Software Development

In recent years, Costa Rica's software industry has emerged as one of the most dynamic industries in Latin America, enjoying explosive growth. There are now more than 300 companies in Costa Rica ranging from small to large- developing software companies that serve both the local and international markets, offering high quality products. Big names in the local industry are ArtinSoft, Sysde, Lidersoft, Codisa, Exactus, TecApro, along with many more local successful experiences.

Costa Rica also hosts important global players in this industry, such as Intel, Microsoft, Unisys and Oracle, which (and they) have designed and developed strong strategic alliances with local software producers. Intel, which currently stands as the largest multinational with operations in Costa Rica, has started developing software through its Latin American Engineering Services Group (LAES) based in the country. It has also invested in Artinsoft, while Microsoft has established a strategic alliance with this same company, which has developed the most advanced software in the world for migrating software from different languages. Likewise, Procter & Gamble has reached an agreement with Exactus, another local firm that addresses its software needs and requirements worldwide. It is also worth noting that CISCO Systems -which specializes in internet networks- opened a $2million technological solution center to provide technical support to its customers in Central America, the Caribbean, Venezuela, Colombia and Ecuador. Even though the target markets are larger than Costa Rica, the performance of their operation has been so successful that the corporation decided to coordinate its regional operations from Costa Rica.

 
In recent years, as part of a private effort, the Training Center in Information Technologies (CENFOTEC) was created to provide supplementary training solutions in the software industry. This center has been very successful and has also become a special-purpose educational institution, offering a flexible infrastructure that provides a quick response to market needs.

The Opportunity

General aspects

Choosing the right location for a service operation requires considering many critical factors, such as: proximity to market, availability of a highly ethical and skilled labor force, a good technological infrastructure and a stable political and economic environment.

In a recent A.T. Kearney survey, Costa Rica was classified among the best 25 countries in the world to establish offshore operations, based on an index that considers people skills and availability, as well as the business environment and its financial structure. Costa Rica, which ranks as the 16th ideal location in this study, is cited as a country that "offers competitive costs, the best English-language proficiency among the Latin American countries surveyed, and a relatively friendly business environment - for example, the government has set up free trade zones that offer tax and other benefits" (A.T. Kearney; 2004; Offshore Location Attractiveness Index).

Costa Rica has an excellent location right in the middle of the Americas. To this respect, Costa Rica's time zone is the same as CST in the United States. In addition, a direct flight from Miami lasts only 2:30 hours.

Costa Rica offers the opportunity to develop a solid business structure that will guarantee a competitive advantage in the marketplace, with operations ranging from shared services (back offices), contact centers (call centers), data centers, software development to design and engineering.

"Costa Rica Nearshore Alternative"

Human resources

With a literacy rate of 94.9% and some of the highest rankings in the several indexes of human development in the hemisphere, as stated in the Human Development Report 2006, Costa Rica offers an ideal location for high tech and services companies.

Moreover, the 2006 Global Competitiveness Report ranked Costa Rica as one of the top Latin American countries according to its Technology Index based on the quality of its environment for innovation, the capability to receive international technology and export goods with technological content, and the degree of absorption of new information and telecommunications technologies. The same report placed Costa Rica as the second most competitive country in Latin America.

Likewise, the Human Development Report 2006 placed Costa Rica within the highest quarter of countries surveyed (a total of 177) as regards to investment in technology creation, a variable that considers years of schooling, R&D expenditures, as well as the number of scientists and engineers in R&D.

Education in Costa Rica is universal, free and compulsory since 1870. Elementary schools promote a new approach to education that goes beyond teaching how to read and write, and have established programs intended to guarantee world-class literacy in computer sciences and English as a second language. In fact, 82.5% of all Secondary Education students, and 50% of all elementary students have computer-based education. English as a second language is nearly universal in Secondary Education. The Government has put special interest in providing increased resources to enhance existing English programs and create additional ones nationwide. As a result, a unique, free and widespread education system allows firms to find a wide array of human resources at various levels, from technical schools to university degrees.

At a technical level, free training programs have been developed in order to address appropriately the requirements of both local and international corporations in specific sectors, therefore allowing Costa Rican technicians not only to work on the cutting edge of technology but to maintain at the same time a productivity rate which is 20% higher than that of workers of other countries in the Americas. The leading educational centers offering this type of training, as well as the main universities are:

 
Costa Rican engineers and technicians guarantee high productivity, low turnover, and cost competitiveness to highly demanding high-technology operations.

Infrastructure

Telecommunications

Costa Rica enjoys direct worldwide fiber optic access through Maya 1 and Arcos 1 underwater cables, which allows for a redundant fiber optics network. The initial capacity of the Maya 1 cable connection is 7.5 Mbps with full capacity of 20 Mbps. In the case of Arcos, initial capacity amounts to 15 Mbps and were capable to expand to 1044 Mbps in 2005. In addition, starting in October 2006, a new Global Crossing 2,4 Gbps submarine cable will be available for companies interested in networking or receiving redundancy through the Pacific.

International communication services are provided through a wide variety of set-ups to match specific customer needs. Some of these are:

• Dedicated Internet Access
• Digital point-to-point links
• Transportation Networks with fiber and wireless digital technology (Frame Relay, TDMA)
• Leased Channels using satellite facilities (RACSASAT)
• VSAT networks
• X.25 networks

Throughout the last five years, telecom infrastructure has positively expanded not only as regards to its scope of coverage but in terms of the variety of services it offers. As stated in the following chart, major developments have taken place, particularly regarding cellular phones, installed capacity of underwater cable and new Internet connections.

Source: Instituto Costarricense de Electricidad (ICE). August 2005 Infrastructure/telecommunications

An ICE project known as "Advanced Internet", geared at transforming Costa Rica into one of the five best-connected countries in the world, has been already launched. It has the following features:

• DSL network
• High capacity
• Dedicated wide band connections
• Low connection costs
• Compatible with current platforms
• Designed for migration capabilities towards future technologies

In addition, starting in October 2005, RACSA began offering across-the-board broadband access (512/128) through cable modem to residential and small businesses, and plans to deliver Wi-Max wireless, DSL and PLC connectivity in 2006 to customers located in San Jose's metropolitan area.

Detailed information about specific telecommunication services can be found in this same site through the following link

Infraestructure/Electric Energy

Electric Power

Abundant and reliable power, available throughout the country, is generated through hydroelectric (80.54%), geothermal (15.45%), wind power (1.37%) and other sources (2.64%).

Costa Rica generates sufficient electricity to not only fulfill its own domestic needs, but also to export electrical power to other neighboring Central American countries. According to the National Electric Company (ICE), the total installed energy capacity as of June, 2004 was approximately 1,962 MW, with a maximum demand of 1,265 MW and a surplus availability of almost 700 MW.

Detailed information about specific energy services can be found in this same site through the following link.

Established Companies

Testimonials

"From our perspective Costa Rica is the best option for investment because of its quality people, affordable cost, high productivity, superior education, strategic geographic location and political stability"
Flora Solera
General Manager
Sykes CR
Call Center

"The quality of education we found in C.R. is impressive. We have confirmed that the talent and training of the people is one of the best we have seen worldwide...
Alfonso Cos
Vice President for GBS North America
Procter & Gamble
Shared Service

"After evaluating results from the first week of operations in Costa Rica, the corporate office decided to transfer here all contact center operations....
Huber Matos
General Manager
Alienware
Call Center