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An Overview of Latin American Talent March , 2011

Scope

Objective

This report is intended to provide location and talent pool information across key cities in Latin America (highlighted in the map). More specifically, the report looks at following key dimensions for analysis Location insights

Business landscape Regulations Government Initiatives Incentives Infrastructure & Connectivity English Proficiency Geopolitical environment Quality of life, Cultural compatibility & Cost of living Risks

Talent ecosystem Overall talent pool availability (at a country level) Talent pool across specific domains including IT

Services, Product development (Hardware & Software), BPO and Tech support

Talent pool distribution by innovation and support activities

Panama City, Panama Heredia, Costa Rica

Santiago, Chile

Bogota, Colombia

Buenos Aires, Argentina

Campinas, Brazil

Eldorado del sur, Brazil

Support / Innovation Center

Support Center

PREVIEW REPORT The current document is a preview to the complete study and covers one city, Campinas

(Brazil) on the location and talent pool aspects

Agenda

Location Analysis

Buenos Aires (Argentina)

Panama City (Panama)

Campinas – Sao Paulo (Brazil)

Eldorado – Porto Alegra (Brazil)

Santiago (Chile)

Bogota (Colombia)

Heredia (Costa Rica)

PREVIEW REPORT The current document is a preview to

the complete study and covers one city, Campinas (Brazil) on the location and talent pool aspects

Campinas, the third largest city in the state of Sao Paulo in Brazil, is a major economic and commercial hub

City Overview

– Campinas is one of the major cities in the state of Sao Paulo and the 10th richest city in Brazil

– It represents 0.96 percent of all Brazilian GDP2

– The literacy rate of Campinas city is around 95.01 percent and Human Development Index is 0.852 which is considered quite high

– The city concentrates around one-third of industrial production of Sao Paulo state6

– Campinas' main economic activities are agriculture , auto, machinery, telecommunications, e-commerce and services4

– The prominent services sourced from Campinas include hosting, application support & development and customization4

– Portuguese is the official national language, and thus the primary language taught in schools. But English and Spanish are part of the official high school curriculum

– Campinas has a large number of educational institutes as well as technical schools. The University of Campinas (UniCamp) produces 1,935 graduate and post -graduate students every year and is also ranked as the institution producing the highest number of patents in Brazil5

– The region around Campinas is known as the Brazilian “Silicon Valley” due to the presence of a large number of research centers, universities (13), high tech industries and MNCs5

Campinas (Brazil) Overview

Source: Map – www.holidaycity.com/Brazil

1. Brazilian Institute of Geography and Statistics, 2. CIA – World Fact Book / Brazil, 3. Zinnov Research and Analysis 4. KPMG Global Frontier Report, 5. NaiGlobal, Global Market Report (Campinas), 2008 6. http://wn.com/campinas

City Statistics

City Population1 (2010 Census) 1,080,999

Population Growth Rate1 1.8%

City Area1 795.6 KM2

Official Language2 Portuguese

GDP (Campinas Metropolitan Area) USD 42 Billion

The city boasts of having a number of prominent high-tech MNCs such as IBM, Cisco etc., thanks to recent government initiatives to promote the outsourcing industry

Business Landscape

-

Incentives

Measuring Business Regulations4

Government Initiatives

• The region hosts more than 10,000 medium and large companies, many of which are among the 1,000 largest and best in Brazil1

• The Campinas Metropolitan Region is home to many national and international high-tech industries, including IBM, Motorola, Freescale, Lucent, Nortel, Compaq, Celestica, Samsung, Alcatel, Bosch, TI

• The largest companies have a global turnover of more than USD 80 billion, larger than many Latin American countries1

• Sao Paulo / Campinas offers local tax incentives for IT firms to set up offices . The following are some of the benefits offered:

• Reduction in social security contributions up to 50 percent1

• PIS/Cofins tax exemption for products purchased for export

• Reduction in tax rates on services to two percent3

• Reduction in amount of Annual Real Estate tax from 30 to 50 percent3

• Exemptions from fees and emoluments3

Qualitative Analysis

Note: Ease of Doing Business Ratings are done at country level

Source: 1. Wiki Encyclopedia / Campinas 2. ww.campinas.sp.gov.br 3. KPMG Global Frontier Reports 4. Ease of Doing Business – World Bank 5. Zinnov Research and Analysis

• Brazil is ranked 120th worldwide (2011 ranking) for ease of doing business at the country level (high ranking indicates the regulatory environment is more conducive to starting and operation of a local firm)

• In terms of starting a business, its world wide rank is 125 while it’s 148 when it comes to paying taxes

• Campinas boasts the largest number of high-tech business incubators and industrial parks (a total of eight)

• The Secretariat of International Cooperation (SMCI) was created with main goals as the following:

• Attraction and facilitation for the arrival of new investments to the city

• Expansion of activities of companies that are already established in the city

• Perpetuation of the relations between the city, its international community and partners

Campinas (Brazil)

Infrastructure

Geopolitical Environment

Connectivity

English Proficiency

These MNCs were attracted by the excellent infrastructure support from the city and availability of English speaking talent pool

• English language skills are limited but education in English is being encouraged3

• The official language is Portuguese, though Spanish and French are also commonly spoken languages2

• English is often studied in schools and increasingly in private courses. It has replaced French as the principal second language among educated people1

• Campinas is a major transportation and telecommunications hub for the State of Sao Paulo, as it is located on the major highways that connect the capital to the Northwest and Northern parts of the State

• Campinas has 1 five-star hotel and several other four-star hotels in the city, with a total of about 3,900 rooms3

• A scientific and technological park has been planned in Campinas, and is intended to be a hub for R&D activities and also offer incubation facilities for technology companies4

• The violence and crime rates are particularly high in the Campinas City including robbery ,kidnapping and cargo theft. In 2006 the Campinas government partnered with Bosch and put in a security system with around 270 CCTVs to keep the crime rate under check3

• The state of Sao Paulo witnessed criminal attacks against the police and some civilians in May 2006,which led to several casualties3

Qualitative Analysis

•The highway road system in Sao Paulo is one of the best in Latin American cities with a length of around 34,650 km

•More than 90 percent of population dwells within 5km of a paved road •Traffic congestion is common during peak hours in some parts of the city3 •Viracopos International Airport is located 14 kilometers (8.7 mi) from downtown Campinas and

99 kilometers (62 mi) from the city of São Paulo, and can be reached by the highways2

Source: 1. Wiki Encyclopedia / Campinas 2. www.campinas.sp.gov.br 3. KPMG Global Frontier Reports 4. University of Campinas, website 5. Zinnov Research and Analysis

Campinas (Brazil)

In addition, low cost of living & a truly cosmopolitan culture has helped attract professionals from other locations turning the region into a breeding ground for quality talent

Key Highlights of Campinas

Quality of Life •Sao Paulo has a quality of life ranking as

119th 1, 11th in Latin America according to the Quality of Living survey by Mercer •According to a study from Getúlio Vargas

Foundation, this is the best city to work in the country 3

Catastrophic Risks

• Some parts of the city are prone to floods, especially in summer 5

• On February 17th 2003, a storm caused by a cold front impacted a large area of Southeastern Brazil and in Campinas this event was the second severest in 120 years according to the Ins-t i tuto Ag ronômi co de Campina s 6

Talent Pool

Note: Cost of living index provided is relative to New Yorl City (NYC), which means that for New York City, each index is 100(%)

Source: 1. Mercer Quality of Living Survey 2. Numbeo Database for Cost of living worldwide 3. www.campinas.sp.gov.br 4. Zinnov Research and Analysis 5. KPMG Global Frontier Reports, 6. http://www.ige.unicamp.br

Cost of Living Index2

• The cost of living in Sao Paulo is one of the lowest among global cities. It ranks 161 (of the 241 cities) according to the Cost of Living Survey by Mercer.

• Consumer Price Index (Exc. Rent): 92.35 • Rent Index: 33.80 • Groceries Index: 53.93 • Restaurants Index: 64.03 • Local Purchasing Power: 56.38

Cultural Compatibility

• Sao Paulo is home to the largest Asian population in Brazil, as well to the largest Japanese community outside of Japan itself

• 0.9 % of population in Campinas is Asians 3. 75 percent of the population comprises of whites 3

• Languages used in Campinas are Portuguese, English and Spanish

• The city does not have many places for tourist attraction unlike other Latin American cities 3

Campinas (Brazil)

Filter 1 Population above the

legal age

Filter 2 Employed Population in

Organized Sector

Legally Employable Population1

Working Population

Brazil’s Total

Population

Labor force distribution1

Filter 3 Sector

analysis

203.4 million 149.9 million 103.6 million

Industry: 14%

Service: 66%

Agriculture: 20%

Sao Paulo's population is growing at 1.8 percent

More than 70 percent of Brazil’s total population is legally employable

Demographics

The legally employable age in Brazil is 14 years

Extensive social security and labor regulations govern employer/ employee relations

Legal Environment

Unemployment rate is around 9.3 percent1

Over 60 percent of the working population is employed in services industry1

Resource Details

Talent Pool

Note: The above data is country specific. City specific research is in progress, 1. Legally employable population constitutes of the total population >14 yrs of age 2. Working population constitutes of the total labor force in urban areas of Brazil (2010est.)

Source: 1. *CIA World Fact Book / Brazil 2. **http://www.taxrates.cc/html/argentina-tax-rates.html 3. Zinnov Research and Analysis

Campinas (Brazil)

Hi-tech companies can tap talent from the sizeable working population (country level) of whom nearly two-thirds are employed in the services sector

Mapped Domains IT Services

Product Development BPO Tech Support Total* Talent

Software Hardware Total

Total Talent Pool* (2010) 92400-97020

18600-19530

25100-26355

43700-45885

150800-158340

57500-60375 344400-361620

44%

27%

12%

17%

Sao Paulo Talent Pool Distribution (2010 est. )

IT Services

PD ( H & S)

BPO

Tech Support

Total Talent = 344400

– Talent Base:

– Sao Paulo / Campinas has the largest base of BPO talent that is growing at a fast pace

– Attrition: Sao Paulo has 10-15 % higher attrition when compared to country average

– People costs:

– The total annual cost per FTE for IT centers for Sao Paulo is USD 51,000 to 53,000 which is higher than for Curitiba in the range of 43,000 to 45,000

– Salary levels in Sao Paulo are on an average 10-15% higher than the rest of the country

– Business Opportunity

– A number of IT-BPO companies setting up centres in Campinas are looking to exploit opportunities in the large domestic market for IT services in Brazil

– Unlike IT Services, BPO & Tech Support domains that are clustered in Sao Paulo/Campinas, Product Development is predominant in Tier II and III cities

– Technical Support in Sao Paulo is mainly dominated by the MNCs

City Level Highlights

Talent Pool

Note: 1. Total talent refers to the average total value taken across the mapped domains 2. . Total Talent as in the entire city of Sao Paulo / Campinas,Makati City and Ortigas

Source: 1. www.campinas.sp.gov.br 2. KPMG Global Frontier Reports 3. Zinnov Research and Analysis, Primary Interviews

Campinas (Brazil)

The talent pool in Sao Paulo has a large concentration of BPO and IT services professionals due to the opportunity presented in the domestic market in addition to other geographies

The number of BPO and IT professionals in Sao Paulo has been rising steadily and is only expected to gain further momentum in the coming years

67,500 79,000 92,400 108,100

126,500 15,500

17,000 18,600

20,300

22,300

21,000 23,000

25,100 27,500

30,200 115,000

132,000

150,800

172,600

197,600

45,500

51,000

57,500

64,800

72,900

0

50,000

100,000

150,000

200,000

250,000

300,000

350,000

400,000

450,000

500,000

2008 2009 2010 2011 2012

IT Services Software Product Development Hardware Product Development BPO Services Tech Support Services

264500

302000

393300

449500

CAGR: 14.2 %

Note: Above numbers are determined by estimations and hence must be seen with a tolerance of -10% to +10%, Sao Paulo‘s population is close to 11 million Source: Zinnov knowledge base, Primary Interviews

344400

Talent Pool Campinas (Brazil)

Sao Paulo Talent Pool Distribution

Tale

nt

Po

ol

The following is a list of key companies mapped for the Campinas/Sao Paulo talent pool analysis

Innovation Centers

Support Centers

Major Companies

Note: Innovation and support centers include the functions mentioned in the initial overview

Source: Zinnov Research and Analysis, Company Websites

Campinas (Brazil)

Unisys Adobe

TCS Avaya

Softek Autodesk

Atos Origin

Lenovo Microsoft

Mahindra Satyam HP

IBM TCS

Accenture Gemalto

CPM Braxis Atento

Teleperformance Telefutura

Background and Business Description

Key Groups Talent Insights

Scale of Operations

Politec is Brazil’s largest privately owned IT services provider with 6,000 employees

– Establishment in Brazil

– Facilities in Brazil

– FTEs ramp-up (Brazil)

– CEO

– Partners

– 1970

– Bahia, Minas Gerais and Rio Grande do Sul, Belem,

Sao Paulo

– 6500

– Dalton Luz

– NA

– Support services offered: Business Process Services, HR, CRM, F&A, Training, Learning & Recruiting, Supply Chain Management, Support & Maintenance, Call Center

– Innovation Services offered: IT Services, Application Development, Application Management,

– Industry Focus: Banking, Finance, Communications

– Employees provide technical expertise and service excellence for customers around the world

– The company is certified by the highest IT standards such as CMMI level 5, MPSBr level A and ISO 9001, and has a strong delivery model and scale capacity.

– The company provides a broad range of applications and infrastructure services, and has operations in China, Japan, Europe, and the US

– Politec signed a memorandum of understanding to collaborate with Chinese vendor Neusoft, and is planning a stock market flotation in order to fund the expansion of its offshore business

Case Study Campinas (Brazil)

Support Services Innovation Services

Source: Zinnov Research and Analysis, Politec company website

Additional Information

The full report provides location and talent pool information

across the following other key cities in Latin America

Buenos Aires (Argentina)

Panama City (Panama)

Eldorado del sur (Brazil )

Santiago (Chile)

Bogota (Colombia )

Heredia (Costa Rica)

Zinnov’s Global Talent & Location product empowers HR and Engineering leaders with location and talent specific data to make strategic, operations and transformation decisions

1. Locations: 80+ Countries, 400

Cities

2. Talent: Installed (5 domains,

31 functions and 155 skills) & Fresh University talent

3. Cost : Across cities, domains,

functions and experience levels including productivity tax

4. Monitor: Pro actively monitor

key trends, risks and other parameters by city and country

5. Peer Group: Benchmarking

Information on over 7,000 companies

Through this tool, companies can access data across any combination of the above mentioned categories.

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