some civil servants before their commitment to the community.   Photo by Davide Baraldi – fotocommunity.it/pc/pc/display/22800761 John Elvis Vera S.   Once upon a time, in an isolated village, a...

    Read more →
  • Culture, Globe, Listings, Multiculture, Our People, Pages, United Kingdom Mexico, the lead at the London Book Fair

    Mexico, the lead at the London Book Fair

    On the occasion of the Dual Year between the Latin American country and the United Kingdom, Mexican cultural representatives will visit the capital of Great Britain.   At the beginning of the year, the cultural exchange between Mexico and the UK began. The year 2015 has been named “The year of...

    Read more →
  • Comments, EdgeNotes, In Focus Interstellar: saving the Earth

    Interstellar: saving the Earth

    A real sci-fi blockbuster, directed by Christopher Nolan and starring Matthew McConaughey, Interstellar is a delight to the eyes and ears.   Steve Latham   The cinematography and the special effects are outstanding and awesome. They really take you to a far-off place outside the known universe. The...

    Read more →
  • Comments, In Focus McCarthy’s shadow over Venezuela

    McCarthy’s shadow over Venezuela

    The hours are counted, the minutes are counted, and we must not allow this crime against humanity to be carried out. – Pablo Picasso.   Ethel and Julius Rosenberg Armando Orozco Tovar   The USAmerican Jewish couple Julius and Ethel Rosenberg were accused of spying for the USSR, and sentenced...

    Read more →
  • Culture, Globe, Latin America, Music Mexico pays tribute to Morrissey

    Mexico pays tribute to Morrissey

    Mexrrissey is a new band inspired by the songs of the ex-vocalist of The Smiths. They will be touring England between the 25th of April and the 1st of May.   The group of Mexican musicians is led by Camilo Lara from the Instituto Mexicano del Sonido and Sergio Mendoza, from Orkesta Mendoza/Calexico....

    Read more →
  • Culture, Globe, Screen, United Kingdom “Wild Tales”: dark humour and social frustration

    “Wild Tales”: dark humour and social frustration

    Directed by Damián Szifrón, this film tells six independent stories set in Latin America, all with converging plots, fun and violence.   Juanjo Andrés Cuervo   Recently released in the UK, this Argentine cinematic production shows how characters are incapable of controlling their impulses...

    Read more →
  • Culture, Globe, Latin America, Listings, Screen, Struggles, Workers The war against democracy

    The war against democracy

    This is the title of a documentary directed by Australian reporter, John Pilger, that exposes the long history of interventionism by the United States in Latin American countries. The majority of the subject matter revolves around the failed coup d’etat in 2002 against President Hugo Chavez. The film...

    Read more →
  • Culture, Listings, Migrants, Multiculture, On Stage Circolombia returns to London

    Circolombia returns to London

    Following the success of their 2011 show ‘Urban’, the Colombian circus company returns to the UK from the 14th April to 3rd May for their new show ‘Acelere’.   With fourteen of the country’s most prominent circus performers, the new show draws is inspired by Colombia’s rich diversity of...

    Read more →
  • Comments, EdgeNotes, In Focus London on speed

    London on speed

    The drug-related language – London ‘on speed’, the ‘rush’ of city life – is deliberate. Like an addiction, the speeded-up, souped-up urban lifestyle sweeps us along in a hectic race.   Steve Latham   James Gleick wrote his book, “Faster”, on the topic; and French...

    Read more →
  • Comments, In Focus Carlos Arango: a true journalist

    Carlos Arango: a true journalist

    Gran told me about my father’s childhood. She recalled how as a child, he took lunch to the workers on the Antioquia Railway.   Armando Orozco Tovar   Carlos Arango Z was his name and he started working at just six-years-old to help support his family. From Tulúa, in the Cauca Valley to...

    Read more →
  • Culture, Visual Arts Van Gogh: fury, genius and pain

    Van Gogh: fury, genius and pain

    The certainty that Montmajour at Sunset was painted by the Dutchman Vincent Van Gogh Dutch revives the madness that the unique viewpoint of this artistic genius always produces.    Frade Ibis Brito   In fact, the Van Gogh Museum in Amsterdam has announced to the world the discovery of this new work...

    Read more →
  • Culture, Listings, Multiculture, Music, Our People Willy Claure, on Cueca rhythm

    Willy Claure, on Cueca rhythm

    On Tuesday the 24th of March the Bolivian guitarist and composer will give his first UK concert at the Bolivar Hall in London.   With a career lasting more than 30 years, Claure is one of the most outstanding guitarists in modern-day Bolivia. His repertoire is essentially based on popular, traditional...

    Read more →
  • Comments, In Focus Democracies

    Democracies

    In principle, the term “democracy” implies that the people (demos) are in power (kratos) and thus, that they participate.   Mabel Encinas   However, by contrast with participatory democracies, in representative democracies, we need to ask ourselves whom the government represents and who the...

    Read more →
  • Comments, EdgeNotes, In Focus Urban revolution now

    Urban revolution now

    On Tuesday I was invited to a book launch organised by the Urban Hub at University College London. The book was Urban Revolution Now: Henri Lefebvre in Urban Research and Architecture.   Steve Latham   Edited by academics Łukasz Stanek, Christian Schmid, and Ákos Moravánszky, the book was a...

    Read more →