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Latin America has grown to be a region of great promise for the global sourcing industry. It has the attributes that have made emerging markets attractive to outsourcers, such as low wages, modern and extensive infrastructure, sizeable talent pool etc.
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This report is solely for the use of Zinnov client and Zinnov personnel. No part of it may be circulated, quoted, or reproduced for distribution outside the client organization without prior written approval from Zinnov
An Overview of Latin American Talent March , 2011
Scope
Objective
This report is intended to provide location and talent pool information across key cities in Latin America (highlighted in the map). More specifically, the report looks at following key dimensions for analysis Location insights
Business landscape Regulations Government Initiatives Incentives Infrastructure & Connectivity English Proficiency Geopolitical environment Quality of life, Cultural compatibility & Cost of living Risks
Talent ecosystem Overall talent pool availability (at a country level) Talent pool across specific domains including IT
Services, Product development (Hardware & Software), BPO and Tech support
Talent pool distribution by innovation and support activities
Panama City, Panama Heredia, Costa Rica
Santiago, Chile
Bogota, Colombia
Buenos Aires, Argentina
Campinas, Brazil
Eldorado del sur, Brazil
Support / Innovation Center
Support Center
PREVIEW REPORT The current document is a preview to the complete study and covers one city, Campinas
(Brazil) on the location and talent pool aspects
Agenda
Location Analysis
Buenos Aires (Argentina)
Panama City (Panama)
Campinas – Sao Paulo (Brazil)
Eldorado – Porto Alegra (Brazil)
Santiago (Chile)
Bogota (Colombia)
Heredia (Costa Rica)
PREVIEW REPORT The current document is a preview to
the complete study and covers one city, Campinas (Brazil) on the location and talent pool aspects
Campinas, the third largest city in the state of Sao Paulo in Brazil, is a major economic and commercial hub
City Overview
– Campinas is one of the major cities in the state of Sao Paulo and the 10th richest city in Brazil
– It represents 0.96 percent of all Brazilian GDP2
– The literacy rate of Campinas city is around 95.01 percent and Human Development Index is 0.852 which is considered quite high
– The city concentrates around one-third of industrial production of Sao Paulo state6
– Campinas' main economic activities are agriculture , auto, machinery, telecommunications, e-commerce and services4
– The prominent services sourced from Campinas include hosting, application support & development and customization4
– Portuguese is the official national language, and thus the primary language taught in schools. But English and Spanish are part of the official high school curriculum
– Campinas has a large number of educational institutes as well as technical schools. The University of Campinas (UniCamp) produces 1,935 graduate and post -graduate students every year and is also ranked as the institution producing the highest number of patents in Brazil5
– The region around Campinas is known as the Brazilian “Silicon Valley” due to the presence of a large number of research centers, universities (13), high tech industries and MNCs5
Campinas (Brazil) Overview
Source: Map – www.holidaycity.com/Brazil
1. Brazilian Institute of Geography and Statistics, 2. CIA – World Fact Book / Brazil, 3. Zinnov Research and Analysis 4. KPMG Global Frontier Report, 5. NaiGlobal, Global Market Report (Campinas), 2008 6. http://wn.com/campinas
City Statistics
City Population1 (2010 Census) 1,080,999
Population Growth Rate1 1.8%
City Area1 795.6 KM2
Official Language2 Portuguese
GDP (Campinas Metropolitan Area) USD 42 Billion
The city boasts of having a number of prominent high-tech MNCs such as IBM, Cisco etc., thanks to recent government initiatives to promote the outsourcing industry
Business Landscape
-
Incentives
Measuring Business Regulations4
Government Initiatives
• The region hosts more than 10,000 medium and large companies, many of which are among the 1,000 largest and best in Brazil1
• The Campinas Metropolitan Region is home to many national and international high-tech industries, including IBM, Motorola, Freescale, Lucent, Nortel, Compaq, Celestica, Samsung, Alcatel, Bosch, TI
• The largest companies have a global turnover of more than USD 80 billion, larger than many Latin American countries1
• Sao Paulo / Campinas offers local tax incentives for IT firms to set up offices . The following are some of the benefits offered:
• Reduction in social security contributions up to 50 percent1
• PIS/Cofins tax exemption for products purchased for export
• Reduction in tax rates on services to two percent3
• Reduction in amount of Annual Real Estate tax from 30 to 50 percent3
• Exemptions from fees and emoluments3
Qualitative Analysis
Note: Ease of Doing Business Ratings are done at country level
Source: 1. Wiki Encyclopedia / Campinas 2. ww.campinas.sp.gov.br 3. KPMG Global Frontier Reports 4. Ease of Doing Business – World Bank 5. Zinnov Research and Analysis
• Brazil is ranked 120th worldwide (2011 ranking) for ease of doing business at the country level (high ranking indicates the regulatory environment is more conducive to starting and operation of a local firm)
• In terms of starting a business, its world wide rank is 125 while it’s 148 when it comes to paying taxes
• Campinas boasts the largest number of high-tech business incubators and industrial parks (a total of eight)
• The Secretariat of International Cooperation (SMCI) was created with main goals as the following:
• Attraction and facilitation for the arrival of new investments to the city
• Expansion of activities of companies that are already established in the city
• Perpetuation of the relations between the city, its international community and partners
Campinas (Brazil)
Infrastructure
Geopolitical Environment
Connectivity
English Proficiency
These MNCs were attracted by the excellent infrastructure support from the city and availability of English speaking talent pool
• English language skills are limited but education in English is being encouraged3
• The official language is Portuguese, though Spanish and French are also commonly spoken languages2
• English is often studied in schools and increasingly in private courses. It has replaced French as the principal second language among educated people1
• Campinas is a major transportation and telecommunications hub for the State of Sao Paulo, as it is located on the major highways that connect the capital to the Northwest and Northern parts of the State
• Campinas has 1 five-star hotel and several other four-star hotels in the city, with a total of about 3,900 rooms3
• A scientific and technological park has been planned in Campinas, and is intended to be a hub for R&D activities and also offer incubation facilities for technology companies4
• The violence and crime rates are particularly high in the Campinas City including robbery ,kidnapping and cargo theft. In 2006 the Campinas government partnered with Bosch and put in a security system with around 270 CCTVs to keep the crime rate under check3
• The state of Sao Paulo witnessed criminal attacks against the police and some civilians in May 2006,which led to several casualties3
Qualitative Analysis
•The highway road system in Sao Paulo is one of the best in Latin American cities with a length of around 34,650 km
•More than 90 percent of population dwells within 5km of a paved road •Traffic congestion is common during peak hours in some parts of the city3 •Viracopos International Airport is located 14 kilometers (8.7 mi) from downtown Campinas and
99 kilometers (62 mi) from the city of São Paulo, and can be reached by the highways2
Source: 1. Wiki Encyclopedia / Campinas 2. www.campinas.sp.gov.br 3. KPMG Global Frontier Reports 4. University of Campinas, website 5. Zinnov Research and Analysis
Campinas (Brazil)
In addition, low cost of living & a truly cosmopolitan culture has helped attract professionals from other locations turning the region into a breeding ground for quality talent
Key Highlights of Campinas
Quality of Life •Sao Paulo has a quality of life ranking as
119th 1, 11th in Latin America according to the Quality of Living survey by Mercer •According to a study from Getúlio Vargas
Foundation, this is the best city to work in the country 3
Catastrophic Risks
• Some parts of the city are prone to floods, especially in summer 5
• On February 17th 2003, a storm caused by a cold front impacted a large area of Southeastern Brazil and in Campinas this event was the second severest in 120 years according to the Ins-t i tuto Ag ronômi co de Campina s 6
Talent Pool
Note: Cost of living index provided is relative to New Yorl City (NYC), which means that for New York City, each index is 100(%)
Source: 1. Mercer Quality of Living Survey 2. Numbeo Database for Cost of living worldwide 3. www.campinas.sp.gov.br 4. Zinnov Research and Analysis 5. KPMG Global Frontier Reports, 6. http://www.ige.unicamp.br
Cost of Living Index2
• The cost of living in Sao Paulo is one of the lowest among global cities. It ranks 161 (of the 241 cities) according to the Cost of Living Survey by Mercer.
• Consumer Price Index (Exc. Rent): 92.35 • Rent Index: 33.80 • Groceries Index: 53.93 • Restaurants Index: 64.03 • Local Purchasing Power: 56.38
Cultural Compatibility
• Sao Paulo is home to the largest Asian population in Brazil, as well to the largest Japanese community outside of Japan itself
• 0.9 % of population in Campinas is Asians 3. 75 percent of the population comprises of whites 3
• Languages used in Campinas are Portuguese, English and Spanish
• The city does not have many places for tourist attraction unlike other Latin American cities 3
Campinas (Brazil)
Filter 1 Population above the
legal age
Filter 2 Employed Population in
Organized Sector
Legally Employable Population1
Working Population
Brazil’s Total
Population
Labor force distribution1
Filter 3 Sector
analysis
203.4 million 149.9 million 103.6 million
Industry: 14%
Service: 66%
Agriculture: 20%
Sao Paulo's population is growing at 1.8 percent
More than 70 percent of Brazil’s total population is legally employable
Demographics
The legally employable age in Brazil is 14 years
Extensive social security and labor regulations govern employer/ employee relations
Legal Environment
Unemployment rate is around 9.3 percent1
Over 60 percent of the working population is employed in services industry1
Resource Details
Talent Pool
Note: The above data is country specific. City specific research is in progress, 1. Legally employable population constitutes of the total population >14 yrs of age 2. Working population constitutes of the total labor force in urban areas of Brazil (2010est.)
Source: 1. *CIA World Fact Book / Brazil 2. **http://www.taxrates.cc/html/argentina-tax-rates.html 3. Zinnov Research and Analysis
Campinas (Brazil)
Hi-tech companies can tap talent from the sizeable working population (country level) of whom nearly two-thirds are employed in the services sector
Mapped Domains IT Services
Product Development BPO Tech Support Total* Talent
Software Hardware Total
Total Talent Pool* (2010) 92400-97020
18600-19530
25100-26355
43700-45885
150800-158340
57500-60375 344400-361620
44%
27%
12%
17%
Sao Paulo Talent Pool Distribution (2010 est. )
IT Services
PD ( H & S)
BPO
Tech Support
Total Talent = 344400
– Talent Base:
– Sao Paulo / Campinas has the largest base of BPO talent that is growing at a fast pace
– Attrition: Sao Paulo has 10-15 % higher attrition when compared to country average
– People costs:
– The total annual cost per FTE for IT centers for Sao Paulo is USD 51,000 to 53,000 which is higher than for Curitiba in the range of 43,000 to 45,000
– Salary levels in Sao Paulo are on an average 10-15% higher than the rest of the country
– Business Opportunity
– A number of IT-BPO companies setting up centres in Campinas are looking to exploit opportunities in the large domestic market for IT services in Brazil
– Unlike IT Services, BPO & Tech Support domains that are clustered in Sao Paulo/Campinas, Product Development is predominant in Tier II and III cities
– Technical Support in Sao Paulo is mainly dominated by the MNCs
City Level Highlights
Talent Pool
Note: 1. Total talent refers to the average total value taken across the mapped domains 2. . Total Talent as in the entire city of Sao Paulo / Campinas,Makati City and Ortigas
Source: 1. www.campinas.sp.gov.br 2. KPMG Global Frontier Reports 3. Zinnov Research and Analysis, Primary Interviews
Campinas (Brazil)
The talent pool in Sao Paulo has a large concentration of BPO and IT services professionals due to the opportunity presented in the domestic market in addition to other geographies
The number of BPO and IT professionals in Sao Paulo has been rising steadily and is only expected to gain further momentum in the coming years
67,500 79,000 92,400 108,100
126,500 15,500
17,000 18,600
20,300
22,300
21,000 23,000
25,100 27,500
30,200 115,000
132,000
150,800
172,600
197,600
45,500
51,000
57,500
64,800
72,900
0
50,000
100,000
150,000
200,000
250,000
300,000
350,000
400,000
450,000
500,000
2008 2009 2010 2011 2012
IT Services Software Product Development Hardware Product Development BPO Services Tech Support Services
264500
302000
393300
449500
CAGR: 14.2 %
Note: Above numbers are determined by estimations and hence must be seen with a tolerance of -10% to +10%, Sao Paulo‘s population is close to 11 million Source: Zinnov knowledge base, Primary Interviews
344400
Talent Pool Campinas (Brazil)
Sao Paulo Talent Pool Distribution
Tale
nt
Po
ol
The following is a list of key companies mapped for the Campinas/Sao Paulo talent pool analysis
Innovation Centers
Support Centers
Major Companies
Note: Innovation and support centers include the functions mentioned in the initial overview
Source: Zinnov Research and Analysis, Company Websites
Campinas (Brazil)
Unisys Adobe
TCS Avaya
Softek Autodesk
Atos Origin
Lenovo Microsoft
Mahindra Satyam HP
IBM TCS
Accenture Gemalto
CPM Braxis Atento
Teleperformance Telefutura
Background and Business Description
Key Groups Talent Insights
Scale of Operations
Politec is Brazil’s largest privately owned IT services provider with 6,000 employees
– Establishment in Brazil
– Facilities in Brazil
– FTEs ramp-up (Brazil)
– CEO
– Partners
– 1970
– Bahia, Minas Gerais and Rio Grande do Sul, Belem,
Sao Paulo
– 6500
– Dalton Luz
– NA
– Support services offered: Business Process Services, HR, CRM, F&A, Training, Learning & Recruiting, Supply Chain Management, Support & Maintenance, Call Center
– Innovation Services offered: IT Services, Application Development, Application Management,
– Industry Focus: Banking, Finance, Communications
– Employees provide technical expertise and service excellence for customers around the world
– The company is certified by the highest IT standards such as CMMI level 5, MPSBr level A and ISO 9001, and has a strong delivery model and scale capacity.
– The company provides a broad range of applications and infrastructure services, and has operations in China, Japan, Europe, and the US
– Politec signed a memorandum of understanding to collaborate with Chinese vendor Neusoft, and is planning a stock market flotation in order to fund the expansion of its offshore business
Case Study Campinas (Brazil)
Support Services Innovation Services
Source: Zinnov Research and Analysis, Politec company website
Additional Information
The full report provides location and talent pool information
across the following other key cities in Latin America
Buenos Aires (Argentina)
Panama City (Panama)
Eldorado del sur (Brazil )
Santiago (Chile)
Bogota (Colombia )
Heredia (Costa Rica)
Zinnov’s Global Talent & Location product empowers HR and Engineering leaders with location and talent specific data to make strategic, operations and transformation decisions
1. Locations: 80+ Countries, 400
Cities
2. Talent: Installed (5 domains,
31 functions and 155 skills) & Fresh University talent
3. Cost : Across cities, domains,
functions and experience levels including productivity tax
4. Monitor: Pro actively monitor
key trends, risks and other parameters by city and country
5. Peer Group: Benchmarking
Information on over 7,000 companies
Through this tool, companies can access data across any combination of the above mentioned categories.
Global Talent & Location Product
Snapshot of Zinnov’s Talent & Location Product For more information, visit
http://zinnov.com/US/index.html
Full report on the Latin America Talent Hotspots can be accessed through the Zinnov Talent & Location Portal
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