< Previous108 MAY 2019 SI T E S E L E C T IO NWhen a company has a % share of a $ billion market, by any defi nition it’s a healthy chunk of change. To be precise: $ billion and change.Two years ago, that was Western Union’s share of the global remittances market, whereby individuals move money between countries and currencies. Latin American countries historically have been among the most active remittance recipients, which was part of the reason Western Union (WU) decided years ago to launch a Latin American Regional Operations Center (LAROC). e choice came down to two countries.“We almost chose Panama as the site for LAROC over Costa Rica,” said Dan Marostica, global head of Consumer Protection Compliance and the very fi rst LAROC site leader, as recounted in a December blog by Jacqueline Molnar, chief compliance offi cer/board chair, Western Union Foundation. But Costa Rican President Jose María Figueres signed a letter stating that any site Western Union established would be a free trade zone, thus making LAROC the fi rst service-free trade zone in Costa Rica. “In April , at a formal gathering of Western Union executives and Government offi cials at the Casa Presidencial, President Figueres announced that Western Union would establish an operating center in Costa Rica,” Molnar wrote.Today that center in San José has grown from employees to a Global Shared Services Center of Excellence, with , employees and plans to hire more. Overseeing the operation is Erick Van der Laat, vice president of accounting and controller, and Western Union’s regional director of operations for Latin America. He came to WU years ago after helping P&G expand in Costa Rica and then working in international corporate auditing for KPMG in South Florida.But like many who have spent time in Costa Rica, he wanted to come back. He’d married a Costa Rican, and they wanted to settle there. He joined WU at a time when the operation was transitioning from a -person contact COST A RICA INVESTMENT REPORT:CORPORATE SERVICESTHE MONEY Western Union knows the value of Costa Rican talent in adding value to global services. S I T E S E L E C T I O N MAY 2019 109center to a full-fledged 700-employee global services center.“When I joined, it was to bring accounting and finance functions to Costa Rica,” Van der Laat says, led by transaction settlement tasks from the United States. “At the same time, we had other organizations growing, such as credit and collections and compliance,” he says, as keeping the global money transfer business free of fraudsters and criminals was taking on increasing importance. A sister site sprang up in Lithuania, and the Costa Rica site quickly grew to employ 1,300. Some local leaders worried when the site then outsourced many of its call center jobs, bringing payroll back to around 800.But Van der Laat says counting jobs was an “incorrect” measure of success. A better metric, he says, was “the opportunity to bring in higher-responsibility, higher-level jobs to the center.” Before another two years had gone by, the site again had grown to 1,300 employees.Robotic Process Automation (RPA) Development Adds Value Without Subtracting JobsWhen the LAROC first opened, it was amid a services boom that also featured big investments from such companies as Intel and P&G, all drawn initially by Costa Rica’s cost-competitive labor force.“The arbitrage was huge. The savings were huge,” Van der Laat says. That advantage still exists, but to everyone’s benefit, Costa Rica today is beyond low-cost to deliver a boutique, productive and high-performance solution. For Western Union, around five years ago, that important value-add took the form of increased digital services that went beyond the company’s 500,000 retail agent locations globally.“We created a team in Costa Rica that would help us understand how to identify customer behaviors so we can strengthen the logic of our risk engine,” he says. “Many other things have happened. But that was one of the greatest evolution points of our history. We moved from back office to front-facing revenue generation. It was not the dollars we were saving, but the intelligence we were gaining.”Another turning point came three years ago, when WU started implementing lean practices, all focused on pleasing the customer at the same time as the team is learning from that customer. The center isn’t just delivering on its KPIs, but learning from customer behavior in order to innovate.“We can only make innovation occur with the most talented individuals, and the most engaged workforce,” says Van der Laat. “We invest in our talent, in having a safe and amiable environment.”The Costa Rican center is also developing RPA, but rather than inciting fear for employees’ jobs, “they are only helping us do more and greater things,” he says. “Now we have over 90 robots executing around 50 different processes for functions around the world, saving us around 17,000 hours of non-value-added tasks per month. It has not resulted in anyone being separated from their jobs, and we’ve seen an improvement of work-life balance for our employees.” It also increased retention, with attrition dropping from around 30% four years ago to around 13% today thanks to strategic automation and better onboarding practices for new employees, who often come to the company straight out of Costa Rica’s esteemed high schools. Connecting better with the new talent has also meant refreshing WU leaders’ ideas — something the collaborative business environment and open demeanor of Costa Rica only encourages.A new onboarding concept, created in Costa Rica with collaboration from Lithuania, has been shared with other locations in Mexico and Argentina, and has spawned engagement committees on topics ranging from organizing special events to, following Intel’s model nearby, which has also established a data science team — a perfect example of benefiting from Costa Rica’s strong knowledge services cluster. And it’s all happened at normal wage levels.The CINDE Job Fair over 14 years has brought together more than 100,000 people to match the country’s best companies with the best Costa Rican talent.Erick Van der Laat110 MAY 2019 SI T E S E L E C T IO N“The other thing I find interesting and beneficial is they can use the technology better than anyone else,” Van der Laat says of the young newcomers. “Sometimes, we just let them create.”Talent Comes From a Unique Education EcosystemCosta Ricans are know for their wit, creative and innovative drive, and WU has certainly leveraged this, gaining rewards for company and employees alike. This valuable skill in the knowledge economy being taken into account for their next expansion, as the company recently announced plans to strengthen LAROC by hiring for 200 more positions in 2019. Some of the hiring process was carried out during a Job Fair in February, organized by CINDE - The Costa Rican Investment Promotion Agency.“The diversity and richness of Costa Rican human talent have been a key element in the consolidation of the regional operations center of Western Union in Costa Rica, 20 years after its establishment,” said Roberto Golcher, regional manager of talent acquisition for WU’s Latin America division. “For Western Union, CINDE Job Fair is the platform that connects our collaborators and leaders with the greatest diversity of talent in Costa Rica.”Van der Laat reminds us where that talent comes from.“Something every single Costa Rican is very proud of is the fact that there is no army in the country,” he says, noting the precedent set by Costa Rican President José Figueres Ferrer in 1948 when he ceremonially broke a mallet to officially end the military and devote all those funds to education and health care instead. “With education, it’s not only free, but mandatory. Every single kid has the obligation to go to school. The strongest universities in Costa Rica are almost free … In Costa Rica a lot of people go to university. It’s very accessible and affordable.” And it often follows attendance at a technical high school with a focus on accounting, IT or customer service.The young Costa Rican, Van der Laat says, “is highly educated, and eager to grow and continually learn. It’s up to us to keep them motivated and challenged. The talent is different here. When I walk the floors here and in other locations when I travel, it’s a different dynamic. There is more cooperation, a greater desire to fix issues and discuss the relevant topics. That is not always happening every place.”Time to Be HumanNor is gender equality, which Van der Laat is proud to say is nearly achieved with a 50/50 split at LAROC, part of an awareness of women’s leadership potential that goes all the way to the top in Costa Rica.At LAROC, Van der Laat says he sees the last vestiges of the old “machoistic” society falling away, as he sees women routinely exceeding expectations, growing stronger and more assertive in their roles, and moving up the ladder without preference or favoritism. “By them sharing that on a daily basis, along with the other 80,000 people employed in the shared services business, I think this is how we are impacting society,” he says. “Because we will no longer accept the disparity as something that is okay. Instead we are raising our voices and demanding equality.”Van der Laat says the differences between Americans and Costa Ricans are striking.“For Costa Ricans it’s very important to know the people you are working with,” he says. “When you try to do a happy hour after work, it’s very forced in the U.S. — it’s almost like a meeting ... In Costa Rica, people want a relationship. Right off the bat, that creates a very different dynamic. You’re not working with a stranger.“It triggers a whole different culture,” he continues. “A former U.S. colleague saw me taking one-hour breaks for lunch and said, ‘Isn’t that wasted time?’ ‘No, it’s recharging,’ I said. I disconnect from my job. We can get beyond just talking about the weather, because I know what you like to do on the weekends, how your mom is doing, how the fishing was.“It’s a very different dynamic,” he says, “which I have not observed anywhere else in the world.” Western Union started operations in Costa Rica in 1998 with 35 employees, employs 1,385 employees today and aims to hire 200 more in 2019.112 MAY 2019 SI T E S E L E C T IO NCOST A RICA INVESTMENT REPORT:HIGH TECH & ELECTRONICSerardo Chaves Rodriguez is Costa Rica general manager for Qorvo (formerly Triquint), a U.S. semiconductor company that provides high-performance radio frequency solutions for advanced wireless devices, defense radar and communications.He says the company, which employs more than , worldwide, entered the Costa Rica market a decade ago as it took advantage of the rapidly growing smartphone market, and has grown dramatically since. In response to market demand, the company has tripled its manufacturing capacity in Costa Rica.Asked why the Costa Rica location makes sense not only for assembly, but for testing, he says, “ e know-how in the manufacturing and excellent execution over the years has made the company think of the Costa Rica operation as a logical place to invest and grow. is, added to the excellent business climate in Costa Rica, makes it a no-brainer decision.”Qorvo’s business mission is connecting the world. So how well does he think Costa Rica’s business ecosystem is connected to the world?“ is is one of the strengths of Costa Rica environment,” he says. “Supply chain connections, network infrastructure and telecom, logistics infrastructure, and a political environment that promotes the attraction and incentives for foreign investment, added to the strategic geographical position, make Costa Rica an ideal place for business development.Two-Way StreetJust as important are the ways the country’s people make connections, thanks to a globally respected education system, talent pipeline system and multilingual capabilities. Asked how Qorvo taps into and cultivates that talent, Chavez Rodriguez says human resources are one of the key points for Qorvo’s strategic growth.“Qorvo has found a breeding ground for innovation and new technology development,” he says. “We are committed to the knowledge, talent growth and development of our workers. Top talent is recognized with incentives, creating a culture of constant improvement and development. Qorvo provides scholarships to talented employees who want to develop careers in the core business. Additionally, English classes are provided for key employees who require English-speaking skills improvement. is is part of our social responsibility to our employees.” e company is rewarded in turn.“We are recognized for excellent execution and performance,” he says. “We compete head to head with larger Qorvo operations around the world. Qorvo Costa Rica has been leading Assembly and Test technologies in the company for many years. Now the market is evolving into new technologies.”Chavez Rodriguez considers the Costa Rican lifestyle highly evolved too. “I can highlight the excellent work/life balance that give the possibility for people to grow in the work environment without losing the possibility of sharing quality personal life time,” he says. “ e salary levels are good enough to allow personal growth projects outside the companies. In my case, I love to ride motorcycles, and I can ride across the country and enjoy this hobby without limits. Many other people I know have developed their own activities such as hiking, sports and many others, thanks to the free time provided by convenient work schedules. I love to travel with my family to know new places — all thanks to the possibilities I have found with this company.” COST A RICA INVESTMENT REPORT:ADVANCED MANUFACTURINGTo the StarsAd Astra Rocket Company’s innovations are important to transport on this planet too.114 MAY 2019 SI T E S E L E C T IO N S I T E S E L E C T I O N MAY 2019 115When Costa Rica President Carlos Alvarado Quesada was driven to inauguration ceremonies for him and his cabinet in May 2018, the vehicle delivering them to Democracy Square in downtown San José was Central America’s first hydrogen fuel cell electric urban bus, named Nyuti. The name means “star” in the language of the Chorotega people of northwestern Costa Rica, where the bus’s manufacturer Ad Astra Rocket Company (AARC) has an operation in Liberia, Guanacaste.Known for its national parks, cowboy heritage and dormant Miravalles Volcano, the region could soon be better known as a key player in the green and advanced manufacturing economies, thanks to Ad Astra.The bus was part of a hydrogen ecosystem demonstration partnership led by Ad Astra to validate and measure hydrogen as a carbon-free fuel, generated from renewable water and Costa Rica’s clean and abundant domestic electricity sources such as solar and wind.The public-private partnership with Costa Rica’s Development Bank System includes companies such as Air Liquide; vehicle specialist US Hybrid Corporation; global engine innovator Cummins Inc.; and Relaxury S.A., a subsidiary of Costa Rica’s Purdy Motor S.A, which operates the bus for the partnership.“Costa Rica has made excellent progress in de-carbonizing its electric grid, or about 30% of its energy needs,” said Franklin Chang Díaz, chairman and CEO of Ad Astra and a former astronaut, last May. “The other 70%, which lies primarily in the transportation sector, remains to be done, and hydrogen could help us bridge that gap and become the first country to achieve total independence from carbon-based fuels. The new government’s clean energy and de-carbonization commitment gives us hope that, through teamwork and focus on a common vision. we could achieve a national objective in a short time. This extraordinary achievement, obtained by a young team of Costa Rican engineers and technicians, demonstrates the great potential of our youth to lead in advanced technology projects of high social, economic and environmental impact.”Catalyst for TransitionsThe development of the hydrogen ecosystem, initiated by Ad Astra in 2011, has generated valuable new skills, technological “know-how” and operational expertise to the nation, making it an industry pioneer in renewable hydrogen as a transportation fuel.Ad Astra, a U.S. corporation with its HQ and main lab located in Webster, Texas, near NASA’s Johnson Space Center, is the developer of the VASIMR® (Variable Specific Impulse Magnetoplasm Rocket) engine, an advanced plasma space propulsion system aimed at the emerging in-space transportation market. Its only other R&D subsidiary is in Costa Rica, where the company employs 14 engineers, all from Costa Rica, and where the team generated its first plasma in 2006.AARC also owns and operates Ad Astra Energy and Environmental Services (AASEA), which in turn has an operation in Costa Rica under the same name that is working on developing the renewable energy infrastructure in Costa Rica and across Central America by offering wind power, energy storage and waste-to-energy solutions. It’s through AASEA’s lab and a partnership with EARTH University and Cummins that work also has progressed on a new type of portable electric generator based on an internal combustion engine fueled by a mixture of biogas and hydrogen.Asked how he would evaluate the workforce development and skills base in Costa Rica, Juan Del Valle, Ad Astra’s operations director in Costa Rica, notes that the country “already has a record of hosting advanced manufacturing facilities, particularly in the areas of medical devices, advanced electronics and a nascent aerospace cluster of tier-2 and tier-3 companies. The success of the country for attracting these investments is partly due to the availability of an educated, English-speaking workforce, and a good coordination [among] the government-backed investment agencies, the local universities and the manufacturing companies.“As our country transitions to a service- and knowledge-based economy,” he says, “advanced industries where high value-added products are created will be essential to our development.Blue Zone LeadershipHow does the company’s earthbound high-tech division fit in with the national decarbonization strategy? And how might this can lead to innovation, economic development and job creation in this arena?“For over nine years, Ad Astra’s Costa Rica facility has been developing clean energy technologies with the aim of replacing fossil fuels in key sectors of the economy, especially heavy-duty transportation and public transit,” Del Valle explains. “This effort pre-dates Costa Rica’s recent announcement of a National Decarbonization Strategy, a policy which we welcome and fully support.“The region of Guanacaste, where Ad Astra is located, already produces over 40% of Costa Rica’s clean electricity,” he explains, “and we believe it is on the road to become a regional hub for the development and commercialization of sustainable technologies. The province offers the infrastructure, transportation links and amenities required to host a diverse array of companies based on advanced technologies and manufacturing.” 116 MAY 2019 SI T E S E L E C T IO NCOST A RICA INVESTMENT REPORT:DIGITAL & SERVICESIn , Costa Rica counted three contact centers from Sykes, Amadeus and Equifax; and three shared services operations from P&G, L.L. Bean and Western Union.Today? at tally has ballooned to companies, including a shared services center from Fortune No. Walmart. Moreover — befi tting a land known for its ecological diversity — the roster also now includes one of the largest cybersecurity centers for IBM globally; engineering & design centers from Emerson and Intel; a digital tech center from Akamai; digital services centers from Accenture and Possible; and regional offi ces from the likes of Bayer, PolyOne and ermoFisher Scientifi c.“ e Costa Rican services sector continues the dynamism shown during as we enter ,” said CINDE Managing Director Jorge Sequeira said at an expansion announcement by Neustar in February. “During , companies in the Costa Rican services sector generated more than . jobs.”According to data from CINDE and Costa Rica’s central bank, service exports from FTZs grew at an average rate of % every year from to . e digital technologies labor force is growing at .% annually. e number of IT graduates has grown at an annual rate of .% and the number of engineering graduates has grown at an annual rate of %. Perhaps most impressively, Costa Rica graduates engineers per , inhabitants, while India graduates and the United States .Among recent projects:Digital technology company Akamai in March inaugurated a new facility on three fl oors at Roble Corporate Center that consolidates its various Costa Rican operations while also expanding its global services. Established in the country in , Akamai expects to grow its -employee center by up to % by the end of . “Costa Rica is well-known for its highly qualifi ed human talent,” said CINDE Chairman of the Board Eric Scharf. “Our commitment is to continue supporting companies like Akamai to continue growing in our country and to keep attracting other new enterprises that bring qualifi ed opportunities to Costa Ricans.”Amazon now employs more than , in Costa Rica, including teleworking positions employing around from remote locations around the country, providing services and support for Amazon Web Services (AWS) and for software development. According to the LinkedIn bio of Alejandro Filloy, general manager for Amazon’s Costa Rica subsidiary, “ e Costa Rica operations, which consistently attains top-tier rankings for performance within the Amazon ecosystem, has emerged as the country’s third-largest employer with substantial growth planned in the immediate future.” Amazon opened a software development center in Costa Rica in and serves several of its business units including AWS, Kindle, Amazon.com and Amazon Media Group.Neustar, Inc., a provider of real-time information services, has announced it will expand its business footprint and workforce in STEM-related computer and information services skills as it increases its employee base. roughout , the company intends to hire more than professionals in technical and leadership positions in engineering-related functions and activities.“Since , we have operated an offi ce in Costa Rica, and our experience has proven the market has a deep pool of strong, well-qualifi ed tech talent” said Neustar Senior Vice President of Engineering and Operations Peter Burke.INTO TECH? THEN CR IS FOR YOUMeteoric is the best word to describe the growth of Costa Rica’s services economy. S I T E S E L E C T I O N MAY 2019 117 e Accenture Excellence Center in Costa Rica is a part of the company’s Global Delivery Network, delivering strategy, digital, technology and operations services from a location in Heredia (near San Jose). is center serves as a hub for deployment of best-in-class practices to other locations globally. Its digital unit develops Augmented Reality and Virtual Reality solutions for clients in Europe and several other locations across the globe. IBM in February announced the company is investing $ million in to expand its Global Security Services Operations Center (SOC) in Costa Rica, from which security events are monitored for hundreds of clients in more than countries. e expansion at the site in America Free Zone triples existing capacity. IBM fi rst launched BPO operations in . Costa Rica is one of nine global SOCs IBM operates around the world, and the prime location for the Americas. “As the business grows, the Costa Rica SOC is expected to take several new workloads,” says IBM Costa Rica Communications & Corporate Relations Lead Johanna Fernández Borrero, “and considering the skills available and the already installed capacity, it was decided to expand operations in the country.”IBM continues to work with universities to cultivate further cybersecurity skills. Asked which other factors were important to the investment decision, she says, “On top of skills — which is the main factor in cybersecurity — political stability and cost eff ectiveness play a big part too. Of course the infrastructure is key in order to maintain a world class cybersecurity practice running and operating x.”Perspectives on Thriving In a Sweet SpotCompany leaders talked to us about how and why they’ve evolved in Costa Rica.“Experian Costa Rica started operating in Costa Rica in with just over employees,” says Adrian Sibaja, Experian’s director of service delivery for Costa Rica and Chile. “At that time the plans for growth were unclear. However, over time we were able to position ourselves as a strong performing organization to the point where today we are just over , employees and continue plans to grow.” e reasons for the site’s selection by the global consumer credit company? “Costa Rica was chosen as a site given the availability of highly educated talent, economic stability of the country, time zone friendliness and the obvious labor arbitrage,” Sibaja says.Business leaders have heard for years about Costa Rica’s outstanding education system, talent pipeline and multilingual capabilities. How does Experian cultivate that talent?“ ese characteristics of Costa Rica are absolutely a value-add to our operation,” Sibaja says. “Over time we have developed a talent acquisition process through the use of the multiple tools that we have Our o ce usually sets an example because of our collaborations with other o ces. It's clear that this is something that runs in our DNA.” — René Zuleta, General Manager, POSSIBLE Costa RicaNext >