< Previous10 MAY 2019 SITE SELECTIONCOSTA RICAINVESTMENT 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 8,000 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, “Th 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. Th 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?“Th 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. Th is is part of our social responsibility to our employees.”Th 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. “Th 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.” COSTA RICA INVESTMENT REPORT:ADVANCED MANUFACTURINGTo the StarsAd Astra Rocket Company’s innovations are important to transport on this planet too.12 MAY 2019 SITE SELECTION SITE SELECTION MAY 2019 13When 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.” 14 MAY 2019 SITE SELECTIONCOSTA RICAINVESTMENT REPORT:DIGITAL & SERVICESIn 2000, 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? Th at tally has ballooned to 157 companies, including a shared services center from Fortune 500 No. 1 Walmart. Moreover — befitting 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 offices from the likes of Bayer, PolyOne and Th ermoFisher Scientific.“Th e Costa Rican services sector continues the dynamism shown during 2018 as we enter 2019,” said CINDE Managing Director Jorge Sequeira said at an expansion announcement by Neustar in February. “During 2018, companies in the Costa Rican services sector generated more than 3.000 jobs.”According to data from CINDE and Costa Rica’s central bank, service exports from FTZs grew at an average rate of 16% every year from 2009 to 2015. Th e digital technologies labor force is growing at 6.8% annually. Th e number of IT graduates has grown at an annual rate of 5.6% and the number of engineering graduates has grown at an annual rate of 6%. Perhaps most impressively, Costa Rica graduates 74 engineers per 100,000 inhabitants, while India graduates 57 and the United States 55.Among recent projects:Digital technology company Akamai in March 2019 inaugurated a new facility on three floors at Roble Corporate Center that consolidates its various Costa Rican operations while also expanding its global services. Established in the country in 2012, Akamai expects to grow its 300-employee center by up to 30% by the end of 2019. “Costa Rica is well-known for its highly qualified 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 qualified opportunities to Costa Ricans.”Amazon now employs more than 6,000 in Costa Rica, including teleworking positions employing around 600 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, “Th 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 2014 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. Th roughout 2019, the company intends to hire more than 50 professionals in technical and leadership positions in engineering-related functions and activities.“Since 2011, we have operated an office in Costa Rica, and our experience has proven the market has a deep pool of strong, well-qualified 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. SITE SELECTION MAY 2019 15Th 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). Th 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 $21 million in 2019 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 130 countries. Th e expansion at the site in America Free Zone triples existing capacity. IBM first launched BPO operations in 2004. 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 24x7.”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 2009 with just over 100 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 1,000 employees and continue plans to grow.”Th 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?“Th 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 office usually sets an example because of our collaborations with other offices. It's clear that this is something that runs in our DNA.” — René Zuleta, General Manager, POSSIBLE Costa Rica16 MAY 2019 SITE SELECTIONand a highly capable team. We are very active in the job market through the diff erent channels like social media and job fairs while at the same time using referrals as a strong tool, given that our own employees are our best talent acquisition tool. We also work very closely with organizations like CINDE and university job fairs, and we are very open to taking in internships where we work with technical schools and universities bring in students and develop teams.”Roles range from call center professionals to technology and data analytics. And innovations from those teams often roll out well beyond the site and even the nation. “An example that we can share is that our center in Costa Rica has developed a Center of Excellence in Smart Automation,” Sibaja says.In Pursuit of the POSSIBLEPOSSIBLE is a digital agency that is part of WPP and Wunderman Group and works in creative, technology, strategy and data science to help clients strengthen and build trust in brands.René Zuleta, managing director for the company’s Costa Rica site, says, “Costa Rica was chosen primarily as a technology delivery nearshoring solution based on the high quality of the talent found here as well as our geographic location that makes it very easy to work with from a time zone perspective.”Th e site today has just over 100 full-time employees, “and on average we have 130 people working on projects when we include temporary employees such as freelancers or local partners that support us,” says Zuleta, who joined the company in 2008 when there were fewer than 25 people.As for skills and the country’s talent reputation, “POSSIBLE has a strong focus on culture and our people,” he says. “Almost all of our hires come from internal referrals. We also work closely with some of the top universities in Costa Rica to bring in top students for internships, keeping many of them once their internship is over. We also cultivate our relationships with some local partners, share good practices or collaborate however relevant in order to bring in highly talented people whenever needed.”What do he and his colleagues do for fun?“Our people participate on a lot of sports on their own or together,” he says. “For the past five years we’ve had people participating in a relay race that starts at midnight in San José and ends at Puntarenas” on the Central Pacific coast. “Besides that, we have people who swim, practice jiu jitsu, mountain bike, do trail running and do CrossFit. It’s a very active office.”Zuleta says the telecom, power and other infrastructure in the country “off ers everything we need at the moment.” In terms of cost of living, Costa Rica has become a slightly more expensive place to live and do business compared to some other LatAm countries, he says. “Our main competitors in this sense are Argentina and Brazil. However, Costa Rica continues to be very competitive due to our high-quality labor, well-educated people with an amazing attitude that makes us easy to work with, and a great cultural fit for the U.S. market.”Zuleta says the site “is well known within POSSIBLE as a standout technology hub. Th at’s our focus. Our creative, project management and UX capabilities are well known to focus on the technology services we provide. Finally, our office focus is to work as an excellence center specializing in certain platforms and technologies within the network.”Th at means collaboration across geographies, time zones and types of people. “Our office through our people is very well known for its attitude and collaborative spirit,” he says. “Our office usually sets an example because of our collaborations with other offices. It’s clear that this is something that runs in our DNA.” Source: World Economic Forum, Executive Opinion Survey. The Global Competitiveness Report 2018.Next >