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Developing Supply Chains for Foreign Investors in Costa Rica Leveraging FDI for technological learning and suppliers development. Roberto Calvo Director Costa Rica Provee Foreign Trade Corporation of Costa Rica. Country’s background Supply Chain Development Final remarks. Agenda.

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slide1

Developing Supply Chains for Foreign Investors in Costa RicaLeveraging FDI for technological learning and suppliers development

Roberto CalvoDirector Costa Rica ProveeForeign Trade Corporation of Costa Rica

slide2

Country’s background

  • Supply Chain Development
  • Final remarks

Agenda

slide3

Costa Rica at a glance

  • Population: 4 million citizens.
  • In the “center” of the Americas
  • Oldest democracy in Latin America
  • Universal Educational and Health System
slide4

Costa Rica at a glance

  • Literacy Rate = 95%
  • GDP per capita: US $ 3,920
  • Life expectancy: 78.1 years
  • 6% of world’s biodiversity
slide8

Suppliers key role…

Opportunities

  • The 10 biggest U.S. automotive manufacturers spent 48 cents out of every dollar in sales in 2002 to buy materials, compared with 43 cents in 1996. (Liker, HBR)

Businesses are increasingly relaying on suppliers costs, improve quality, and develop new processes and products (innovation) faster than their rivals’ vendors can .

slide9

Supply Chain Linkages“Costa Rica Provee”

To contribute to increased national value-added in the production of multinational firms installed in Costa Rica, and as a result, improve the competitiveness of small and medium-sized enterprises (SMEs).

slide10

Primary Goals

- Improve the STI and production capacity SMEs through first class business relationships.

- Contribute to the development of value-added local production through linkages.

- Set up mutually beneficial relationships between local companies and institutions that foster competitiveness in the production sector.

slide11

Match – Makers!!

STEP 1: DEMAND

STEP 2: LOCAL SME

slide12

Costa Rica Provee

Training and Assesment

TNC

SME

slide16

R+D + Innovation

Shared Services

Metalwork, (Level 3)

Plastics (Level 3)

Chemistry (L3)

2006

Metalwork, (Level 2)

Plastics (Level 2)

Chemistry (L2)

VA. Services (Level 2)

STI complexity

Metalmecanics, (Level 1)

Plastics (Level 1)

Chemistry

VA. Services (Level 1)

1996

Packaging,

Pallets (transport accs)

Consumables.

LOW

HIGH

Strategic Value for Electronic TNC

(Indirect Materials)

suppliers sti capacity building development
Suppliers STI Capacity Building Development
  • Improvement of the productive processes (15%)
  • Innovation, investigation and development with special materials or services (18%)
  • New technologies (22%)
  • Specialized Certifications (ISO 13485, ISO 9001:2000) (7%)
final remarks for developing a program on your country
Final remarks.. for developing a program on your country
  • Sustainable linkages are not produced automatically as a direct consequence of FDI presence… it requires participation of Local Government, favorable policies, business conditions, and Business Community openness (TNC and SME).
final remarks for developing a program on your country19
Final remarks.. for developing a program on your country
  • 2. For MNC: Local sourcingisnot (only) Social Responsability, it’s a competitiveissue
  • 3. For SME: Think locally, act globally.

“Toyota helped us dramatically improve our production system. We started by making one component, and as we improved, [Toyota] rewarded us with orders for more components. Toyota is our best customer”.

Senior Executive, supplier to Ford, GM, Chrysler and Toyota, July 2001. (Choi, HBR)