Costa Rica: The Near-Shore Alternative for Embedded Software Engineering PDF Print E-mail
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Costa Rica: The Near-Shore Alternative for Embedded Software Engineering
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By Larry Allgood, President, Avionyx

Most companies are aware of the software engineering talent that can be found in India and other distant countries that can be utilized to reduce their overall software engineering costs. And with the economy slumping, many more companies are now looking at this option much more closely. Although there are many decisions to make and risks to take when going off-shore, Costa Rica offers a near-shore alternative that may make the decision a lot easier.

Near-shore outsourcing

As with buying real estate, the three most important things to consider when going off-shore are Location, Location, Location! This couldn’t be truer for going off-shore since the location affects nearly every critical aspect of how you will do business from now on. Consider this: Your location dictates how often and how soon you will be able to travel to, communicate with and ship to your off-shore location. Any company that has been to India and to Costa Rica can attest to the difference.

While India has plenty of talent and established companies to choose from, the 20+ hour flights are imposing and so is the one day lag time in day-to-day communications due to a 12-hour time difference which makes it difficult – if not impossible - to include all the team members in weekly teleconference status meetings.

Now throw in high employee turnover rates that make it unlikely you will have any continuity of team members from one project to the next. Shipping delays can span weeks. Putting a liaison at your location can help in some cases, but not always.

It is easy to understand why some companies have procrastinated in making the decision to go offshore.
But why go half-way around the planet to get cost-effective engineering talent? You may have asked yourself “Are there any developing countries in the Western Hemisphere that have software engineering talent and infrastructure that can compete with India?

Well, although many companies are not aware of it, the answer is definitely YES.

While many Americans are familiar with Costa Rica as a vacation, retirement or real estate investment destination, most are completely unaware that over 300 foreign companies (mostly from the US) have been quietly setting up operations in Costa Rica since 1997. These companies have been taking advantage of an excellent university system that has been producing top engineering talent for years, most of whom speak English fluently.

Intel – The First Company to Discover the Talent

It all started when Intel realized that Costa Rica had made a strategic decision 50 years ago to discontinue its military choosing instead to use that money to educate its people. Intel opened in Costa Rica and soon after turned its start up Integrated Circuit Fabrication facility into its most efficient Fab in the world, the only one that manufactures Intel´s server CPUs. And, although Intel is closing many of its fabs in Asia, it continues to expand its fab in Costa Rica.

As the news spread, more and more companies moved to Costa Rica, including Procter & Gamble, Hewlett-Packard, L-3, and Baxter Healthcare. Today, a new company moves to Costa Rica every 20 days.

Costa Rica has four major universities and 50 private colleges located in the San Jose valley, and it attracts 78% of all Central American engineering students. The computer science, computer engineering and electronic engineering programs are on par with major US universities.

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