Latin America | 19 Dec 2012
Medellín has set its sights on becoming the newest centre for innovation in Latin America. The local government is supporting an array of initiatives aimed at attracting new industry and research centres to the city, and the private sector appears to be responding, with companies such as Hewlett Packard (HP) and Kimberley-Clark announcing plans to invest.
Juan David Perez, the manager of the Antioquia division of the National Business Association of Colombia, told OBG, “Medellín is in the middle of a transition, transforming itself from a traditionally industrial city to a services and business process outsourcing (BPO) centre. Despite this transition, we still have a lot of manufacturing in the city, as the region is working in business retention strategies, or at least trying to relocate its industry within the Antioquia department, where Urabá (in Colombia’s northwest) will play a particularly important role.”
The Medellín government has identified six business “clusters” to promote within the city: energy, construction, fashion, tourism, health care, and information and communications technology (ICT). Of these six, Perez believes that ICT BPO, energy consulting and health have great potential for growth.
The local municipality has demonstrated a strong commitment to supporting these clusters, in particular by investing in the formation of Ruta N, a corporation the municipality holds in partnership with UNE, a telecommunications company, and EPM, a public utilities firm.
Medellín invested some COP$35bn ($19.18m) in the construction of the Ruta N Complex, a 32,000-sq-metre area that will consist of three office buildings. The complex will be occupied by HP’s Global Service Centre, a research and development wing of EPM, and a centre of innovation and development for ICT, which will be staffed by a mix of local and international researchers.
Juan Pablo Ortega Ipuz, the executive director of Ruta N, told OBG, “Medellín is prepared to compete with other regional technology centres, as all stakeholders in the city are committed to its development, and there is an unusual connectivity among academic institutions, private companies and the public sector.”
This is certainly true in the case of HP. The ICT manufacturer and service provider signed an agreement with the Medellín municipality to occupy eight floors of one of the Ruta N buildings for at least the next 10 years. HP has also established a working relationship with the EAFIT University in Medellín.
“The arrival of leading technology companies, such as HP, contributes to increase the city’s productivity, as it promotes the training of specialists in technology and innovation, prevents brain drain and helps develop an entire ecosystem that implies the arrival of cutting-edge technology,” Ortega told OBG. Medellín officials hope that the arrival of HP in the city may encourage other BPO firms to follow their lead.
Another large technology park similar to Ruta N is being constructed near the José Maria Córdaba Airport. The Antioquia Development Institute (IDEA), a government agency, has invested around COP$25bn ($13.69m) in the development of the Manantiales Technology Park (MTP). On completion in 2017, the park will consist of 60 buildings, which could host up to 200 companies.
Thus far, Kimberley-Clark, a US-based consumer product company, has committed to developing a global innovation centre in the MTP. This would be the third Kimberley-Clark Innovation Centre in the world; the other two are located in South Korea and the US. EPM has also made plans to form a research centre in the MTP, which will be dedicated to exploring how nanotechnology can be used to generate energy.
One of the most important challenges Medellín faces in moving forward with its plans to become an innovation centre is the need to develop a highly skilled, bilingual workforce. Bilingual workers are particularly high in demand among BPOs. “The entry of large multinationals, such as HP, should boost initiatives towards achieving bilingualism,” Perez told OBG.
Some private sector players are directly supporting the development of a bilingual workforce through new collaborations with a number of English-language schools. One example is a partnership formed between The South American Investment Company (Grupo de Inversiones Suramericana, Grupo Sura), a multinational investment firm located in Medellín, and the Colombo-American Centre, a cultural and language-teaching centre also based in Medellín. Through this partnership, Grupo Sura will provide scholarships for 377 young people in the municipality to study English.