Report: Cali Demanding Attention of Global Investors, as Demonstrated by Giant Hi-Tech Business Park Under Construction
Based on a private report released in November 2014 by the global research firm Everest Group, Cali, Colombia does not necessarily receive the attention it deserves as an ideal global services delivery destination. More famous for its world class salsa scene, its “La Sexta” party district, and its musicians like Grammy-winning Grupo Niche, Colombia’s third largest city in terms of population and GDP has several features that make it competitive, and attractive for national and international investment.
Colombia has a very well respected university and higher education infrastructure concentrated in the south of the city allowing it to supply ample talent for technology sector, with an employable talent pool that accounts for over 20.000 university graduates, 7000 technical school, and 35.000 high school graduates every year.
According to Everest Group, Cali is positioning itself as an ideal location for the global services industry due to its strategic location, high educational standards, excellent talent pool & low operational costs.
“The amicable environment for foreign investment, the region´s political and economical stability, as well as the quality of its human talent, makes Cali the perfect destination for the global service industry, says Jaime Miller, the CEO of Zonamerica, a Uruguay based business park developer that is building a large, class-A business and technology free-trade zone in the south of Cali. “The main criteria used by global services companies when choosing a destination for their operations, are human talent, infrastructure, business environment and industry maturity; these factors are undoubtedly improving in Cali.”
“Before choosing Cali as the location for our new business park, we assessed other countries in Latin America and the Caribbean that are well-known destinations for nearshoring, and to target regional demand. However, we selected Colombia due to the fact that is the 4th biggest economy in Latin America, it shares the same time zone as several North American markets, and it accounts for a scalable and sustainable, high quality talent pool, that makes big service operations viable, which is what Everest Group is confirming with this report”, adds Miller.
Everest compared Cali with other recognized global services destinations in the region, including Miami, Bogota, Costa Rica and Monterrey. The results were conclusive, stating that Cali is highly competitive among these cities, and is very attractive for companies looking to set up service operations with good quality standards and low operational costs. Anurag Srivastava, Senior Partner at Everest Group, said “Cali has a very interesting value proposition, based on four key pillars: Skilled, qualified and sustainable talent pool; low operational costs; proximity to the main Colombian seaport of Buenaventura; and the city provides a robust business-enabling environment. That has already been proven by large foreign multinationals.”
Srivastava continued, stating that: “This value proposition allows Cali to perform four potential roles for the global services industry: Servicing Latin America and Spain; supporting small-scaled business-process service delivery for the US and Canada; act as a spoke for larger hub locations serving regional demand, helping diversify talent and environment risks; and finally, Cali is a key location to meet the considerable Colombian demand.”
The report noted that Cali accounts for 2.3 million inhabitants, with another 700,000 in surrounding communities, and an annual GDP growth rate of 4.5%, while maintaining less than a 2% yearly inflation rate. It also revealed that Cali is the city with the lowest operational costs among the comparative group of cities, with up to 30% savings when compared to Monterrey, and operating costs over 75% less expensive than Miami.
Click Below To See Additional Charts on Cali’s Cost Advantages:
- Operating costs compared to other LatAm cities
- Roles Cali can play in regional service delivery networks
- Cali’s value proposition as a service delivery location
“Cali offers benefits and advantages that make the landing and setting up process a lot easier for outsourcing companies (BPO, ITO or KPO), but also for a shared service center (SSC) operation, from which they can address the Latin American and Spanish markets and the US market,” said Miller.
The study indicated some challenges that the city and its promoters still face if they want to continue to grow as an ideal global services platform. One of the issues is getting its young talent pool to consider the service industry as an attractive career path. According to Miller, “nowadays the industry is strongly associated with call center duties, but this is just a small portion of it. Based on our experience in Uruguay, it will be our challenge to show Cali’s talent pool that there are different ‘verticals´ within this industry, that require complex skills and represent great career opportunities, whether in a SSC operation, a BPO or a system development platform in an ITO company, for example. These are definitely exciting and rewarding jobs.”
Everest Group noted some other interesting facts, such as that there are currently over 20,000 people already supporting the BPO sector in the city, and 4,000 in the IT industry. The local government states that public mass transportation covers up to 97% of the city, and that the Alfonso Bonilla Aragón airport is the second most connected airport in Colombia, offering more international direct connections than any other Colombian airport, save for Bogota’s El Dorado International Airport.