Miguel Pérez, Ph.D. Chairman Chamber of Chilean IT Companies. Asociación Chilena de Empresas de Tecnologías de Información A.G.
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1 Overview of the Chilean IT Industry Miguel Pérez, Ph.D. Chairman Chamber of Chilean IT Companies
2 Index Introduction The Chilean Business Environment Country Competitive Assessment The IT Industry Summary
3 Introduction
4 Founded in 1984 (25 years) Chilean Association of Information Technology Companies (ACTI) 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
5 Chile at a Glance Population: GDP: 16.3 M USD M GDP per capita: Annual inflation: 4.5% USD (USD PPP) Time zone alignment Unemployment: 9.5% Adult literacy rate: 96% Corporate tax: 17% Remitted Profits Tax: 35% (corp tax is credited to this tax) Overnight flights to the U.S. Sources: Treasure Ministry, INE, EIU, IMF
6 The Chilean Business Environment
7 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 2.3% of the annual budget in Technology (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.
8 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.
9 Country Competitive Assessment
10 Benchmarking Chile Country Competitiveness Denmark United States Singapore Taiwan United Kingdom Spain Chile China Thailand India Costa Rica Brazil Mexico Argentina Global Competitiveness Index , WEF: Ranks 28 among 125 countries IT Readiness 67 Country United States Switzerland Denmark Sweden Singapore Rank Country Chile Spain Panama Mexico Brazil Rank The Networked Readiness Index (NRI) 2008, WEF: Ranks 39 among 134 countries
11 Benchmarking Chile Offshoring attractiveness Global Services Location Index A.T. Kearney: Ranks among the 10 most attractive countries for offshoring services.
12 Business attractiveness Doing Business The World Bank Group: Rank 40 among 181 countries. Singapore Benchmarking Chile United States 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
13 The IT Industry
14 Chile IT Investments (USD M) USD M , ,740 9,5% 7,0% , Services IT Software Hardware (Forecast) Source: IDC, Sponsored by ACTI
15 Hardware Market, 2009 (*) USD M ,752 6,6% 1,867 Other Networking Storage Servers 800 Printers 600 PCs Source: IDC, (*)Forecast
16 Chile, Personal Computer Unit Market, , , , , , , ,520 3,510 2,910 Desktop Notebook Others Source: IDC, 2009.
17 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
18 Software Market, 2009 (*) ,6% 271 Applications 250 MUSD Application D&D System Infrastructure Software 0 Source: IDC, (*)Forecast
19 Services Market, 2009 (*) ,8% 793 Operations Management 600 Support Services MUSD Implementation Planning Training and Education 0 Source: IDC, (*)Forecast
20 Market by verticals, 2008 (USD M) $736 Source: IDC, 2009
21 Growth of IT Industry Chile v/s Latam (%) 18% 16% 14% 12% 10% 8% 6% 4% 2% 0% 9,5% Chile 7% 16% LatAm * (Feb) 4% USD 2,740 USD M 60,334 Source: IDC, Sponsored by ACTI
22 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.
23 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
24 Thank You!
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