Global Connections

Sponsored by FIU Graduate School of Business, Waterford at Blue Lagoon and Comcast Business Class.

Infrastructure, security key concerns in Latin America's mobile technology boom, say executives from SAP, Cisco

21 May 2012

Mobile technology for work and private life will define what’s to come for Latin America's businesses and the rising middle classes America, however, there’s lots of work to do before everyone across the region has a smart phone in hand.

Video conferencing on mobile devices will only continue to grow, said Cisco's Carlos Tolares (left).

“Cell phone penetration in many Latin America countries is pretty high but when you get down to the smartphone level it drops off,” said Mark Crofton, vice president of mobility for SAP Latin America, at WorldCity’s Global Connections on April 27.

“In Colombia there’s 100 percent cell phone penetration for a more or less 60 percent banked population,” he added. “Forty percent [of the population] is unbanked, that’s an opportunity that doesn’t exist in the U.S. and there’s a huge opportunity to get people into the banking system through mobile payments.”

Those kinds of untapped markets are why more than 1,100 multinational companies have offices in South Florida, and many of them are increasingly relying on the array of smart phones and tablets to do their day-to-day business.

“In Latin America we see huge growth, especially in smart phones, and that is creating a lot of traffic demand,” said Oscar Fontalvo, director of international marketing for Level 3. The company purchased Colorado-based Global Crossing earlier this year for about $3 billion, acquiring a presence and data centers in Miami and across Latin America.

With the new expectation that people will be able to conduct nearly every aspect of their business on a mobile device comes the ever growing need for security.

“We have 15 data centers and we offer managed security services,” Fontalvo added. Additionally Carlos Tolares, head of Latin America business development for Cisco Latin America, said the company has a security business, geared particularly for wireless technology, alongside its business offerings.

Level 3 is moving some of its infrastructure closer to end users in Latin America, said Oscar Fontalvo.

All in the discussion seemed to be in agreement that mobile video technology is going to be the core of any mobile business strategy.

“I remember when I got into Cisco we used to have a lot of telephone systems or the video conferencing solutions, but for the last six years we’ve been using telepresence solutions,” Tolares said. “Four years ago I used to travel 80 to 90 percent of my time, with the technology I’ve reduced it to 50 percent and my projection is that I can get it to 20 percent in the next couple of years.”

More and more professionals using mobile technology in increasingly complex, data-demanding ways, however, is forcing companies like Level 3 to continually invest in more infrastructure.

SAP already has more than 18,000 iPads in the hands of its employees, said Mark Crofton.

“Video requires a lot more bandwidth than regular voice or data and what we see is a trend of migration,” Fontalvo said. One example he cited was Netflix, the online streaming and video rental company, which is making a push into Latin America. The videos are streamed over Level 3’s fiber network and to respond to increased demand “we are moving servers in Latin America in Brazil, Argentina and Colombia and we’re moving those libraries locally,” he added.

Even though governments have a hand in pushing Internet access to as many corners of their countries as possible, Latin America still has a ways to go, particularly on the commercial side.

Philip Vandervoort, head of business and marketing for Microsoft Latin America, asked what effect low levels of technology employment and fragment outdated networks will have on the region’s businesses.

Global Connections is one of seven event series organized by WorldCity to bring together executives on international business topics. The series is sponsored by Florida International University’s graduate school of business, Waterford at Blue Lagoon, Comcast and the Miami Marlins. The next Global Connections is set for May 27.

Challenges, opportunities abound for companies looking to do business in Brazil

08 May 2012

Doing business in Brazil is as enticing, profitable and challenging as ever.

Eyes remain focused on one of the world’s fastest growing economy as the World Cup and the Olympics near, however hurdles remain, including the cost of setting up a business and hiring good talent, the country’s lagging education system, and corruption within the highest level of government, said a panel of experts who’ve worked and lived in Brazil at WorldCity’s Global Connections on March 30.

The cost of hiring executives in Brazil could be prohibitive to some companies looking to expand there, said Marjorie Kean of Diversified Search.

As Latin America's largest economy continues to mature, the link between Brazil and China will grow stronger, however, it will continue to look to the U.S., and particularly Miami, for consumer goods.

“There’s a whole number of strategic materials that are of interest to China. I think China will become the largest buyer of those kinds of products.” said Gene Rostov, CEO and president of E. Rostov & Associates, a cross-border investment advisory firm, about Brazil's commodity exports.

“I think Brazil will continue to buy high tech and other kinds of products from the U.S.,” he added. “It could mean that there is less commerce of lower value goods coming going to Brazil, and possibly a reduction through the Miami, South Florida area as a transit point for freight.”

Meanwhile, companies looking to dive into the Brazilian market need to make the proper preparations, and realize the challenges they’ll face.

“You don’t go into Brazil and set up your own shop without investigating, I would definitely find a partner,” said Marjorie Kean, managing director for Diversified Search.

Beyond partnering with a local firm that's well aware of the culture and how to do business, finding qualified executives to head Brazilian
subsidiaries is becoming increasingly competitive, due to the cost and constant churning of managers.

Internet and smart phone penetration in Brazil, while growing, still lags many countries with comparable sized populations and economies, said U.S. Media Consulting's Bruno Almeida.

“From a senior executive standpoint, what would cost you here in the U.S. $100,000, will probably cost you close to $200,000 or $250,000,” in Brazil, Kean said. “There are many cases where general managers of subsidiaries earn more than the regional head based in the U.S.

“That has caused a lot of ill will and concerns, but that’s not going to change in the near future,” she added.

On top of that, she said, young, bilingual executives with advanced degrees are constantly being headhunted and sometimes jumping to new positions for the pay and prestige before they're ready for the responsibility.

There’s also been a focus on Brazil’s infrastructure. As the government scrambles to finish infrastructure projects ahead of the Olympics and the World Cup Bruno Almeida, chief commercial officer for U.S. Media Consulting, said the country is still lagging in areas like smartphone, Internet and broadband penetration,

“Brazil was ranked the sixth largest country in the world, but when you look at those it’s not six, it’s top 50,” he said. “Internet penetration in Brazil is 40 percent, it’s double in other major markets and smart phone penetration is only nine to 10 percent.”

Lastly the panel looked at some of the higher level challenges facing Brazil, including corruption and government activism in the country’s economy.

Many of the structural changes people are looking for in Brazil, such as improved education and eradicating corruption, may requires decades, said Gene Rostov.

“You have people in government that are poorly paid, it always amazes me that people should be honest when they make a couple hundred dollars a month like a customs inspector who registers millions of dollars of cargo every day,” Rostov said.

Brazil’s President Dilma Rousseff has been fighting corruption since she took office and ousted many of the country’s top ministers in a variety of key departments including transportation and defense. Working these problems out of the system, however, will take more than just a few high profile firings, it will be a generational change.

“I see it as a 20 to 30 year project,” Rostov added. It “take a core of people who prosecute crimes, investigate the crimes and that’s not done overnight, it’s a generational process.

“I think 10 year would be optimistic,” he added.

Pitfalls and promises for Latin America in 2012 say experts from Aon, Florida International University

09 February 2012

The outlook for many Latin American countries in 2012 is positive, experts say, though there are pockets of concern throughout the region.

Among those are many bubbles developing in many countries, the reliance on commodities, a boon or danger depending how you look at it, and the impact of the Eurozone debt crisis on South America, a panel said at WorldCity’s Annual Global Economic Outlook on Jan. 27

Aon's Corina Monaghan (right) said foreign direct investment in Latin America is up, and will continue to grow and power the region in 20120.

On the bright side foreign direct investment is growing since a drop off in 2009, said Corina Monaghan, vice president of Aon Risk Services’ Political Risk Practice. “In 2009 GDP growth in Latin America after the 2008 crisis was 2.1 percent,” she added. “In 2010 GDP growth increased to six percent.

Driving that growth, and making the region attractive for companies from around the world to invest, are “higher commodity prices, reduction of external and an increase of hard currency reserves,” Monaghan said.

Despite the positive signs that continue to come out of the region there are some concerns.

It “used to be that 44 percent of the GDP of Latin America exports were commodities based and now it’s 54 percent and that’s not a good sign,” said Jerry Haar, director of the Pino Global Entrepreneurship Center at Florida International University. Additionally are concerns about potential bubbles forming around the world. In China, Haar said, “China bank lending is nearly $2 trillion. You have a problem not just in China and India, but in Latin America, prices are rising far too quickly.

John Price of Americas Market Intelligence said expansion of credit throughout Latin America will help the middle class and provide opportunities for multinational companies.

In Brazil “the government… is subsidizing home mortgages and credit expansion is proliferating,” he added. Last but not least is worry over the upcoming Olympics, and what will be done with the facilities under construction today.

“After 2012 I would short the Brazilian real,” Haar said.

However John Price, managing director of Americas Market Intelligence, said South America’s reliance on commodities gives him a bullish outlook for the region, as well as the fact that capital markets throughout the region are beginning to ‘grow up.’

“The reason Latin America has always been volatile comes down to this: If you are wealthy enough to save money you put that money outside the region so [it] was and still is chronically undercapitalized,” he said. “Governments have shrunk their deficits tremendously, they’re not crowding out capital markets like they used to.

“It used to be that Latin America didn’t believe in their capital markets, now they do… and they’re beginning to lend to the middle class,” he added. With that lending comes an ever growing numbers of people entering the middle class, and an expanding market for multinationals to tap into.

Though the panel often disagreed about which economic trends are good and bad for Latin America, for the most part the region is expected to grow consistently and to be an attractive place for global companies.

“Multinationals are developing unique products for Latin America,” Haar of FIU said. Many of those multinationals are also the ones funding the majority of research and development going on throughout the region. What will be key to the region’s continued development, is how many people are prepared to fill the increasingly complex jobs that arise as economies grow.

“There’s no public investment in technical training. Capital intensive industries, energy, commodities they require technicians and the publicly funded system doesn’t care them,” said Price. “There are technical colleges from Europe that are going in and building training facilities.”

The next Global Connections forum is scheduled for Feb. 24 and will focus on The Workforce of the Future: Technology, Trends and Challenges.

Mobile workers present companies challenges and opportunities, say executives from Microsoft, Western Union

29 February 2012

Mobile technology is changing the way we work and creating new challenges, from how to build team spirit among dispersed employees to how to protect corporate data on personal devices.

Microsoft's Emre Memecan said workers will become more loyal if they're given some flexibility.

It’s also transforming work spaces, giving rise to “co-working centers” where mobile employees from diverse companies can share while changing the traditional office to become more open and flexible.

Those were among the highlights at WorldCity’s Global Connections on Feb. 24 when four senior executives headlined a panel on “The Future of Work and the Worker.” Many in the audience chimed in, prompting a lively discussion that continued even after the roughly 75-minute event.

“Not everyone is suited to tele-working,” volunteered Sara Baker, human resources manager at Western Union Latin America from the audience. “It depends on the employee, the manager and the job... Some people tend to overwork [from home], and then, they have wear-out syndrome.”

Spurring changes at work are a host of evolving technologies: high-speed Internet phone service, Skype and “cloud” solutions that make it easier for employees to access corporate data on the go and to come together for meetings, often seeing each other over Internet video, said Jay Gumbiner, a director at the high-tech research company IDC Latin America.

The new technologies make it easier to coordinate work across borders. They cut corporate office costs by letting people work from home. But they also have their downsides, especially in building rapport among people who can’t meet in the hallway to chat or can’t share lunch or a drink near the office to hammer out a common problem.

“When you’re working from home, by definition, you’re isolating [yourself],” said Gumbiner.

To counter isolation, co-working centers are springing up worldwide. They let a diverse array of people work side by side, sometimes collaborating with each other. Independent fashion designers, for example, might gather in a co-working space and share drafting boards and sewing machines, said Carolina Rendeiro, chief executive of RightSpace Management and past president of the Global Workspace Association.

Some workers, given the opportunity to work from home, may in fact overwork themselves, said Western Union's Sara Baker.

“You do need collaboration and body warmth around you, but it doesn’t have to be someone from the same company,” Rendeiro said. Co-working centers often are located near a coffee shop, book store and casual restaurant, so that people can move inside and outside the office space to work and bond too.

The new technologies are often hand-held and relatively inexpensive, so that some workplaces now are “BYOD: Bring Your Own device”, said Gumbiner. That creates additional challenges: Is the company liable, for example, if an employee working on their own device sends an inappropriate message to an ex-girlfriend? Or how do you guard corporate data if someone leaves their phone at a restaurant?

Then, there’s the issue of headquarters expecting you to be accessible 24-7, when mobile connections can and do fail. “If you have a cloud solution and you don’t have Internet access, your device is a brick,” said Gumbiner. Internet links often fail, for example, at Guarulhos airport in São Paulo, Brazil.

The flexibility to work anywhere is a top lure for tech-oriented employees at software giant Microsoft, said Emre Memecan, senior human resources manager for Microsoft Latin America. Microsoft management focuses on results from its employees, not on face time at the office.

“People will feel loyal to the company as long as they have flexibility,” said Memecan.

But loyalty may be harder to engender at other companies, participants said. Gone are the days when companies encouraged life-long tenures and employees stayed put to earn a pension and gold watch, said Steve Smith, vice president of real estate company The Hogan Group/Waterford at Blue Lagoon.

“There is no corporate loyalty anymore,” said Smith. “It’s all about the individual.”

One consulting firm in England has found solutions to build team spirit among employees spread out and often working at home, said audience member John Price, managing director in Miami for Americas Market Intelligence. The company invites employees into the office for a serious, business planning session on Mondays. And then, it welcomes them on Fridays starting at 3 p.m. to socialize, converting the office into a fun space, complete with a bar and table football games.

As companies try to squeeze more workers into less space, office buildings' infrastructure is being tested, said Steve Smith of the Hogan Group.

Without face-to-face contact among workers in different departments, companies run the risk of creating communication silos. Working at home may even create silos within the same department, said Lloyd Braithwaite, head of business development from Dale Carnegie Training of South Florida from the audience.

That’s where management skill comes in, responded Microsoft’s Memecan: “At the end of the day, it’s all about managing diversity. If can do that, you don’t create silos.”

For those still laboring in corporate offices, there’s often less space to work than before. Many companies are trying to save on rent and are squeezing in more people per square foot. That’s creating problems finding parking at some buildings built for lower density, said real estate expert Smith.

“The existing infrastructure” at corporate office buildings, Smith said, “is not set up to handle that.”

Protecting personal, business information a key concern in a high-tech Latin America

01 December 2011

As globalization continues to charge forward, the safety of information of all kinds is most at risk both around the world and in Latin America.

Many counterfeit products are made in the same factories as genuine ones, though they're unauthorized, Becker & Poliakoff's Peter Quinter.

A panel of experts described the challenges to protecting personal information, business information and intellectual property at WorldCity’s Global Connection on Nov. 18.

“Twenty years ago there was a growing movement in information technology. Ten years ago there was a growing movement in security,” said Daniel Molina, business development director for emerging Latin America markets for Kaspersky Lab. Today “CEOs come in and say they want their email on their new iPad.

“They want it all and who’s protecting that?” he asked.

With increasing amounts of business information moving online comes more opportunities for it to be accessed, stolen or damaged by outsiders. The chance for that to happen also increases as people increasingly travel abroad for work and pleasure.

“I’ve had my credit card stolen twice,” said Peter Quinter, chair of law firm Becker & Poliakoff’s customs and international trade practice. “It happens every year.”

“When you travel you have to have a couple of credit cards you don’t use,” said Dr. Ronald De Meo, founder of Radiation Shield Technologies, which makes Demron, a compound that protects against nuclear, ballistic, biological and chemical agents. “Someone will hack into your credit card and [the company] will shut your card down” leaving you stranded in a foreign country with no money.

At the same time, credit card hackers can also attack companies’ websites.

“We recently had an issue with our web store where we had $6,000 in service charges,” De Meo added. “Some group tested [stolen] credit cards on our website and they made 10-cent transactions 16,000 times.”

People and companies need to ensure they're taking the necessary steps to protect their data, said Kaspersky Labs' Daniel Molina.

Creating laws and agencies to combat these groups and practices are difficult to develop because hackers can be located in one country, using servers that might be halfway around the world to access the information of some in a nearby country.

Meanwhile, living and doing business in a high-tech world also means that companies’ products can be easily counterfeited, though made in exactly the same way with exactly the same materials as the originals.

“There’s no guarantee that your merchandise is real or genuine,” said Quinter of Becker & Poliakoff. “I’m a factory in China and I have a contract to make 100,000 Blackberrys and say I make another 10,000.

“They’re all genuine, it’s not the authorized supply chain, but they’re still real,” he added.

Up to 10 percent of all the products in the world, Quinter continued, are not genuine. When those types of products arrive in the U.S. they are often seized by customs and the shipper, not the manufacturer who made the goods, is the one who’s penalized.

Stolen credit card numbers are sometimes tested on a eStore, such as the thousands of 10-cent transaction charge to Radiation Shield Technologies, said founder Ron De Meo.

More broadly, panelists raised concern about the stringency of federal agencies when it comes to processing and monitoring cargo shipments.

“When you travel the world and you to talk to people and they talk about their experience arriving in the states just the experience… is not that pleasant,” Quinter said. “Similarly the trade and cargo you’re sending from Germany to Brazil typically would’ve come through Miami, but now that cargo isn’t touching the U.S.

It might be going through “Jamaica, the Bahamas or it might be a straight sale,” he added.

The next Global Connections forum is scheduled for Jan. 27 and will feature WorldCity’s annual global economic outlook for 2012.

Global Connections

Infrastructure, security key concerns in Latin America's mobile technology boom, say executives from SAP, Cisco

Challenges, opportunities abound for companies looking to do business in Brazil

Pitfalls and promises for Latin America in 2012 say experts from Aon, Florida International University

Mobile workers present companies challenges and opportunities, say executives from Microsoft, Western Union

Protecting personal, business information a key concern in a high-tech Latin America

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