Costa Rica Call Center Blog

• Half of the growth on employment at the Costa Rican Free Trade Zones comes from the Service Sector
• Service companies employ 21,700 jobs
• The companies do software, payroll, financial analysis and technical support, among others
• Sector sales grew 56% in 2008, while goods dropped

Every day, 21,700 workers of such companies solve technical problems, make online advertising and software, analyze finances and do payrolls to their own parent company or for large corporations worldwide.

They represent 41% of the 52,700 jobs under the Free Trade Zone.

In addition to services in the Free Trade Zones host a wide variety of manufacturing ranging from microprocessors, medical devices, and agro-chemicals and pharmaceuticals.

Between 2004 and 2008 the number of jobs in services increased from 6,985 to 21,700 (211% more), according to the report “Balance of Free Trade Zones for Costa Rica”, released yesterday by Procomer.

Last year alone service companies created 5,000 new jobs.

The boom in employment in the sector is explained by many multinationals which got started in the late 90’s when Sykes, Western Union, Procter & Gamble set up operations and has been growing faster.

In the year 2,000 there were 5 companies providing services from the country, today are 112 (including 28 managers of parks).

The companies within the Free Trade Zones alone, exported $917 million in 2008, $330 million (56%) increase over the 2007.

In contrast sales of goods from manufacturing companies fell by $84 million (2%) over the $ 5.067 million generated in 2007.

“The country is very attractive for companies to reduce costs efficiently without lowering quality and efficiency and in some cases, increase their productivity,” said Gabriela Llobet, director Cinde.

Llobet added that being very competitive in a period of economic uncertainty is critical because it attracts more companies to come here or expand their businesses.

“From now until the end of the year, we will see greater investment from companies that already operate in the country, moving operations here from other countries looking for more productivity,” said Llobet.

The service companies in the country provide outsourcing services to other companies or support their own corporation (captive operations).

Advantages to the country. Within the Free Trade Zone, service workers are paid an average monthly salary of $ 1,125.

This salary is the highest within the system compared to the salaries paid by manufacturing firms ($830), medical ($704), the agro-industry ($566) and textiles ($434).

“This is a worker who speaks English and has a university degree or higher technical skills,” said Llobet.

These service multinationals also provide the highest valued added to the local economy.

In 2008 the contribution was $696 million in wages, social taxes, local purchases of goods and services and the Procomer tax (the figure includes the remaining $34 million for tax exemptions received by companies).

The accumulated investment services companies is $814 million between 2004 and 2008, surpassed only by the companies of machinery and electrical equipment ($829 million).

Source: La Nacion

By Simon Briscoe in London
Published: July 4 2009 05:04 | Last updated: July 4 2009 05:04

Costa Rica, the country of fewer than 5m people sandwiched between Panama and Nicaragua, tops a new global ranking for combining a happy and long life with limited environmental degradation.

The country blends beautiful countryside, a great diversity of species and has long since got rid of its army. The merger of its energy and environment ministries has reversed deforestation and helped it produce 99 per cent of its energy from renewable sources. It has also scored highly, relative to other developing countries, in surveys of poverty, press freedom and democracy.

The Happy Planet Index, “Why good lives don’t have to cost the earth”, published on Saturday by the UK-based new economics foundation, combines measures of life expectancy, happiness and ecological footprint to assess the sustainability of growth in 143 countries.

That the top 10 in the list of “greenest and happiest” nations is dominated by Latin America might raise a few eyebrows, as the region is better known in the western imagination for its slums, inequality and coups. Zimbabwe languishes at the bottom along with a dozen other south, east and central African countries.

But the Latin Americans score highly, the report suggests, due to non-material aspirations and strong social capital among friends and relatives. The grim performance of the developed world might also prompt some westerners to cast doubt over the value of the report. Among the rich nations, the highest placed country is the Netherlands – but it manages only 43rd.

The UK languishes midway down the table – 74th, behind Germany, Italy and France but ahead of Japan and Ireland. The US fares particularly poorly, in 114th place. The western countries have long life expectancy and people are reasonably happy, but the countries suffer in the rankings due to their ecological footprint, reflecting high levels of consumption.

The challenge for the west, the report says, is not to keep increasing incomes but to aim for more meaningful lives and stronger social ties. That might be a leap too far in the near term but the index is released when policymakers are exploring broader measures of progress rather than a desire to boost growth. French President Nicolas Sarkozy’s “Commission on the measurement of economic performance and social progress” is due to report soon.

Critics of such measures and summary indices say they are based on arbitrary data and calculations but most welcome their contribution to the policy debate.

“HPI is one of the several attempts to go ‘beyond GDP’ and to bring attention to important aspects of our life,” Enrico Giovannini, chief statistician at the Organisation for Economic Co-operation and Development, said. But, he added, “It is impossible to capture in a single indicator the complexity of our society.”

Source: The Financial Times Limited 2009