Costa Rica wins big with Intel

Intel's investment and presence have had an overwhelmingly positive impact on Costa Rica, generating both direct and multiplier effects on the country's economy, industry, educational institutions and business culture. Intel's requirements served as an important motive for the country to immediately upgrade its infrastructure and enhance the investment climate to the benefit of all investors. The process of attracting Intel to Costa Rica helped shape the country's investment promotion strategy.

From a World Bank Group case study on the impact of Intel in Costa Rica (you may have guessed that one), after the company's 1996 decision to locate a $300 million semiconductor assembly and test plant there.

I spent two wonderful years in San Jose, and I heard many people tell me with great reverence that they dreamed of one day working at Intel. Costa Rica initially won Intel over with its highly educated workforce. But now we see a healthy follow-on effect, in which young students are encouraged in their studies by the prospect of a job at a gleaming multinational.

The period following the investment shows significant GDP growth, staggering increases in exports, and otherwise generally positive outcomes, although Intel's size and volumes exaggerated the depth of Costa Rica's economic downturns. Intel is responsible for a shift in the country's top exports, from coffee and bananas to electric and electronic products. Electronics is now Costa Rica's largest sector with Intel as the largest player. The industry employs 12,000 and exports US$1.65 billion in products a year. The local support industry for Intel alone reflects a base of 460 suppliers and US$50-150 million in local purchases of goods and services per year.

It's good to see investment promotion agencies getting it right.