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 Rich and poor… Mind the gap!

    Rich and poor… Mind the gap!

    The gap between rich and poor has magnified in the last decades in the UK, and more generally in the whole world. The question is: should we mind the gap?     Mabel Encinas   In the UK, 1% of the population receives 14% of the national income. In the world the 80 richest own the same wealth...

    Read more →
  • Comments, EdgeNotes, In Focus 20,000 Days On Earth

    20,000 Days On Earth

    All power to the new bio-pic about Nick Cave: singer, songwriter, front man for the Bad Seeds, author, all-round polymath and renaissance genius.   Steve Latham   The movie purports to describe a single day in the life of Nick Cave, summing up the 20,000 days of his life. In practice the film...

    Read more →
  • Comments, Culture, In Focus, Pages In defence of youthful expression

    In defence of youthful expression

    Every new generation is apathetic. How can they be otherwise, when the intellectual motivation that comes from books or the older generation’s half-forgotten memories is no match for the experience of being personally committed to a cause?   Armando Orozco Tovar   The older generation of...

    Read more →
  • Culture, Europe, Globe, On Stage An erotic show that subverts the male gaze: UmColetivo

    An erotic show that subverts the male gaze: UmColetivo

    The enunciation of the words is an oral expression, which also exists in sexual relations. But very often the man seems to be the one with the power to speak, here it is the women.   Entrevista: Graham Douglas Potos: Alipio Padilha   The Animatografo is discreetly placed in a very central position...

    Read more →
  • Culture, Listings, Screen El Salvador… through women’s eyes

    El Salvador… through women’s eyes

    Until the 20th of January, the cultural centre, Rich Mix will be hosting the exhibition Stories of El Salvador (Historias de El Salvador). This exhibition tells of the primary role that the women of El Salvador have played during the Central American country’s recent history.   Defying the...

    Read more →
  • Comments, EdgeNotes, In Focus NY – 9/11 Memorial

    NY – 9/11 Memorial

    During our recent trip to New York, my wife and I thought it was only respectful to visit the 9/11 memorial.   Photo by Gabri Micha – Flickr.com Steve Latham   It didn’t feature high on our initial list of priorities for site-seeing. But so many people were insistent that we needed...

    Read more →
  • Comments, Globe, In Focus, Latin America, United Kingdom Mexico-UK, dual year

    Mexico-UK, dual year

    2015 is Mexico-UK Dual Year, a year in which the governments of both countries decided to celebrate each other, and to promote business, cooperation and bilateral relationships. Can we be a part of it?   Mabel Encinas   The disappearance of 43 students from Ayotzinapa in Mexico was the straw...

    Read more →
  • Culture, Globe, Listings, On Stage, United Kingdom Circolombia to return in spring

    Circolombia to return in spring

    Following the resounding success of “Urban” in 2011, circus performance company Circolombia will bring its latest production to the London stage from the 14th of April to the 3rd of May 2015.   Photo from Circolombia Facebook Cristina Lago   The latest Circolombia production is inspired by...

    Read more →
  • Comments, EdgeNotes, In Focus London is dying

    London is dying

    The young people who are critical for any city’s prosperity are leaving London. Property prices, rents and sales are rising so astronomically, that only the super-rich are able to live in there.   Steve Latham   Gentrification often prices people out of inner city areas. Now central London...

    Read more →
  • Comments, In Focus Ernest Hemingway… the sentry and its roar

    Ernest Hemingway… the sentry and its roar

    When I was starting to think of how to take a book, the enormous head of the watching beast turned to me from eternity, roaring. For the Cuban journalist Miriam Rodríguez Betancourt, winner of the José Martí National Journalism Award.   Ernest Hemingway Armando Orozco Tovar   Gabriel ‘Gabo’...

    Read more →
  • Culture, Globe, Latin America, Screen Urban dance and surfing Angola to Brazil: M. Patrocinio

    Urban dance and surfing Angola to Brazil: M. Patrocinio

    Countries once forced together by colonialism and the slave trade, now find connections in cultural entrepreneurship and the Portuguese language. Small independent film-makers have a role in promoting African and Brazilian culture for their contemporary value, not as tourist clichés.   Graham...

    Read more →
  • Comments, EdgeNotes, In Focus I want to be Bo Ningen

    I want to be Bo Ningen

    I went to see Bo Ningen and Savages perform their sonic poem, “Word for the Blind”. An event organised by the Barbican at the Oval Space in East London.   Steve Latham   To use the old cliché: ‘It blew me away’. The piece had been developed by the two bands, using Dadaist poetry as...

    Read more →
  • Comments, In Focus Isidoro Morantes: the guerrilla fighter’s brother who makes shoes

    Isidoro Morantes: the guerrilla fighter’s brother who makes shoes

    Isidoro Morantes still works as a shoemaker in Bogotá, yet his life has been far from easy. He has suffered considerable persecution at the hands of Colombian government security forces as a result of the activities of his brother, Jacobo Arenas, one of the leaders of FARC.   Jacobo Arenas Armando...

    Read more →
  • Comments, In Focus Experience and prejudices

    Experience and prejudices

    A colleague of mine was telling me how she felt awkward speaking to her university tutor, who is a famous academic in the world of sociology. She left me to ponder whether a person’s place within social “hierarchy’”is the only factor in forming relationships with others.   Mabel Encinas   In ...

    Read more →
  • Comments, EdgeNotes, In Focus Killing kids

    Killing kids

    Belgium has become the first European country in modern times to pass legislation permitting child euthanasia. The killing fields have returned, this time in so-called civilised Europe. We are killing kids.   Steve Latham   Strictly speaking the law, passed in February, may not be euthanasia,...

    Read more →
  • Comments, In Focus, Needle's Eye “True Self” or “New Self”?

    “True Self” or “New Self”?

    In an otherwise excellent book, Abbot Christopher Jamison encourages his readers to seek their “true self”“. Is this sheer mysticism, rooted in romantic fantasy?   Nigel Pocock   Do people really have a “true self” lurking deeply within? Waiting to be found, if only we knew how? Even...

    Read more →
  • Comments, Critical Dialogues, Globe, In Focus, United Kingdom The Latin American diaspora: identity and recognition

    The Latin American diaspora: identity and recognition

    Immigrants reconstruct their identities, transfer their customs, traditions and cultural symbols, and adapt themselves to a different environment.   Claudio Chipana*   The Latin–American diasporas are acquiring a growing role and influence around the world, in the construction of Latin–American...

    Read more →
  • Comments, EdgeNotes, In Focus Visiting the Favelas

    Visiting the Favelas

    During the summer I took a team of students to find out about projects in Brazil, especially in the favelas, in particular the shanty towns around Rio de Janeiro.   Steve Latham   We visited one project, run by Youth With A Mission, which developed initiatives to serve and empower the local...

    Read more →
  • Comments, In Focus San Victorino, that vast territory

    San Victorino, that vast territory

    According to Lucas Fernández Piedrahita, “Bogotá was awarded city status on July 27th, 1540. And, in his article “My people”, Alberto Lleras writes “Who knows why everything that is ours was on the side of San Victorino…”   Armando Orozco Tovar   He adds: “On the corner where...

    Read more →
  • Culture, Visual Arts New lands and liquid identities

    New lands and liquid identities

    “Everyone experiences these things differently, it isn’t just instability but also a sense of disquiet, states of being that are difficult to describe”, says photographer Virgilio Ferreira.   Graham Douglas Photos:  Luisa Tavares/ Antonio Perez   The lives of southern Europeans who migrated...

    Read more →