Chile – Country Overview & IT Profile
MIS 680 – International Issues in
Information Systems
Professor Licker
Cliff Bliss
Alex Nielsen
Ron Papa
11-10-03
Agenda
Country Overview :
• Brief History
• Geography
• Infrastructure
• Economy
• Government/Politics
• Culture
Information Technology Landscape :
• Telecommunications/Infrastructure
• eCommerce
• Hardware & Software
• Analysis
• Overall Recommendations
–2–
Chile – Brief History
Chile is located along South America’s west coast. Chile is bordered by the
Andes on the east and the Pacific Ocean on the west.
Chile has a pervasive European heritage. Although most people from Chile
have a Spanish ancestry many European groups are influential. These groups
include, Irish, English, German, Italian, Croatian, French and Middle Eastern.
Chile’s Native Americans are also a very influential group.
A three-year-old Marxist government was overthrown in 1973 by a dictatorial
military regime led by Augusto PINOCHET, who ruled until a freely elected
president was installed in 1990. Sound economic policies, first implemented
by the PINOCHET dictatorship, led to unprecedented growth in 1991-97 and
have helped secure the country's commitment to democratic and
representative government.
–http://www.cia.gov/cia/publications/factbook/print/ci.html
–3–
Chile – Geography
Climate: temperate; desert in north;
Mediterranean in central region; cool
and damp in south
Terrain: low coastal mountains; fertile
central valley; rugged Andes in east
Geography: strategic location relative
to sea lanes between Atlantic and
Pacific Oceans (Strait of Magellan,
Beagle Channel, Drake Passage)
Area - comparative: slightly smaller
than twice the size of Montana
Language: Spanish
Population Growth: 1.05%
–http://www.cia.gov/cia/publications/factbook/print/ci.html
–4–
Chile – Geography
–5–
Chile –Infrastructure
Ports and harbors:
Antofagasta
Arica
Chanaral
Coquimbo
Iquique
Puerto Montt
Punta Arenas
San Antonio
San Vicente
Talcahuano
Valparaiso
–http://www.cia.gov/cia/publications/factbook/print/ci.html
–6–
Chile –Infrastructure
Paved Highways
Airports
w/ paved runways
Railways
Chile
Montana
Doubled
United
States
11,012 km
225,806 km
5,733,028 km
71
234
5,131
6,585 km
194,731 km
–http://www.cia.gov/cia/publications/factbook/print/ci.html
–http://www.mdt.state.mt.us/map/fastfact.htm
–7–
Chile –Infrastructure
Electricity - production:
41.66 billion kWh (2001)
Electricity - production by source:
fossil fuel: 47%
hydro: 51.5%
other: 1.5% (2001)
nuclear: 0%
Electricity - consumption:
40.13 billion kWh (2001)
Electricity - imports:
1.386 billion kWh (2001
–http://www.cia.gov/cia/publications/factbook/print/ci.html
–8–
Chile –Economy
• Market-oriented economy
• Stock Market
• Signed free trade agreement with the US on 11 December 2002
• High level of foreign trade
• Export $17.8 billion
• Import $15.6 billion
• Debt $40.4 billion (2002)
• Strongest sovereign bond rating in South America
• Fifteen year growth (1998 is the only exception)
Budget:
revenues: $17 billion
expenditures: $17 billion
–http://www.cia.gov/cia/publications/factbook/print/ci.html
–9–
Chile –Economy
Distribution of family income - Gini index:
Chile 56.7 (1998)
U.S. 40.7 (1997)
Inflation rate (consumer prices):
Chile 4.5% (2002 est.)
U.S. 1.6% (2002)
Labor force:
5.9 million (2000 est.)
Labor force - by occupation:
agriculture 14%
industry 27%
services 59% (1997 est.)
Annual growth: 3.5%
–http://www.cia.gov/cia/publications/factbook/print/ci.html
–http://www.lonelyplanet.com/destinations/south_america/chile_and_easter_island/
– 10 –
Chile –Economy
Chile
Montana
Unemployment
9.2%
4.6%
Poverty
21%
13.7%
Per Capita Income
$10,000
$ 24,044
Chile
Montana
Doubled
Gross Product
184 Billion
45.2 Billion
Population
15,665,216
1,818,906
–http://www.cia.gov/cia/publications/factbook/print/ci.html
–http://www.mdt.state.mt.us/map/fastfact.htm
– 11 –
Chile– Government/Politics
Legal system
• Currently based on Spanish law
• US-style adversarial system is being gradually implemented throughout
the country
Executive Branch
• Popular vote
• Six Year Term
• Senator for Life
Legislative Branch
• Senate
• Chamber of Deputies
Supreme Court
Several Political Parties
–http://www.cia.gov/cia/publications/factbook/print/ci.html
– 12 –
Chile – Culture
Literacy: total population: 96.2%
Thirty One Universities
Education: 12 Years Compulsory, 13 million in Attendance
Health: Childbirth rate 2.4 children, Infant mortality rate 8.9/1,000. Life
expectancy 79 yrs
Chile's European heritage is pervasive
Nobel Prize-winning poets Gabriela Mistral and Pablo Neruda
Until the military coup of 1973, its cinema was among the most experimental
in Latin America
National Parks
Major industries: Copper, fishmeal, wine
Major trading partners: USA, Japan, Germany, UK
–http://www.lonelyplanet.com/destinations/south_america/chile_and_easter_island/index.htm
–http://www.state.gov/r/pa/ei/bgn/1981pf.htm#people
– 13 –
Chile – Culture
PEOPLE
- About 85% of population lives in urban centers, concentrated in the southern
and central regions with 40% living in greater Santiago.
- Nearly half the population is under 25 years of age
- 72 % is under 40
- Most have Spanish ancestry
- Small, yet influential number of Irish and English immigrants
- German immigration to the southern provinces of Valdivia, Llanquihue, and
Osorno
- Other significant groups: Italian, Croatian, French, and Middle Eastern
- About 800,000 Native Americans, mostly of the Mapuche tribe, reside in the
south-central area.
–http://www.state.gov/r/pa/ei/bgn/1981pf.htm#people
– 14 –
Chile – Culture
PEOPLE
- Culture is a mix of Spanish and indigenous groups native to the region
- The common religion is Roman Catholic
- Although society is not riddled by ethnic, religious or regional conflicts,
certain class barriers and distinctions still exist
- Modernization has improved the quality of life, yet great disparities in income
are still apparent
- The present challenge is to overcome the growing gap between those with
easiest access to a modern Chile, and those left behind.
–http://www.chiptravel.cl/
– 15 –
Chile – Culture
Huasos
Like the Argentinian Gauchos, east of the Andes,
the Chilean huasos are skilled horsemen, honing
their skills daily. Over the years, the huaso has
come to signify much of the Chilean folkloric
culture, and he is a vital part of parades, fiestas,
and holidays.
–http://gosouthamerica.about.com/library/weekly/aa051302b.htm
– 16 –
Chile –Telecommunications/Infrastructure
Telephone system
General assessment:
Modern system based on extensive microwave radio relay facilities
Domestic:
Extensive microwave radio relay links; domestic satellite system with 3 earth
stations. Mobile telephone service has been a key driver of growth in the
telecommunications sector. Between 1999 and 2001, mobile subscribership in
Chile soared from 2 to 5 million. Mobile use in 2001 surpassed fixed-line use
with a density exceeding 34 mobile phone lines per 100 inhabitants. Chilean
officials predict that by 2010, 60 percent of the population will have mobile
phones.
International:
Satellite earth stations - 2 Intelsat (Atlantic Ocean)
–http://www.cia.gov/cia/publications/factbook/print/ci.html
–http://www.osec.doc.gov/latinamericatrademission/telecom%20pc.htm
– 17 –
Chile –Telecommunications/Infrastructure
Chile
Telephones
2.603 million (1998)
Cell phones
5 million (2001)
ISP
7 (2000)
ISP
11 (2003)
–http://www.cia.gov/cia/publications/factbook/print/ci.html
–http://www.osec.doc.gov/latinamericatrademission/telecom%20pc.htm
– 18 –
Chile –Telecommunications/Infrastructure
July 2001 Data
AMPATH (AmericasPATH project)
Connect Research and Education networks
• North America
• Central America
• South America
• Caribbean
Chile was the first participant
Optical Fiber Network
“ Chile has a small, but very active scientific community that has placed a
priority on integrating into the worldwide scientific community by electronic
means.”
Florencio Utreras
Director RENUNA
–http://www.lanic.utexas.edu/la/chile/
– 19 –
Chile –Telecommunications/Infrastructure
2003 Data
Estimated Internet Users: 4,000,000
Projected Users by end of 2004: 4,500,000
–http://www.lanic.utexas.edu/la/chile/
–http://www.buyusa.gov/chile/en/page85.html#5
– 20 –
Chile – eCommerce
Estimated that 25% of Chileans will buy over the Internet this year and total
sales via the Internet will reach $6 billion annually in Chile by 2004.
Amarillas.com
• American and European Business Portal
Mercantil.com
• Latin American Business Portal
Chilnet.cl
• Chilean’s Business Portal
–http://www.amarillas.com
– 21 –
Chile – Hardware & Software
Technology Initiatives and Regulations
• Government sponsored “Enlaces” program which funds and supplies
computer equipment and internet access for it’s state-funded schools.
• Signed the Joint Statement on Electronic Commerce with the U.S. (2000).
• Partnership with the U.S. - Inter American E-Business Fellowship Program.
• Chile’s government has set as a goal that, by 2005, the Internet should be
just as accessible in Chile as it is in the developed world.
http://www.mac.doc.gov/ebusinessfellowship/
– 22 –
Chile – Analysis
- Positive Economic Growth
- Stable Political System
- Free Market System
- High Unemployment
- High Gini Index (Digital Divide)
Level of
Economic Growth
Political
System
Key MIS
Management
Issues
Culture
Palvia, Palvia & Whitworth 1996
– 23 –
IT
Strategy
Chile – Analysis
Industrial
Policy
Environmental
IT
Economic
Factors
Diffusion
Payoff
Industry
Structure
Dedrick & Kraemer 1998
• Politically stable for 13 years
• Economic growth for 15 years
• European influenced Society
• Sound Education System
• Corporations (AT&T) are investing in Infrastructure
• Economy is growing
– 24 –
Chile – Analysis
Hofstede
Power-Distance - High
Uncertainty Avoidance - High
Individualism - Low
Masculinity - High
Shore’s Model
Risk vs. Power Distance - Pyramid
– 25 –
Chile – Analysis
GLITS Model
Rank
Variable
1
Customers
2
Time Zones
3
Products & Services
4
Economies of Scope
5
Integration
Chile
Access to South American Market
Strong Benefit
2 hours ahead of eastern time
Minimal Benefit
Educated workforce, High Unemployment
Benefit
Ports for Product Transportation
Benefit
Fiber Optic Access from U.S.
Benefit
– 26 –
Chile – Analysis
Supply Chain Management
Porter’s 5 Competitive Forces
New Entrants
Suppliers
Traditional Rivalry
Among Firms
Substitutes
– 27 –
Buyers
Chile – Analysis
Trans Border Data Flow
Technology
- Fiber Optic connection to North America, Central America and Europe
complete.
Cultural
- Protectionism ???
Laws
Several gov’t initiatives include a draft law on the use of electronic signatures
written to international standards, and regulation of certification services.
Other legislative projects refer to cyber-squatting, electronic contracts,
consumer rights, and online privacy. A law before the Chilean Congress will
also update the legislation on intellectual property rights, bringing
them into line with international standards.
– 28 –
Chile – Overall Recommendations
If there is a current or future market in South America,
Invest in Chile!
Considerations
- Type of Corporation ( multinational vs. global etc..)
- Corporate Culture vs. Chilean Culture (Cooper’s Model)
Reasons
- Localized Service in a Developing Market
- Corporations are Making Investments in Infrastructure
- Stable Political System
- Fiscally Stable
- Educated Workforce
- Pleasant Place to Visit
- Gateway to South America
– 29 –
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