Economic Impact Magellan

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

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Portugal Education & Economic Ecosystem After Magellan

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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


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


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

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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


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

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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


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

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Student-to-Computer Ratio

Post-secondary e-school initiative

Post-Magellan


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

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Telecommunications

Providers

Telecom Companies

Infrastructure Equipment Manufacturers


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


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


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



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


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

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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


Jobs +300% +11% +25%

Revenues +200% TBD +25%

Wages/Salaries +>200% TBD +20%

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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


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

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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


Magellan by the NumbersImpacting Jobs, Skills, and IT Readiness in Portugal

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~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

Documents

Economic Impact Magellan