Focus: Shared servicing

All Part of the Service

Apr. 28, 2019

Costa Rica has the right mix of staff and infrastructure demanded by a thriving business support industry.

With its skilled workforce on the ground ready to go, Costa Rica has established a reputation as a regional Business Process Outsourcing (BPO) and service sector hub. The list of household names establishing themselves in the country is a testament of this and the stability and encouraging outlook for the local economy

A Regional Force

The general prognosis seems good; the World Bank (WB) puts 2018 GDP growth at 3.7%, fueled by a robust export sector, as well as tourism. The latest WB LPI Index of competitiveness ranks Costa Rica 73 overall with a score of 2.49 for infrastructure. The country is recognized as having a relatively high rate of technological adoption and business sophistication and the all-important educated, increasingly multilingual workforce. Minister of Foreign Trade, Dyalá Jiménez has noted that the local services sector, “has become a leader in the region and (the) third largest Latin American exporter of high-value added services." This is all borne out in the firm development of the near-shore services and BPO industry based on interest from notable international firms ranging from Western Union to Procter&Gamble.

A Centered Service

In fact, Costa Rica continues to appeal as a service center address, with over 120 international companies present today across the sector spectrum. By 2015, the export of computer services, management, and related commercial functions had comprised just shy of 6% of GDP. Over the previous decade and a half, exports of value-added services had soared from 12.1% of total exports to 47.5%, according to data of the Costa Rican Coalition for Development Initiatives (CINDE).

Delivering Returns

In 2014, Citi Financial Group launched its shared service center in Costa Rica, catering to global operations with the launch of its "Campus Citi" located in Ribera de Belén, Heredia. That data center became home to Citi Shared Services, creating 500 jobs in the process. 2018 has been a notable year for the local business processing sector. January kicked off with international medical equipment company, Smith & Nephew, opening its GBS (center of global services) to provide specialized shared services globally. The services center handles HR, regulatory compliance, payroll, financial, and technological services for the

US and Latin America

February's notable story was the creation of 350 jobs by Amazon at its new support center; an investment of USD10 million catering to Latin American businesses selling on its digital marketplace. Amazon's local presence dates back to 2009 when it set off with a seller support staff of 30. Today, the number at San José facility is 900, and Amazon is the country's fifth-largest private sector employer. The e-commerce behemoth also operates several call centers and business support hubs in Lagunilla (Ultrapark LAG), San Francisco de Heredia (American Free Zone), and Calle Blancos (Zona Franca del Este). Overall, Amazon employs more than 6,500 people in Costa Rica and reportedly aimed to add 1,500 to that number by end-2018. It seems that a full half of all products sold on Amazon worldwide were by SMEs marketing themselves on Amazon Marketplace, a vehicle for growth of this universally vital economic component. In November, Stryker, a leading global medical technology firm, announced plans to open an office in the San Antonio Business Park in Heredia, to build a hub for its finance-related activities and services. The ball gets rolling with the employment of close to 100 staff supporting accounting, accounts receivable, and accounts payable activities. CINDE describes the interest of such firms in Costa Rica's commercial offering as a vote of confidence in the country's proven track record, and a healthy contributor to the services sector that today employs over 61,000 citizens.
The household name firms set up in Costa Rica confirm its attractiveness as an address for BPO services. And with economic growth currently spurred by investment in infrastructure, the proposition can only grow in appeal over the years to come.