Chile

1
Chile Country Overview IT Profile

• MIS 680 International Issues in Information
  Systems
• Professor Licker 11-10-03
• Cliff Bliss
• Alex Nielsen
• Ron Papa

2
Agenda

• Country Overview
• Brief History
• Geography
• Infrastructure
• Economy
• Government/Politics
• Culture
• Information Technology Landscape
• Telecommunications/Infrastructure
• eCommerce
• Hardware Software
• Analysis
• Overall Recommendations

3
Chile Brief History

• Chile is located along South Americas west
  coast. Chile is bordered by the Andes on the
  east and the Pacific Ocean on the west.
• Chile has a pervasive European heritage.
  Although most people from Chile have a Spanish
  ancestry many European groups are influential.
  These groups include, Irish, English, German,
  Italian, Croatian, French and Middle Eastern.
  Chiles Native Americans are also a very
  influential group.
• A three-year-old Marxist government was
  overthrown in 1973 by a dictatorial military
  regime led by Augusto PINOCHET, who ruled until a
  freely elected president was installed in 1990.
  Sound economic policies, first implemented by the
  PINOCHET dictatorship, led to unprecedented
  growth in 1991-97 and have helped secure the
  country's commitment to democratic and
  representative government.

• http//www.cia.gov/cia/publications/factbook/print
  /ci.html

4
Chile Geography

• Climate temperate desert in north
  Mediterranean in central region cool and damp in
  south
• Terrain low coastal mountains fertile central
  valley rugged Andes in east
• Geography strategic location relative to sea
  lanes between Atlantic and Pacific Oceans (Strait
  of Magellan, Beagle Channel, Drake Passage)
• Area - comparative slightly smaller than twice
  the size of Montana
• Language Spanish
• Population Growth 1.05

• http//www.cia.gov/cia/publications/factbook/print
  /ci.html

5
Chile Geography
6
Chile Infrastructure

• Ports and harbors AntofagastaAricaChanaralCoqu
  imboIquiquePuerto MonttPunta ArenasSan
  AntonioSan VicenteTalcahuanoValparaiso

• http//www.cia.gov/cia/publications/factbook/print
  /ci.html

7
Chile Infrastructure
Chile MontanaDoubled UnitedStates
Paved Highways 11,012 km 225,806 km 5,733,028 km
Airports w/ paved runways 71 234 5,131
Railways 6,585 km 194,731 km

• http//www.cia.gov/cia/publications/factbook/print
  /ci.html

• http//www.mdt.state.mt.us/map/fastfact.htm

8
Chile Infrastructure

• Electricity - production 41.66 billion kWh
  (2001)
• Electricity - production by source fossil
  fuel 47 hydro 51.5 other 1.5 (2001)
  nuclear 0
• Electricity - consumption 40.13 billion
  kWh (2001)
• Electricity - imports 1.386 billion kWh
  (2001

• http//www.cia.gov/cia/publications/factbook/print
  /ci.html

9
Chile Economy

• Market-oriented economy
• Stock Market
• Signed free trade agreement with the US on 11
  December 2002
• High level of foreign trade
• Export 17.8 billion
• Import 15.6 billion
• Debt 40.4 billion (2002)
• Strongest sovereign bond rating in South America
• Fifteen year growth (1998 is the only exception)
• Budget revenues 17 billion expenditures
  17 billion

• http//www.cia.gov/cia/publications/factbook/print
  /ci.html

10
Chile Economy

• Distribution of family income - Gini index
  Chile 56.7 (1998)U.S. 40.7 (1997)
• Inflation rate (consumer prices) Chile
  4.5 (2002 est.)U.S. 1.6 (2002)
• Labor force 5.9 million (2000 est.)
• Labor force - by occupation agriculture
  14industry 27services 59 (1997 est.)
• Annual growth 3.5

• http//www.cia.gov/cia/publications/factbook/print
  /ci.html

• http//www.lonelyplanet.com/destinations/south_ame
  rica/chile_and_easter_island/

11
Chile Economy
Chile Montana
Unemployment 9.2 4.6
Poverty 21 13.7
Per Capita Income 10,000 24,044
Chile MontanaDoubled
Gross Product 184 Billion 45.2 Billion
Population 15,665,216 1,818,906

• http//www.cia.gov/cia/publications/factbook/print
  /ci.html

• http//www.mdt.state.mt.us/map/fastfact.htm

12
Chile Government/Politics

• Legal system
• Currently based on Spanish law
• US-style adversarial system is being gradually
  implemented throughout the country
• Executive Branch
• Popular vote
• Six Year Term
• Senator for Life
• Legislative Branch
• Senate
• Chamber of Deputies
• Supreme Court
• Several Political Parties

• http//www.cia.gov/cia/publications/factbook/print
  /ci.html

13
Chile Culture

• Literacy total population 96.2
• Thirty One Universities
• Education 12 Years Compulsory, 13 million in
  Attendance
• Health Childbirth rate 2.4 children, Infant
  mortality rate 8.9/1,000. Life expectancy 79 yrs
• Chile's European heritage is pervasive
• Nobel Prize-winning poets Gabriela Mistral and
  Pablo Neruda
• Until the military coup of 1973, its cinema was
  among the most experimental in Latin America
• National Parks
• Major industries Copper, fishmeal, wineMajor
  trading partners USA, Japan, Germany, UK

• http//www.lonelyplanet.com/destinations/south_ame
  rica/chile_and_easter_island/index.htm
• http//www.state.gov/r/pa/ei/bgn/1981pf.htmpeople

14
Chile Culture

• PEOPLE - About 85 of population lives in urban
  centers, concentrated in the southern and
  central regions with 40 living in greater
  Santiago.
• - Nearly half the population is under 25 years of
  age
• - 72 is under 40
• - Most have Spanish ancestry
• - Small, yet influential number of Irish and
  English immigrants
• - German immigration to the southern provinces of
  Valdivia, Llanquihue, and Osorno
• - Other significant groups Italian, Croatian,
  French, and Middle Eastern
• - About 800,000 Native Americans, mostly of the
  Mapuche tribe, reside in the south-central
  area.

• http//www.state.gov/r/pa/ei/bgn/1981pf.htmpeople

15
Chile Culture

• PEOPLE - Culture is a mix of Spanish and
  indigenous groups native to the region
• - The common religion is Roman Catholic
• - Although society is not riddled by ethnic,
  religious or regional conflicts, certain class
  barriers and distinctions still exist
• - Modernization has improved the quality of life,
  yet great disparities in income are still
  apparent
• - The present challenge is to overcome the
  growing gap between those with easiest access
  to a modern Chile, and those left behind.

• http//www.chiptravel.cl/

16
Chile Culture

• Huasos
• Like the Argentinian Gauchos, east of the Andes,
  the Chilean huasos are skilled horsemen, honing
  their skills daily. Over the years, the huaso has
  come to signify much of the Chilean folkloric
  culture, and he is a vital part of parades,
  fiestas, and holidays.

• http//gosouthamerica.about.com/library/weekly/aa0
  51302b.htm

17
Chile Telecommunications/Infrastructure

• Telephone system
• General assessment
• Modern system based on extensive microwave radio
  relay facilities
• Domestic
• Extensive microwave radio relay links domestic
  satellite system with 3 earth stations. Mobile
  telephone service has been a key driver of growth
  in the telecommunications sector. Between 1999
  and 2001, mobile subscribership in Chile soared
  from 2 to 5 million. Mobile use in 2001 surpassed
  fixed-line use with a density exceeding 34 mobile
  phone lines per 100 inhabitants. Chilean
  officials predict that by 2010, 60 percent of the
  population will have mobile phones.
• International
• Satellite earth stations - 2 Intelsat (Atlantic
  Ocean)

• http//www.cia.gov/cia/publications/factbook/print
  /ci.html
• http//www.osec.doc.gov/latinamericatrademission/t
  elecom20pc.htm

18
Chile Telecommunications/Infrastructure
Chile
Telephones 2.603 million (1998)
Cell phones 5 million (2001)
ISP 7 (2000)
ISP 11 (2003)

• http//www.cia.gov/cia/publications/factbook/print
  /ci.html
• http//www.osec.doc.gov/latinamericatrademission/t
  elecom20pc.htm

19
Chile Telecommunications/Infrastructure

• July 2001 Data
• AMPATH (AmericasPATH project)
• Connect Research and Education networks
• North America
• Central America
• South America
• Caribbean
• Chile was the first participant
• Optical Fiber Network
• Chile has a small, but very active scientific
  community that has placed a priority on
  integrating into the worldwide scientific
  community by electronic means.
• Florencio Utreras Director RENUNA

• http//www.lanic.utexas.edu/la/chile/

20
Chile Telecommunications/Infrastructure
2003 Data Estimated Internet Users
4,000,000 Projected Users by end of 2004
4,500,000

• http//www.lanic.utexas.edu/la/chile/
• http//www.buyusa.gov/chile/en/page85.html5

21
Chile eCommerce

• Estimated that 25 of Chileans will buy over the
  Internet this year and total sales via the
  Internet will reach 6 billion annually in Chile
  by 2004.
• Amarillas.com
• American and European Business Portal
• Mercantil.com
• Latin American Business Portal
• Chilnet.cl
• Chileans Business Portal

• http//www.amarillas.com

22
Chile Hardware Software

• Technology Initiatives and Regulations
• Government sponsored Enlaces program which
  funds and supplies computer equipment and
  internet access for its state-funded schools.
• Signed the Joint Statement on Electronic
  Commerce with the U.S. (2000).
• Partnership with the U.S. - Inter American
  E-Business Fellowship Program.
• Chiles government has set as a goal that, by
  2005, the Internet should be just as
  accessible in Chile as it is in the developed
  world.

http//www.mac.doc.gov/ebusinessfellowship/
23
Chile Analysis

• - Positive Economic Growth- Stable Political
  System- Free Market System- High Unemployment-
  High Gini Index (Digital Divide)

Level of Economic Growth
Key MISManagement Issues
ITStrategy
Political System
Culture
Palvia, Palvia Whitworth 1996
24
Chile Analysis
Industrial Policy
IT Diffusion
Environmental Factors
Economic Payoff
Industry Structure
Dedrick Kraemer 1998

• Politically stable for 13 years
• Economic growth for 15 years
• European influenced Society
• Sound Education System
• Corporations (ATT) are investing in
  Infrastructure
• Economy is growing

25
Chile Analysis

• Hofstede
• Power-Distance - High
• Uncertainty Avoidance - High
• Individualism - Low
• Masculinity - High
• Shores Model
• Risk vs. Power Distance - Pyramid

26
Chile Analysis

• GLITS Model

Rank Variable Chile
1 Customers Access to South American Market Strong Benefit
2 Time Zones 2 hours ahead of eastern time Minimal Benefit
3 Products Services Educated workforce, High Unemployment Benefit
4 Economies of Scope Ports for Product Transportation Benefit
5 Integration Fiber Optic Access from U.S. Benefit
27
Chile Analysis

• Supply Chain Management
• Porters 5 Competitive Forces

New Entrants
Traditional RivalryAmong Firms
Suppliers
Buyers
Substitutes
28
Chile Analysis

• Trans Border Data Flow
• Technology
• - Fiber Optic connection to North America,
  Central America and Europe complete.
• Cultural
• - Protectionism ???
• Laws
• Several govt initiatives include a draft law on
  the use of electronic signatures written to
  international standards, and regulation of
  certification services. Other legislative
  projects refer to cyber-squatting, electronic
  contracts, consumer rights, and online privacy. A
  law before the Chilean Congress will also update
  the legislation on intellectual property rights,
  bringing them into line with
  international standards.

29
Chile Overall Recommendations

• If there is a current or future market in South
  America, Invest in Chile!
• Considerations
• - Type of Corporation ( multinational vs. global
  etc..)
• - Corporate Culture vs. Chilean Culture (Coopers
  Model)
• Reasons
• Localized Service in a Developing Market-
  Corporations are Making Investments in
  Infrastructure- Stable Political System-
  Fiscally Stable- Educated Workforce- Pleasant
  Place to Visit- Gateway to South America