Chilean ICT Sector

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• Chilean ICT Sector
• Chilean Association of Information Technology
  Companies

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Contents

• ACTI A.G.
• IT in Chile
• Chilean Performance in Rankings
• Chilean Digital Agenda
• ACTI Proposals and Conclusions

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ACTI A.G.
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ACTI, the entrepreneurial community in action
Chilean Association of Information Technology
Companies (ACTI AG)

• Founded in 1984
• Successive mergers
• ACTI includes all IT companies hardware,
  software, e-learning, systems integration,
  Internet services.
• 130 members.
• Sales MM 1,342.
• Employment
• IT commerce 11,684
• IT services 24,912

Source Economy Ministry of Chile and National
Statistics Institute.
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ACTIs Mission

• Help international and local development of IT
  companies.
• Increase the productivity and competitiveness of
  all companies operating in Chile, through the use
  of IT
• Accelerate the countrys growth.
• Offer opinion and collaboration to the
  community central and local governments, trade
  associations, universities, media, etc.
• Promote Social Responsibility.

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ACTI Today

• New role approved by the general assembly
• Provide orientation to the industry
• New projects to generate capabilities for
  orientation
• Technology Transfer Center
• Strategic planning process with international
  consultant
• SOFOFA activities
• ALETI
• Etc.

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IT in Chile
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History

• Decades with
• No restrictions to technology imports
• Low rates going lower
• unilaterally
• FTAs
• Open Capital Markets
• Macroeconomic and political stability
• Decades without
• Special incentives to innovation
• Incentives to technology investments

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Summary of the Chilean Market

• 1st Fact Chile stands out in the Region. It is
  an interesting platform for business and has
  received important long term investors
  (Telecommunications, Sanitary services,
  Infrastructure, Transportation, Ports, Energy,
  Mining, Finances and Services).
• 2nd Fact There are good infrastructure and IT
  capabilities.
• Chile has a privileged IT position among Latin
  American countries, far from its followers.
• Due to its economic and institutional
  characteristics, Chile has been chosen by some
  companies as platform for certain remote
  operations.
• 3rd Fact Companies in Chile invest in
  technology, on average, a third of what their
  competitors and peers in the world do. This
  situation is repeated in all Latin America.
• In the Unites States the investment in IT
  represents 5.25 of its GDP 3.50 in Europe and
  2.40 in Asia. In Latin America it represents
  only 1.38 of the regional GDP().

()Source Net Impact, 2005
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Summary of the Chilean Market

• 4th Fact Chile spends approx. 0.7 of the Gross
  Domestic Product (GDP) in RD. This represents
  25 of the percentage spent by the nations with
  which Chile is competing in global rankings.
• 5th Fact Most leaders in the private sector have
  not been active in promoting innovation in their
  businesses.
• 6th Fact A growing number of government leaders
  have been promoting innovation using technology,
  and have been implementing landmark projects with
  significant social impact.
• 7th Fact The set of government incentives to
  innovation are only based on funds available to
  specific projects presented by businesses, but
  they are not tailored to IT innovation, and the
  resources are limited (but growing, because of
  special mining tax). Special tax treatments for
  RD, which are used by most countries, are non
  existent in Chile.

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The IT Industry in Chile
Chile has almost 500 IT companies. IT companies
by size (number of employees)
Medium and Large
Micro
Small
micro lt 10 10ltsmall lt49 medium and large gt50
Source ACTI, IDC and Economy Ministry of Chile
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Industry Annual Sales in million US dollars
1,3 GDP
Source ACTI AG, August 2005
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Composition of IT Sales
Outsourcing and services 50 approximately
Source IDC, Economy Ministry of Chile and ACTI
AG. 2005. .
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Sales by Industry and Customer
1.2
Source ENTI 2004
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The Top 5 Chilean Clusters

• Chile is leader in different product sectors as
  copper, fruit, fish, wine and chemicals, where it
  has an important worldwide position.
• Copper is the main chilean export product its
  sales reached MMUS 17,400 in 2005, representing
  35 of the worldwide production and 7.5 of the
  Chilean GDP.
• In comparison, IT purchases of copper companies
  represent only 0.7 of of the total IT sales.
• This situation is repeated in the other
  important Chilean sectors.

We can tailor our abilities to grow with the top
international chilean exporting industries, that
currently represent only 10 of our sales.
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Broadband connections
Source Broadband Chile Report 2002-2010,
IDC. () Leased lines, ADSL, WILL and modem
cable.
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Technology Usage in SMEs
Source Economy Ministry of Chile and IDC
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Comparison between Chile ICT Added Value and
OECD countries
Source Economy Ministry of Chile, 2006
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Chile Performance in Rankings
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Global Information Technology Report Ranking,
2005-2006
Chile 29th
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Offshoring Ranking
Source A.T. Kearney, 2005
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Competitiveness Ranking 2006 Institute for
Management Development (IMD)
Chile lost five places (2005 - 2006)
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Ranking of the best places to do business in
Latin America

• Chile was in the first place for two years
  (2004- -2005).
• This loss is related with our new business
  capability, entrepreneurship and innovation.

Source AméricaEconomía, 2006
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Telecom Competitiveness in Latin America
Source Pyramid Research, 2003.
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Information Society Index
Optimum 9,5
Sub optimuml 6,77
Source DMR Consulting.
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Digital Agenda

• A Public-Private Agreement that provides a
  Framework to Answer the Chilean Challenges.

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Chilean Digital Agenda
6 Areas

• On line Government
• E-Learning
• IT Industry take-off
• Digital Development for companies
• Universal Access
• Legal Framework
• Health

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ACTI Proposals and Conclusions
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Strategic Focus and ACTI Proposal
We are worried about the countrys
productivity Our clients have to commit with
innovation
ICT Infraestructure
1.

• Large Companies Small and Medium Enterprises
  (SMEs) chain
• State leverage projects, own leadership

Leaders role in enterprises and government.
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Conclusions

• We are half way to the optimal level that our
  countries can aspire
• Chile accomplishes the intermediate level that
  industrialized countries with small per capita
  income have.
• 2006 is the year for the Private Sector
• ICT in the new government

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Thank you
Visit us at http//www.acti.cl