OPPORTUNITIES IN THE LOCAL INDUSTRY

In terms of demand for IT services, the financial sector is one of the most dynamic sectors as a result of the Government’s mass bankization, allowing users to gain access to technology so they can manage their finances. This trend has created a lot of opportunities for the provision of back-office and call center services across the country.

Colombia has become a distribution hub for outsourcing services, IT and software services regionalwide, due to the availability of qualified human capital, its strategic and competitive geographic location with easy access to global markets, and its location in the middle of five time zones shared with important business centers.

The country’s Government is currently carrying out an ambitious plan for the development of road, port, railway and airport infrastructure in the country, which exceeds US $35.7 billion for the coming years. This requires support services in accounting, finance and logistics.

Through a sustained expansion of the health sector, and the population’s (47 million) increasing demand for services in patient monitoring (telemedicine) and information consolidation (data entry) areas.

The gas and oil sectors are increasingly demanding more services related to mobile telecommunications to control well and drilling, oil extraction, and transportation processes for their daily activities.

Colombia has experienced a tremendous growth in its energy generation, transportation and distribution companies, which are in a process of expansion in the region that generates growing demand for IT and BPO services.

SOFTWARE AND IT SERVICES

GROWTH, CONFIDENCE AND OPPORTUNITIES TO INVEST

Libertad y Orden

COLOMBIA, A COUNTRY WITH MULTIPLE AREAS OF DEVELOPMENT

Develops financial software for the banking industry. The biggest bet of Bogota is to offer software and IT services given the large numbers of banks that have concentrated in the country’s capital. Develops large-scale software projects due, in part, to Bogota’s abundant human capital, which are proficient in the most relevant corporate software platforms like SAP, ORACLE, Microsoft, IBM. (Invest in Bogota.)

Develops innovative solutions for the energy sector in parallel with the ICT cluster, the Medellinnovation district and Ruta N (Route N). The energy industry is the main regional bet for the software and IT services industry given the existing corporate network in the region.

Develops software and IT services for the agribusiness industry. It is the biggest regional bet given the cooperative efforts that cut across both industries.Develops Big Data, IT services and infrastructure, particularly in the logistics realm aimed at the port of Buenaventura which is Colombia’s main port connecting the country with more than 20 markets worldwide.Fosters partnerships with 11 research, development and innovation centers to shape new solutions in the sector. (Invest in Pacific.)

BOGOTA

MEDELLIN

CALI

Develops project management software for major infrastructure projects in Colombia located in this region such as the Ruta del Sol (Route of the Sun), rehabilitation of the Magdalena River and the railway corridor. Provides IT & software services for the logistics and transportation industry. It is the single biggest regional bet as the department of Atlantico sits on a privileged strategic location. This has enabled the construction of a servicing platform allowing access to more than 1.3 billion consumers worldwide. Using the expertise of 5,000 engineers in diverse areas, software in Java and Oracle can be developed to manage documents, design and create mobile applications, technical support and 3D content.

BARRANQUILLA

Develops software for the agribusiness industry. The region has the first center for computational analysis of biological information in Latin America that will help create agricultural information systems and biotechnical improvements.

COFFEE TRIANGLE

COLOMBIA, A MARKET IN CONSTANT DEVELOPMENT

IT MARKET IN COLOMBIA - 2013MARKET SHARE PER IT SERVICES % SALES

IT MARKET IN COLOMBIA - 2013MARKET SHARE PER TECHNOLOGY MARKET% SALESIn 2013, IT spending in Colombia added up to US 7,681

million, showing 13% growth in comparison with 2012.

During the last 10 years, the IT market has grown at a compound rate of 18%; software has grown 18.2% and IT services have grown 15.1%. IDC, 2014.

IT Services remain as the second technology market, keeping over 29% of market share. The main offered services are related with outsourcing and implementation & support. IDC, 2014.

ITO represents 30% of all outsourcing incomes (Including BPO and KPO) and the main offered SaaS and PaaS . IDC, 2014.

Colombia offers a wide range of sectors that demand a high number of outsourced services. Communications & Media is the industry with the highest demand within the IT market, followed by manufacturing industry, government and banking sector. IDC, 2014

Source IDC.

Source IDC.

HARDWARE

IT SERVICES

SOFTWARE

OUTSOURCING

DEPLOYMENT AND SUPPORT

INTEGRATION AND DEVELOPMENT

CONSULTING

EDUCATION AND ENTRETAINMENT

A GROWING MARKET WITH HIGH CAPACITY OF SKILLED LABOR

After Mexico, Colombia with 47.1 million inhabitants is the second largest spanish-speaking country in the world. It has multiple areas of development: nine metropolitan areas with population over 500,000 inhabitants. 2013.

Colombia is within the 30th largest economies and one of the largest within the Non - OECD economies.

The country has the second fastest growing laborforce in the region. IMD, 2014.

Each year more than 200.000 people graduate in tertiary education. Around 56% do so in undergraduate level and 22% in master studies and specializations. Ministry of National Education, 2013.

NUMBER OF GRADUATES IN ENGINEERING FIELDS 2012*

SYSTEMS ENGINEERING,TELECOMICATIONS AND

RELATED

139,423

14,423

5,851

2,011

ELECTRIC ENGINEERING AND RELATED

13.672

ELECTRONIC ENGINEERINGTELECOMMUNICATIONS AND

RELATED

57,283

Source: Ministry of Education, 2012.

Prime strategic location: Located in the heartland of the main commercial and financial centers in the hemisphere, it shares cultural affinity patterns, suitable to consolidate operations in the region.

Infrastructure capable of support world-class operations: 9 submarine cables, supplemented by an internal optical fiber ring that ensures the national connectivity, increasing Colombia´s competitiveness. MinTIC, (Ministry of Information and Communications Technologies), 2014 .

INFRASTRUCTURE AND PRIVILEGED LOCATION

TOTALGRADUATES2001 – 2012

* Taking into account technological, undergraduate and postgraduate programs

INNOVATION AND NEW MARKETS OPEN UP

ATTRACTIVE REGULATORY FRAMEWORK

TELECOMMUNICATIONS INFRASTRUCTURE SUBMARINE CABLES

Available tools to enable operations in areas such as services exports (PlanVallejo), intellectual property rights, Statutory Law of Habeas Data, ValueAdded Tax (“VAT”) exemption for services provided from Colombia, income tax exemption for software developed in the country, possibility of applying to the free trade zones regime, First Job Law, and opportunities to benefit from Telework.

There is a worldwide trend that seeks to develop new processes to enter emerging markets, where the idea is to locate innovation centers to suit the requirements of target markets. In line with this trend, the National Government encourages the establishment of innovation centers in the country.

Continuous strengthening of commercial relations between Colombia and the world, opening a window of opportunities for investment in all business outsourcing services.

THE GOVERNMENT’S COMMITMENT TO THE SECTOR

The Government is committed to support and provide aid through the Productive Transformation Program – PTP – a strategy that promotes the sector growth. During the last years, the program has created a favorable environment to consolidate a worldwide recognition for the sector. Program efforts develop throughout four main themes: Human Capital and Regulatory Framework, Consolidation, Promotion and Sector Innovation and Infrastructure and Sustainability.

Government plan aimed at generating economic growth based on the use and appropriation of ICT in Colombia and the development of a national digital ecosystem. The Presidency of the Republic and the MinTIC (Ministry of Information Technologies and Communications) lead the plan. In terms of connectivity, by 2014, 1,078 municipalities were online out of 1,100 in the country.

PAN-AM

SAC

CFX - 1

SAM - 1MAYA - 1

BARRANQUILLACARTAGENA

TOLÚ

MEDELLIN

BOGOTA

BUCARAMANGA

CALI

ARCOS

FUENTE: MINTIC, 2013.

PCCS

GLOBENET

AMX - 1

MAJOR FOREIGN COMPANIES WHICH HAVE CHOSENCOLOMBIA AS AN INVESTMENT DESTINATION

Peter Kroll, Senior Vice President, Capgemini, North Latin America.

“Colombia is a key country in our regional expansion strategy; it’s a country experiencing strong growth that has a very capable workforce and a very competitive cost structure. For that reason, we decided to open offices here.”

Indra, Spain: This consulting services and technological solutions company opened its second software laboratory in the country in Pereira in order to meet both domestic and international demands.

Synapsis, Chile: This company purchased the Colombian operations of Latin American broadband and IT services provider Diveo (investment: USD 35 million). After this, Synapsis was purchased by the Brazilian company TIVIT, in order to expand its presence in 7 Latin American countries.

Capgemini, France: This IT company opened a branch in Bogota to serve local and regional clients, establishing its regional headquarters in Colombia. (Jobs created: 400.)

Stefanini, Brazil: This Brazilian IT solutions firm purchased Colombian IT development company Informatica & Tecnologia, consolidating its presence in Latin America.

Globant, Argentina: This software, IT services, and maintenance outsourcing transnational corporation established a software development center in Bogota aimed at the international market.