Software Product Development Talent Pool Assessment South America

March 2013

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Summary
South America is emerging as a key destination for Software Product Development. Countries such as Brazil, Argentina and Chile are key hubs for software development talent. Top MNCs such as IBM, Oracle, Google, Redhat, Symantec etc. have set-up their offshore centers in these three locations Among the three South American Countries studied, Brazil has the most mature ecosystem for Software Product Development. The total installed Software Development talent pool available in Brazil is about 39,450 professionals while installed talent base in Argentina and Chile is about 4,750 and 1,600 respectively. Over 70% of the talent in these three countries work in development and testing functions. Brazil has a better university Ecosystem as compared to Argentina and Chile. The country produces over 35,000 fresh graduates eligible to work in the Software Product Development domain followed by Argentina which produces over 3,800 fresh graduates and Chile about 2,800. Brazil and Chile also have a vibrant start-up ecosystem. Start-up Brazil was a set-up the Ministry of Science, Technology and Innovation (MCTI) to promote start-up activity in IT Products and Service. The program has a investment of R$36 million ($18 million) and in 2012 nine accelerator programs received funding. Start-up Chile was set-up in 2010 by the Chilean government to promote start-up activity. In 2012, 105 companies worldwide received funding from this program.

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Overview of South American Software Product Development Talent Pool

Brazil contributes almost 85% of the Software Product Development Talent pool among the 3 South American countries

Recife (3%) Brasilia (5%) Belo Horizonte (10%) Campinas (9%) Rio de Janeiro (20%) So Paulo (34%) Curitiba (10%) Porto Alegre (5%) Buenos Aires (86%)

BRAZIL

39,450

CHILE

1,600

Santiago (100%)

Rosario (14%)

ARGENTINA

4,750

Total SPD* Talent Pool within a country as covered in Talent Neuron

Note: * SPD: Software Product Development Software Product Development based on talent neuron definition refers to talent that develops software products. This talent pool does not include IT services and profession services talent. 7 Source: Talent Neuron

SPD Talent Pool split by Functions

More than 75% of the talent pool in the 3 countries are working in the Development and Testing functions
SPD* Talent Pool Breakup across Functions

Argentina
5.3% 5.3%

Brazil
7.1% 6.3% 8.1% 45.3% 6.3%

Chile
3.1% 3.1%

5.3%

39.8%

43.8%

39.0% 38.6%

43.8%

4,750

39,500

1,600

Development

Testing

Design

Conceptualization

Management

Note: * SPD: Software Product Development Note: * SPD: Software Product Development Software Product Development based on talent neuron definition refers to talent that develops software products. This talent pool does not include IT services and profession services talent. 8 Source: Zinnov Neuron Source: TalentTalent Neuron

SPD Talent pool growth and projected Talent pool till 2015
Argentinas talent pool is expected to grow at a higher rate as compared to the steady growth rate seen in Brazil and Chile
Growth of SPD* Talent Pool
4.8% 5.7% 4.3% 7.2%

7.7%

4,200

4,400

4,650

4,850

5,300

5,600

Argentina
2010 2011 2012 2013E 2014E 2015E

3.9%

4.0%

4.1%

4.3%

4.0%

Brazil

36,350

37,750

39,250

40,850

42,600

44,300

2010
6.9%

2011
3.2%

2012
3.1%

2013E
3.0%

2014E

2015E
2.9%

1,450

1,550

1,600

1,650

1,700

1,750

Chile
2010 2011 2012 2013E 2014E 2015E Growth Rate
Note: * SPD: Software Product Development Note: * SPD: Software Product Development Software Product Development based on talent neuron definition refers to talent that develops software products. This talent pool does not include IT services and profession services talent. 9 Source: Zinnov Neuron Source: TalentTalent Neuron

SPD Talent Pool Availability Across South American Cities

Sao Paulo, Rio de Janeiro and Buenos Aires have large SPD talent pool which makes them favorable for Software Product Development operations
Software Talent across Key Locations
16,000 14,000 12,000
13,250

Brazil

Argentina

Chile

10,000
8,000 6,000 4,000 2,000 0
3,600 3,750 3,900 2,000 1,900 7,850

4,100

1,350 650

1,600

Note: * SPD: Software Product Development Note: SPD: Product Software Product Development Software Development based on talent neuron definition refers to talent that develops software products. This talent pool does not include IT services and profession services talent. 10 Source: Zinnov Neuron Source: TalentTalent Neuron

Development Costs Across Various Cities

Emerging locations like Campinas, Curitiba, Recife, Buenos Aires and Rosario have lower salary costs which help in lowering the costs of operations
120 Brazil 100 Argentina Chile

USD Thousands

80

60

40

20

0 Sao Paulo Rio de campinas Belo Curitiba Janeiro Horizonte Min Porto Alegre Brasilia Max Recife Buenos Aires Rosario Santiago

Median

Note: * SPD: Software Product Development Software Product Development based on talent neuron definition refers to talent that develops software products. This talent pool does not include IT services and profession services talent. 11 Source: Zinnov Neuron, Interviews with Captive and Vendor Software Development Center Stakeholders Source: TalentTalent Neuron

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