Transcript INVESTING IN COSTA RICA

The Costa Rican Experience in IT
Sectors: The Case of Intel
Emmanuel Hess, Director ISS
Contents
1. The ITA and trade in IT products for CR
2. Intel development in CR and its benefits
3. The CR Wi-Max project
4. Future developments
5. Final remarks
1. The ITA and trade in IT products for CR
Costa Rica: Exports composition
2005
Costa Rica: Exports composition
1985
20%
14%
7%
9%
6%
10%
24%
8%
60%
3%
9%
Perishable Products
Electric & Electronic
Textiles & Leather
Precision, Plastic & Medical
Food Products
Others
Perishable Products
Textiles & Leather
Food Products
30%
Electrical & Electronic
Precision, Plastic & Medical
Others
FTZ Exports composition
Scale intensive
100
Resource
intensive
Labor intensive
80
60
40
Differentiated
products
Scientific base
20
0
1994
Source: ECLAC
1997
1998
2000
2002
2003
1. The ITA and trade in IT products for CR
4%
Total ITA exports accounted for
24% of all country exports in 2006,
a 15% increase since 2000.
3% 2%
6%
IC
Computer parts
Semiconductors
52%
CR total ITA Exports
33%
Other IC
Trimmers
Smart cards
2050
2000
1950
1900
Digital monolitic IC makes
for half the share of total
CR IT exports
1850
1800
1750
1700
1650
1600
2000
2006
2. Intel CR Timeline
Intel
Pentium® II
Processor
Site
selection
Intel
Pentium®
Processor
Intel Xeon
Processor
Intel
Celeron™
Processor
Intel Pentium 4
Processor with HT
Technology
Intel Pentium 4
Processor
Intel Chipsets
Intel Pentium III
Processor
Construction
Start of
operations
CR1
LAES
launched
National
Safety Award
Start of
operations
CR3
National
Safety Award
National
Safety Award
National
Safety Award
Community
Service Award
CR site
ISO 14001
certified
Community
Service Award
Community
Service Award
CSR Award
National
Safety Award
Shared
Services
2. Economic benefits of Intel in CR
Direct and indirect effects of Intel on real GDP
 Intel generates one twentieth of
2002
– 2005, percentage participation
6%
The total country GDP.
5%
4%
The indirect impact is equivalent
to 15% of the direct effect.

3%
2%
1%
0%
2002
2003
Direct Impact
2004
2005
Indirect Impact
Proportion of Intel GDP with respect to the Industrial GDP
2002-2005, with direct and indirect effects
27%
The sum of direct and indirect
effects is significant in the economic
area of activity.
25%

23%
21%
19%
In 2005 it reached over 25% of the
entire manufacturing industry.

17%
2002
Direct effects
2003
2004
Indirect effects
2005
2. Economic benefits of Intel in CR
Intel exports have represented an average of 20% of total CR exports
2. Economic benefits of Intel in CR
Consistent growth in Unit exports
3. The CR Wi-Max project
• Wireless technology for greater speed & reach
• Evolution means convergence:
Outdoor CPE deployment
(2005)
Indoor CPE deployment
(2006)
Integrated portable (notebook) solution
(2007)
Integrated mobile 3-play (handset) solution
(2008)
3. The CR Wi-Max project
• How does this benefit DC citizens?
– Last mile infrastructure limitations, especially in rural
areas. Reliable redundancy to Cable, ADSL in urban
areas.
– Telecommuting provides more productivity, increased
working hours and less traffic & environmental problems.
– Intel partnership provides in-country project management,
technical training & technology stabilization.
3. The CR Wi-Max project
• Pilot project (1 base station) launched by RACSA,
which provides licensed spectrum.
• Intel as first customer; 500 connections in total.
“Costa Rica currently has a high level of ability
associated with extending the reach of broadband
services using wireless and particularly WiMAX
technology”
4. Future developments
• Wi-Max:
• 2007: RACSA building 11 base stations around
San Jose.
• 2007: ICE investing $7MM to aim at 2,000
corporate connections
• ICE developing IP network to migrate the national
telecom system and converge voice, data and TV (the
only current convergence in CR is CATV & broadband
Internet)
4. Future developments
• New telecom law (GTL) to liberalize the telecom industry
soon:
• Telecom regulatory authority
(phase I)
• Data networks and Internet services to be open (phase I)
• Cell phone services to competition
(phase II)
• GTL builds on convergence and techonological neutrality
• Access to the public telecom network will be assured
• Private providers could chose their own technologies
End-to-End IPL Pricing Comparison
(Updated March 2007)
Bandwidth
to the US
Panama
El Salvador
& Guatemala
Costa Rica
T1/E1- MRC
$4,000
$48,000
0%
$4,000
$48,000
0%
$6,300
$75,600
36.5%
$25,000
$300,000
0%
$35,000
$420,000
28.6%
$40,000
$480,000
37.7%
Annual
Premium*
DS3 - MRC
Annual
Premium*
* Premium = % higher priced than Panama
5. Final remarks
• For an FDI, knowledge, export-oriented DC like CR ITA
access is and has been vital.
• Intel´s development and its associated benefits have
been a clear example.
• ITA needs to reenforce convergence, where the same
ITA products (such as Wi-Max-related) will constantly
incorporate new technologies and features for the benefit
of large populations in emerging and developing
countries.