1 Overview of the Chilean IT Industry Raul Ciudad Director Chamber of Chilean IT Companies VIII Reunión Conjunta del Consejo Bilateral de Negocios Chile - Taiwán Index Introduction The Chilean Business Environment Country Competitive Assessment The IT Industry Summary
2 Introduction Chilean Association of Information Technology Companies (ACTI) Founded in 1984 (25 years) ACTI includes IT companies specialized in hardware, software, services, systems integration, IT enabled services. 200 members. Industry Employment: people 60% related to SW and SW services Our Services IT industry promotion in Chile and abroad Partnering with Government to formulate IT policies Helping Collaboration among members Promoting quality standards and Intellectual Property rights CORFO operating agent and seed capital sponsor Corporate social responsibility ACTi is part of
3 The Chilean Business Environment Key Facts about Chile Leader in the Region: Chile stands out in the Region. It is an interesting platform for doing business and it has received important long term investors (Telecommunications, Sanitary services, Infrastructure, Transportation, Ports, Energy, Mining, Finance and Services). Sound Infrastructure: good infrastructure and IT capabilities. Good level of IT investment: Companies in Chile invest about 2.0% of the annual budget in Technology (ENTI, UC Study). Chile has the largest corporate IT investment in the region. Focus on Innovation and Digital Strategy: Chilean government has launched several programs to promote Innovation and a Digital Strategy to foster the Information Society.
4 Focus on Innovation and Information Society Estrategia Digital was launched in January of This public plan includes: internet and broadband access, education & training, e- government, industry development and legal framework. The government is offering a scholarship program that cover the costs of English courses for students, professionals and technicians of ICT industry. The President announced a scholarship program for postgraduate and doctoral students for professionals. (program will be funded with the interests of the $6 billion fund) R&D Tax Incentives Law will give a 35% credit for IT R&D investment. The National Council of Innovation for Competitiveness identified Global Services" as a key cluster to develop in Chile, creating the National Council of Offshoring. ACTI is part of it. Country Competitive Assessment
5 Benchmarking Chile Country Global Competitiveness Competitiveness Index , WEF: Ranks 28 among 125 countries. Country Rank Country Rank United State 1 Chile 28 Switzerland 2 Spain 29 Denmark 3 Panama 58 Sweden 4 Mexico 60 Taiwan 17 Brazil 64 Denmark USA Singapore Taiwan, China UK Spain Chile China Thailand India Costa Rica Brazil Mexico Argentina IT Readiness The Networked Readiness Index (NRI) 2008, WEF: Ranks 39 among 134 countries. 87 Benchmarking Chile Offshoring attractiveness Global Services Location Index A.T. Kearney: Ranks among the 10 most attractive countries for offshoring services.
6 Business attractiveness Doing Business The World Bank Group: Rank 40 among 181 countries. Benchmarking Chile Singapore United States 40 United Kingdom Chile Spain Colombia Mexico Peru Italy Czech Republic Argentina Chile has more than 57 Trade Agreements, in different countries around the world, including countries like Canada, United States, Mexico, China, Korea, European Union and India. Chile has agreements with 20 countries Double Taxation: Argentina, Brazil, Canada, SouthKorea, Croatia, Denmark, Ecuador, Spain, France, Ireland, Malaysia, Mexico, Norway, New Zealand, Paraguay, Peru, Poland, Portugal, United Kingdom and Sweden. Chilean markets are open with very low import duties: General: 6% Hardware: 0% (GAP) Software: 10% - 15% (withholding tax) Services: 10% -20% withholding tax The IT Industry
7 Chile IT Investments (USD M) USD M , ,167 3,300 8% 4% Services IT Software Hardware (Forecast) 2010 (Forecast) Source: IDC, Sponsored by ACTI Hardware Market, (*) ,852 1,943 1,980 Otros Networking Storage USD M Servers Printers PCs Source: IDC, (*)Forecast (*) 2010(*)
8 Software Market, (*) Applications USD M Application D&D System Infrastructure Software Source: IDC, (*)Forecast (*) 2010(*) Services Market, (*) Operations Management Support Services 700 Implementation 600 Planning MUSD Training and Education 0 Source: IDC, (*)Forecast (*) 2010(*)
9 Market by verticals, 2008 (USD M) $736 Source: IDC, 2009 Chile, Personal Computer Market, , , , , , , ,520 3,510 2,910 Desktop Notebook Others Source: IDC, 2009.
10 Chile, Personal Computer Market, 2008 (%) Ultraportable 1,67% Workstations NB 0,79% Workstations DT 1,10% Desktop 42,42% Notebook 54,02% Source: IDC, 2009 Chilean IT Exports and Global Services USD Million Source: IDC, 2009 Offshoring Cluster hired IDC to measure this number properly ACTI is opening a Business Platform (Promotion Office) for offshoring in key US cities and is planning to do the same in other Latin American Countries.
11 Summary Chile is a good partner to develop IT business in the region and abroad Chile has a good infrastructure and focus on IT development The government is developing several key programs to promote Innovation and R&D Chile is well positioned culturally and geographically to tackle opportunities in the US and Latam Thank You!