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Economic Impact Magellan
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Measuring the Economic Measuring the Economic
Impact of MagellanImpact of Magellan
Intel International eLearning Summit
Porto, Portugal
11 November 2009
Vital Wave Consulting
Field Teams
Latin AmericaArgentina
Brazil
Chile
Costa Rica
Dominican Republic
Mexico
Peru
AsiaIndia
China
Cambodia
Eastern EuropeEstonia
Uzbekistan
Ukraine
AfricaEgypt
South Africa
Nigeria
Kenya
Middle EastUnited Arab Emirates
United StatesCalifornia (Headquarters)
2009 Vital Wave ConsultingTMProprietary and Confidential: Do not copy or distribute.
Portugal Education & Economic Ecosystem Before Magellan
1
2009 Vital Wave ConsultingTMProprietary and Confidential: Do not copy or distribute.
Portugal Education & Economic Ecosystem After Magellan
2
The Magellan Impact on Portugal Over 1,500 jobs created, 30,000 teachers trained, 2.3 billion in economic activity, 4 million computers exported and a computer for every primary school child
2009 Vital Wave ConsultingTMProprietary and Confidential: Do not copy or distribute.
ICT Investment and Economic Growth Relationship to GDP and Productivity Growth
As nations develop their knowledge economies to attract higher paying jobs and improve standards of living, research is showing that investment in ICT is critical to improving economic prospects.
As nations develop their knowledge economies to attract higher paying jobs and improve standards of living, research is showing that investment in ICT is critical to improving economic prospects.
3
A 2006 OECD study revealed a positive correlation between high levels of investment in ICT and higher economic and productivity growth, with high investment countries like the US, Sweden and Finland showing higher rates of both than nations such as Portugal, Germany and France.
A 2006 OECD study revealed a positive correlation between high levels of investment in ICT and higher economic and productivity growth, with high investment countries like the US, Sweden and Finland showing higher rates of both than nations such as Portugal, Germany and France.
%
o
f
G
D
P
2009 Vital Wave ConsultingTMProprietary and Confidential: Do not copy or distribute.
IT education investments are reflected in international competitiveness rankings, such as the World Knowledge Competitiveness Index, which both reflect and influence global executive opinions
IT education investments are reflected in international competitiveness rankings, such as the World Knowledge Competitiveness Index, which both reflect and influence global executive opinions
Global firms increasingly consider a tech-literate workforce essential when deciding on foreign investments, evidenced by Intels review of Vietnams tech curriculum during its factory investment process
Global firms increasingly consider a tech-literate workforce essential when deciding on foreign investments, evidenced by Intels review of Vietnams tech curriculum during its factory investment process
Technology education is key to developing homegrown, world-class IT companies, such as India has done with Wipro and China has done with Huawei
Technology education is key to developing homegrown, world-class IT companies, such as India has done with Wipro and China has done with Huawei
Economic Benefits to Technology in Education Technology Education Improves Competitiveness
4
India
China
Vietnam
Germany 41.5 41.8 23 42.8 21 44.1
Hong Kong 110.1 111.1 14 113.7 13 166.6
Hungary 31.0 31.2 26 32.0 24 27.7
Iceland 366.0 369.2 1
India 0.1 0.1 33 0.1 29
Ireland 27.9 28.2 27 28.9 25 31.6
Israel 78.9 79.6 18 81.5 17 35.6
Italy 94.1 95.0 17 97.3 16 63.2
Japan 101.6 102.5 15 104.9 14 84.8
Korea 5.3 5.3 32 5.5 28 10.8
1
2
3
2009 Vital Wave ConsultingTMProprietary and Confidential: Do not copy or distribute.
Project Magellan 500,000 Locally-made Netbooks for Portuguese Students
This new collaboration with Intel underscores Portugal's commitment to advance quickly toward a knowledge-based economy. By
equipping our schools with state-of-the-art computing technology and Internet
connectivity, we hope to hasten the transition to economic models that benefit our citizens."
Prime Minister Jos Socrates
5
In July 2008, Portuguese Prime Minister Jose Socrates unveiled the Magellan PC and announced a deal with Intel to purchase and deploy 500,000 of the locally-built, lightweight netbooks to Portuguese primary school students
In July 2008, Portuguese Prime Minister Jose Socrates unveiled the Magellan PC and announced a deal with Intel to purchase and deploy 500,000 of the locally-built, lightweight netbooks to Portuguese primary school students
Source: The Inquirer
Portugal Prime Minister Jos Socrates and Intel Chairman Craig Barrett at the launch of the Magellan initiative
2009 Vital Wave ConsultingTMProprietary and Confidential: Do not copy or distribute.
Moving the Needle to 1:1 e-Learning Accelerating Portugals Move up the Rankings
Magellan is part of a broader initiative, Plano Tecnologico, by the government of Portugal to catch up to and surpass its fellow EU members in technology and Internet readiness and ultimately reach the goal of a computer for every child
Magellan is part of a broader initiative, Plano Tecnologico, by the government of Portugal to catch up to and surpass its fellow EU members in technology and Internet readiness and ultimately reach the goal of a computer for every child
6
Student-to-Computer Ratio
Post-secondary e-school initiative
Post-Magellan
2009 Vital Wave ConsultingTMProprietary and Confidential: Do not copy or distribute.
Portugal Education Ecosystem Education Impact vs. Economic Impact
Software/Content
Providers
OS Providers
Content Providers
Application Developers
Beneficiaries/
Thought Leaders
Students
Parents
Teachers
Education Orgs
Thought Leaders
Hardware Producers
Hardware Design
Local OEM/ODM
Distributor
Factory/Parts Suppliers
Governments
National Gov/MoE
Ministry of Telecommunications
Local School Systems
Service Providers
Training Organizations
Design Centers
Education Program Design
Education Impact Economic Impact
7
Telecommunications
Providers
Telecom Companies
Infrastructure Equipment Manufacturers
2009 Vital Wave ConsultingTMProprietary and Confidential: Do not copy or distribute.
Project Magellan Direct and Indirect Economic Benefits
Direct BenefitsCreation of local jobs associated with hardware and software production and support servicesIncreased revenues and salaries associated with job creationImprovements in physical and Internet infrastructureExport increase/improvement in balance of trade
Indirect BenefitsIndirect economic activity (e.g., spinoff jobs) produced by creation of new production and service jobsEnhanced ability to attract foreign investment (e.g., JP S Couto) due to stronger workforce skillsImprovement in international competitivenessBuild up of local IT capabilities and ecosystemIncreased tax revenues
8
Project Magellan
Portugal
2009 Vital Wave ConsultingTMProprietary and Confidential: Do not copy or distribute.
Creating the Portuguese Silicon Valley Magellan Gives Boost to Technology Cluster and Jobs
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Porto
Maia
Matasinhos
Braga
Chip Manufacturer
770 jobs
OEM/ODM
200% increase in jobs
Research University
Quantum Chip Lab
GPS Device Manufacturer38 jobs
Mobile Device Software
50 jobsDesign/Innovation Center
10% increase in jobs
IT Integrator/Distributor
Increase in jobs
Entities directly benefiting from Magellan
Hundreds of jobs added to improve Portugals 9.1% unemployment rate
Northern
Portugal
Content Provider
TBD jobs
Linux OS Software
25% increase in jobs
2009 Vital Wave ConsultingTMProprietary and Confidential: Do not copy or distribute.
Exporting Magellan to the WorldPortugal as High Value Added Technology Solutions Exporter
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Exporting the Magellan model of locally-produced hardware and software to countries around the world
Global SalesProject DesignSolutions Implementation
Exporting the Magellan model of locally-produced hardware and software to countries around the world
Global SalesProject DesignSolutions Implementation
The Portuguese Magellan initiative was the model for the May 2009 announcement by the prime minister of Spain for a one-to-one program for primary students that will also involve job creation for the Spanish education eco-system as part of an economic stimulus package
The Portuguese Magellan initiative was the model for the May 2009 announcement by the prime minister of Spain for a one-to-one program for primary students that will also involve job creation for the Spanish education eco-system as part of an economic stimulus package
Hardware Expertise
IT Solutions Expertise
Sugar
Scratch
Global Partners
2009 Vital Wave ConsultingTMProprietary and Confidential: Do not copy or distribute.
Moving up the Economic Value Chain Magellan Transforms JP S Couto into Europes only ODM
Magellans manufacturing will be done by Portugal hardware company JP S Couto, transforming the company from a networking and original equipment manufacturer
into Europes only original design manufacturer, leveraging CEIIA design ideas
Magellans manufacturing will be done by Portugal hardware company JP S Couto, transforming the company from a networking and original equipment manufacturer
into Europes only original design manufacturer, leveraging CEIIA design ideas
11
2009OEM
2010ODM
In PortugalHard drive assemblyFinal assembly
AbroadProcessor manufactureHardware designComponent designMotherboard manufactureConfiguration
In PortugalHardware designMotherboard manufactureConfigurationHard drive assemblyFinal assembly
AbroadProcessor manufacture
Increased
Value AddedManufacturing JobsDesign JobsIntellectual Capital
2009 Vital Wave ConsultingTMProprietary and Confidential: Do not copy or distribute.
Jobs +300% +11% +25%
Revenues +200% TBD +25%
Wages/Salaries +>200% TBD +20%
12
Local OEM/ODMJP S Couto
Local OEM/ODMJP S Couto
Software Provider
Caixa Magica
Software Provider
Caixa Magica
Design CenterCEIIA
Design CenterCEIIA
Direct Economic ImpactDirect Impact Concentrated among Certain Ecosystem Players
2009 Vital Wave ConsultingTMProprietary and Confidential: Do not copy or distribute.
Indirect Economic BenefitsManufacturing Expansion Leads to Spinoff Jobs and Activity
Recent studies indicate that each new manufacturing job may lead to the creation of 3.2 indirect or spinoff jobs, while other analyses show that the each dollar of manufacturing economic activity produces another $1.26 of intermediate economic output, meaning Magellans total economic impact will be hundreds of millions of euros
Recent studies indicate that each new manufacturing job may lead to the creation of 3.2 indirect or spinoff jobs, while other analyses show that the each dollar of manufacturing economic activity produces another $1.26 of intermediate economic output, meaning Magellans total economic impact will be hundreds of millions of euros
13
Direct
Impact*
Indirect
ImpactTotal
Jobs 350 1,120 1,470
Total Economic Activity (based on sales of 5 million units)
1 billion 1.26 billion 2.26 billion
*Result of manufacturing expansion
2009 Vital Wave ConsultingTMProprietary and Confidential: Do not copy or distribute.
Magellan by the NumbersImpacting Jobs, Skills, and IT Readiness in Portugal
14
~350~350
Direct Jobs Created
850850
Master Teachers Trained
1 billion1 billion
Direct Economic Activity*
5 million5 million
Units Manufactured*
2.3 billion2.3 billion
Total Economic Activity*
4 million4 million
Units Exported*
~1500~1500
Total Jobs Created
30,00030,000
All Teachers Trained
*Total through 2010
Interview NotesInterview Notes
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