Park life: Potential new development platforms and the need for more English-speaking workers have both been identified

Technology parks have been a part of Colombia’s efforts to attract high-level foreign investments for some time. The concept was first studied in 1996 with support from the Spanish government. In 2000 the government published a set of guidelines to encourage regional administrations and private investors to propose projects. This was followed by Law 590 of 2000 and Law 905 of 2004, in which the park concept was advocated as part of the economic growth policy. Various initiatives were born as a result, and while some did not make it past the drawing table, Colombia has since seen significant progress on a few important initiatives. Notable developments have taken place at the parks of Guatiguará, near Bucaramanga in the north-east, and Manantiales, located in the coffee region, near Antioquia.

RECENT PARKS: The technology park at Guatiguará was developed in 2003, under an initiative of the nearby Universidad Industrial de Santander (UIS), which aimed to cement closer ties with the local private sector, in particular with the nearby refinery of Barrancabermeja, the biggest in the country. As a result, its research focuses mainly on energy resources as well as biotechnology and information and communications technology (ICT). Execution of the master plan over the past few years has been gradual, and a major milestone was reached in 2012 when the park opened its main research facility to investors. Currently, the park accommodates some 300 researchers divided among 14 laboratories, while completion of the master plan will see a rise in the latter to 38 units. Funding has been a key challenge to the advancement of the project and has thus far come predominantly from regional authorities and universities. According to the park management, $60m will be required for completion of the plan – an amount for which more private sector participation is essential. The technology park of Manantiales was conceived in 2010, making it the most recent project under construction. Nevertheless, it is already among the most advanced. Promoted by the regional Antioquia government, the project has received some COP25bn ($15m) in funding from the Institute for the Development of Antioquia (Instituto para el Desarrollo de Antioquia, IDEA), the province’s development agency, while another COP50bn ($3m) has been reserved for upcoming investment. The National Service of Learning (Servicio Nacional de Aprendizaje, SENA), the public educational agency, is also investing. In September 2012 the park’s management announced it was breaking ground on the first two of the master plan’s five phases.

KEY INVESTORS: The rapid progress has been facilitated by the confirmation of four investors, including US-based consumer goods company Kimberly Clark, which has chosen the location for one of its three worldwide innovation centres. Local investors include the Empresas Públicas de Medellín, the city’s public utility company, which is investing in a research centre for nanotechnology; Quipux, which is a consultancy specialising in transport; and SENA. The master plan, which entails 60 buildings on an area of 35 ha, is set to be completed in 2017. According to the park’s management, the facility will have the capacity to accommodate 200 companies in a selection of high-impact disciplines including nanotechnology, ICT, pharmaceuticals, mining, bioengineering, agriculture and forestry. Besides IDEA’s funding, the park’s management estimates that it will need private sector investments totalling $200m.

MORE PROJECTS AHEAD: Other projects at varying stages of development include the technology parks of Eje Cafetero near the city of Pereira in the primary coffee region; Del Caribe, located near the city of Barranquilla on the Atlantic coast; and La Sabana, in the Cundinamarca region, near Bogotá. While most of these projects have been designed and promoted by regional governments, the private sector has played a key role in the development of the Parque Tecnológico Del Caribe. Similar to previous governments, the administration of President Juan Manuel Santos has adopted technology parks as a tool to encourage innovation investments, particularly from the private sector, and it has taken measures to optimise synergies among the different regional initiatives as well as promote their relationship with the business community. As a result, the Productive Transformation Programme (Programa de Transformación Productiva, PTP) – a partnership that has been established between the Ministry of Commerce, Industry and Tourism and the private sector and is aimed at increasing productivity in key growth sectors of the economy – has been put in place with support from Colciencias, the National Planning Department and the Ministry of ICT.

The project defines key guidelines and proposes recommendations to policymakers that are aimed at achieving standards in line with leaders of innovation such as South Korea. Since 2012 the PTP has been working with representatives from the South Korea International Cooperation Agency (KOICA) and the Ministry of Strategy and Finance of South Korea’s Knowledge Sharing Programme, studying success factors and their possible application in the Colombian context.

Final results had yet to be published at the time of writing, although PTP partners have commented on some preliminary findings. They have found that the parks need a holistic and integrated strategy that addresses key needs on the legal, technological and human resources (HR) fronts. More collaboration between academia and the private sector is required to optimise the use of research output and get local and foreign investors to finance and use it. Technology parks should be commercialised more optimally to alleviate the burden on public financing.

BPO: One way to achieve this is to incorporate business process outsourcing (BPO) in the parks’ commercial model, as has been done in South Korea. While BPO is not new to Colombia’s technology parks and has been at the core of the creation of some of these parks, the PTP believes that past strategies lacked a holistic approach that included the qualification of human resources, an enabling regulatory framework and the certification of companies. Moreover, it emphasises that the focus should be on its higher value-adding segments of knowledge process outsourcing and information technology outsourcing, rather than the more basic contact and support centres on which sector growth has thus far been based.

Colombia has important competitive advantages for such activities stemming from its strategic central location in the Latin American region and its comparatively well-developed communications infrastructure. This is of interest to many investors from the US, but also caters to the needs of local and regional companies. “The Colombian market itself offers ample potential to justify efforts to develop the industry, even though our aims remain focused on regional and, eventually, global investments,” Juan Carlos Garavito, PTP’s general manager, told OBG. He estimated the size of the current market in Colombia at some $2.5bn, a value that should grow in line with – if not faster than – the national economy if concerted efforts are taken.

PLATFORMS: The PTP has identified the cities of Bogotá, Medellín and Santiago de Cali as development platforms for these services because existing BPO infrastructure there is the most developed, while the Inter-American Development Bank has granted a $12m loan to fund Finishing Schools, an HR development strategy aimed at closing the gap in education, soft skills and language knowledge. The collaboration with KOICA is also part of these efforts, and over the past year members have paid visits to some parks to identify areas where Korean success factors can be applied. In addition to the focus on industry development, market needs and requirements are also being addressed. At present the demand for outsourcing of high-value services is still in its infancy. “The value perception is something that needs careful attention and is best approached by continuous interaction with the private sector, listening to their needs and including these in the strategy behind technology parks,” Garavito told OBG.

ISSUES: Another challenge to the success of the development plan is the lack of qualified engineers. In recent years, various universities have scrapped engineering degree places due to a lack of student enrolment. Currently, the Ministry of ICT is actively promoting engineering programmes through scholarships, marketing campaigns at high schools and efforts aimed at improving job security, but there is still a long way to go. SENA is undertaking similar efforts through its network of polytechnic academies that have been established since 2010. It is also co-investing in technology parks, such as Manantiales, to ensure onsite educational facilities at a subsidised cost for students. At the time of writing, it operated 15 such centres and had plans to open three more before the end of 2013.

Bringing in foreign labour is another important point of consideration. The PTP has proffered the idea of attracting experts from countries with exemplary technological sectors to train Colombian teachers, students and professionals. “It’s not just the technical knowledge that is required for a globally competitive and high-value BPO industry; it is also the discipline behind it. We need to change the way we approach the industry in order to guarantee its success,” Garavito told OBG.

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The Report: Colombia 2013

Research & Innovation chapter from The Report: Colombia 2013

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