An Overview of Latin American TalentMarch , 2011

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Objective

Scope

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 RisksHeredia, Costa Rica Panama City, Panama

Bogota, Colombia

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

Eldorado del sur, BrazilCampinas, Brazil Santiago, Chile Buenos Aires, Argentina

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

Support Center Support / Innovation Center

Agenda

Location Analysis

Buenos Aires (Argentina)

Panama City (Panama)

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 Sao Paulo (Brazil)

Eldorado Porto Alegra (Brazil)

Santiago (Chile)

Bogota (Colombia)

Heredia (Costa Rica)

Campinas (Brazil)

Overview

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

City StatisticsCity Population1 (2010 Census) Population Growth Rate1 City Area1 Official Language2 GDP (Campinas Metropolitan Area) 1,080,999 1.8% 795.6 KM2 Portuguese USD 42 Billion

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

Campinas (Brazil)

Qualitative Analysis

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 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

Business Landscape

Measuring Business Regulations4

Brazil is ranked 120th worldwide (2011 ranking) for ease of doing business at the country level (high rankingindicates 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 its 148 when it comes to paying taxes

Government Initiatives

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 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

Incentives

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

Campinas (Brazil)

Qualitative Analysis

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

Infrastructure

Connectivity

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 So Paulo, and can be reached by the highways2 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

English Proficiency

Geopolitical Environment

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

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)

Talent Pool

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 talentQuality 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 Getlio 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

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

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 ronmi co de Campina s 6

Key Highlights of Campinas

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

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

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

Campinas (Brazil)

Talent Pool

Hi-tech companies can tap talent from the sizeable working population (country level) of whom nearly two-thirds are employed in the services sectorFilter 1 Population above the legal age Filter 2 Employed Population in Organized Sector Filter 3 Sector analysis Labor force distribution1Service: 66%

203.4 million

149.9 million

103.6 million

Brazils Total Population

Legally Employable Population1

Working Population

Industry: 14%

Agriculture: 20%

DemographicsSao Paulo's population is growing at 1.8 percent More than 70 percent of Brazils total population is legally employable

Legal EnvironmentThe legally employable age in Brazil is 14 years Extensive social security and labor regulations govern employer/ employee relations

Resource DetailsUnemployment rate is around 9.3 percent1 Over 60 percent of the working population is employed in services industry1

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)

Talent Pool

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 geographiesIT Services 9240097020 Product Development Software 1860019530 Hardware 2510026355 Total 4370045885 BPO 150800158340 Tech Support 57500-60375 Total* Talent 344400-361620

Mapped Domains Total Talent Pool* (2010)

Sao Paulo Talent Pool Distribution (2010 est. ) Tech Support

City Level Highlights 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

17% 44% PD ( H & S)

BPO

12% 27%

IT ServicesTotal Talent = 344400

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)

Talent Pool

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 years500,000

Sao Paulo Talent Pool Distribution449500

450,000 CAGR: 14.2 % 344400 350,000 302000 300,000 264500 51,000 250,000 45,500 150,800 132,000 150,000 115,000 27,500 25,100 100,000 21,000 15,500 67,500 0 2008 IT Services 2009 Software Product Development 2010 Hardware Product Development 2011 BPO Services 2012 Tech Support Services 23,000 17,000 79,000 18,600 108,100 126,500 20,300 30,200 22,300 172,600 57,500 197,600

393300

400,000

72,900

64,800

Talent Pool

200,000

50,000

92,400

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

Campinas (Brazil)

Major Companies

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

Innovation Centers

Unisys TCS Softek Atos Origin

Adobe Avaya Autodesk

Support Centers

Lenovo Mahindra Satyam IBM Accenture CPM Braxis Teleperformance

Microsoft HP TCS Gemalto Atento Telefutura

Note: Innovation and support centers include the functions mentioned in the initial overview Source: Zinnov Research and Analysis, Company Websites

Campinas (Brazil)

Case Study

Politec is Brazils largest privately owned IT services provider with 6,000 employees

Background and Business Description

Scale of Operations

Establishment in Brazil Facilities in Brazil

1970 Bahia, Minas Gerais and Rio Grande do Sul, Belem, Sao Paulo

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

FTEs ramp-up (Brazil) CEO Partners

6500 Dalton Luz NA

Key Groups

Talent Insights

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

Support Services

Innovation Services

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.

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)

Full report on the Latin America Talent Hotspots can be accessed through the Zinnov Talent & Location Portal

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