THE “IT” INDUSTRY

Costa Rica 2018 | TELECOMS & IT | FOCUS: FOURTH INDUSTRIAL REVOLUTION

IT is fundamentally altering other industries, and automation is changing employment patterns—making Costa Rican IT the industry to be in.

In the current iteration of industrial revolutions, new technologies and fast exchange of information have transformed industries, from manufacturing to banking, and modified the way businesses and institutions conduct their operations. The Internet of Things, big data, automation, artificial intelligence, and cyber security impact all industries. Just as in previous industrial revolutions, those who do not adapt will quickly get left behind.

Costa Rica, as a high-tech service exporter, recognizes the imperative need to adapt to modern digital processes and supply the right manpower to complement new machine power. This fourth industrial revolution, also known as Industry 4.0, combines physical reality and the cyberspace of information. Just as in previous industrial revolutions, some jobs will disappear. But new jobs to most efficiently integrate new technologies and analyze the exponentially exploding amounts of data offer new openings, especially in Costa Rica.
The country has become the back-office of the world, just as China was once called the factory of the world. This is because large companies like Roche, Wal-Mart and Pfizer have established in the country shared-services operations that are exported to markets in North America, Asia, and Europe. According to the Costa Rican Investment Promotion Agency (CINDE), IT service exports represent 6.2% of GDP.
The arrival of Intel, Hewlett Packard, and IBM has placed Costa Rica's software sector amongst the most dynamic industries in Latin America. The Inter-American Development Bank expects that San José will be in the five most important poles in Latin America for the development of the ICT and software industries by 2025—along with Buenos Aires and Córdoba, Argentina; Montevideo, Uruguay; and Santiago, Chile.
Multinational technology company IBM established its operations in Costa Rica in 2004. Today, the company exports services like finance and accounting, supply chain management, cyber security, and business management operations. IBM Country Manager Alberto Mainieri told TBY, “In terms of providing services, the country is well equipped and has the capability to develop the right technical skills and professionals to succeed in this era.” He remarked that private and public sectors must work together with the education sector to develop programs and support schools, technical high schools, and universities.
The country manager of Accenture, an international business management consultancy, concurred, noting that the government is putting efforts into policies that foster creativity and encourage students and universities to specialize in strategic fields such as big data, cloud computing, and analytics.
Enrique Egloff, President of the Costa Rican Chamber of Industries mentioned to TBY, “The speed of technology is going to take us through innovation and new economic activities.” He added that higher added value is extremely important, as well as competitiveness, productivity, and the capacity of human resources and a strong educational system. For this reason, private companies and business chambers have urged universities to promote IT, engineering, and mathematics studies. The Ministry of Education has recently launched dual education programs, in which students are trained in technical schools and the field. Also, the government raised the budget by 6.9% for research and development in 2017.
Though, filling ICT positions will require further investment in R&D to develop the knowledge-based economy and adapt to the latest industrial revolution, according to OECD's Science, Technology, and Innovation Outlook 2016. Local companies indicate low levels of productivity in proportion to the rising flow of FDI. For this reason, the government has focused on further investing in education and creating programs to develop R&D capabilities to better integrate the private sector, IT, and education. Many industry leaders come to the same conclusion: financial capital and technology need to be combined with the right human capital for optimal outcomes.
With all the focus from the private sector, government institutions, educators, and foreign investors, IT is Industry 4.0's “it” industry. And Costa Rica is a hot spot for the building of this new economic pillar.