Promoting Silicon Valleys in Latin America : Lessons From Costa Rica

The spectacular economic performance of China, East Asia and India during the last ten years has ignited some profound changes in the world economy. The share of global demand, investments, trade and production of the traditional industrialized powers, the US, Europe and Japan, has gradually yet continuously declined. This rise of China also has implications for Latin America. On the one hand, booming Chinese demand for raw materials and food has sustained the economic performance of Latin America during the last decade. On the other hand, the competitiveness of China and as a hub for advanced manufacturing is threatening Latin America’s attempt to diversify its economy from its dependence on the export of natural resource-based goods. Most Latin American countries are not however waiting passively for their economies to become ever more reliant on high prices for food, minerals and oil. Leveraging the economic and political stability that they achieved during the last decades, many countries in the region, such as Brazil, Chile, Colombia, Costa Rica and Uruguay, are attempting to capture the growing market for knowledge intensive products and services by breeding their own Silicon Valleys. This book discusses the promotion of ICT clusters in Latin America by analyzing the development of the Costa Rican cluster in particular, an often celebrated case of successful policy in the region. Costa Rica, a small country traditionally known for its coffee and wildlife, managed to build an information technology cluster within ten years, becoming the leading producer of ICT per capita in Latin America. Studying the Costa Rican case provides a solid starting point for understanding the challenges of building ICT clusters in Latin America. Cover 1 Promoting Silicon Valleys in Latin America 8 Copyright 9 Contents 12 List of figures and tables 13 List of abbreviations 14 Acknowledgements 15 1. Introduction: searching for sustainable development models in Latin America 18 2. Theoretical background 38 3. Building ICT clusters in Latin America: the Costa Rican experience 47 4. From foreign direct investment to multinational corporations’ networks with local firms 61 5. Financing networks: investors networks in the Costa Rican cluster 79 6. Networks of Costa Rican ICT producers: local rivalries in a small market 97 7. Innovation networks: linking academia and the private sector 113 8. Local companies’ networks with firms located abroad: building transnational social ties 130 9. Conclusion 145 Notes 155 Bibliography 160 Index 172 Lessons from Costa Rica