Vital Wave Consulting

Field Teams

Latin America
Argentina
Brazil
Chile
Costa Rica
Dominican Republic
Mexico
Peru

Measuring the Economic

Impact of Magellan

Asia
India
China
Cambodia

Eastern Europe
Estonia
Uzbekistan
Ukraine

Africa
Egypt
South Africa
Nigeria
Kenya

Middle East
United Arab Emirates

United States
California (Headquarters)

Intel International eLearning Summit

Porto, Portugal
11 November 2009

Portugal Education & Economic Ecosystem

Before Magellan

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Portugal Education & Economic Ecosystem

After Magellan
The Magellan Impact on Portugal
Over 1,500 jobs created, 30,000 teachers trained, 2.3 billion
in economic activity, 4 million computers exported and a
computer for every primary school child

2009 Vital Wave ConsultingTM

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ICT Investment and Economic Growth

Relationship to GDP and Productivity Growth

% of GDP

As
As nations
nations develop
develop their
their knowledge
knowledge economies
economies to
to attract
attract higher
higher paying
paying jobs
jobs and
and improve
improve
standards
standards of
of living,
living, research
research is
is showing
showing that
that investment
investment in
in ICT
ICT is
is critical
critical to
to improving
improving economic
economic
prospects.
prospects.

AA 2006
2006 OECD
OECD study
study revealed
revealed aa positive
positive correlation
correlation between
between high
high levels
levels of
of investment
investment in
in ICT
ICT and
and
higher
higher economic
economic and
and productivity
productivity growth,
growth, with
with high
high investment
investment countries
countries like
like the
the US,
US, Sweden
Sweden
and
and Finland
Finland showing
showing higher
higher rates
rates of
of both
both than
than nations
nations such
such as
as Portugal,
Portugal, Germany
Germany and
and France.
France.
3

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Economic Benefits to Technology in Education

Technology Education Improves Competitiveness

1
IT
IT education
education investments
investments are
are reflected
reflected in
in international
international
competitiveness
competitiveness rankings,
rankings, such
such as
as the
the World
World Knowledge
Knowledge
Competitiveness
Competitiveness Index,
Index, which
which both
both reflect
reflect and
and influence
influence
global
global executive
executive opinions
opinions

Germany
Hong Kong
Hungary

41.5
110.1
31.0

41.8
111.1
31.2

23
14
26

42.8
113.7
32.0

21
13
24

Iceland
India

366.0
0.1

369.2
0.1

1
33

Ireland
Israel

27.9
78.9

28.2
79.6

Italy
Japan
Korea

94.1
101.6
5.3

95.0
102.5
5.3

44.1
166.6
27.7

0.1
28.9
81.5

29

27
18

25
17

31.6
35.6

17
15
32

97.3
104.9
5.5

16
14
28

63.2
84.8
10.8

2
Global
Global firms
firms increasingly
increasingly consider
consider aa tech-literate
tech-literate workforce
workforce
essential
essential when
when deciding
deciding on
on foreign
foreign investments,
investments, evidenced
evidenced
by
by Intels
Intels review
review of
of Vietnams
Vietnams tech
tech curriculum
curriculum during
during its
its
factory
factory investment
investment process
process

Vietnam

3
Technology
Technology education
education is
is key
key to
to developing
developing homegrown,
homegrown,
world-class
world-class IT
IT companies,
companies, such
such as
as India
India has
has done
done with
with Wipro
Wipro
and
and China
China has
has done
done with
with Huawei
Huawei

China
India

2009 Vital Wave ConsultingTM

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Project Magellan
500,000 Locally-made Netbooks for Portuguese Students
In
In July
July 2008,
2008, Portuguese
Portuguese Prime
Prime Minister
Minister Jose
Jose Socrates
Socrates unveiled
unveiled the
the Magellan
Magellan
PC
PC and
and announced
announced aa deal
deal with
with Intel
Intel to
to purchase
purchase and
and deploy
deploy 500,000
500,000 of
of the
the
locally-built,
locally-built, lightweight
lightweight netbooks
netbooks to
to Portuguese
Portuguese primary
primary school
school students
students

This new collaboration with Intel underscores

Portugal's commitment to advance quickly
toward a knowledge-based economy. By
equipping our schools with state-of-the-art
computing technology and Internet
connectivity, we hope to hasten the transition
to economic models that benefit our citizens."
Prime Minister Jos Socrates

Portugal Prime Minister Jos Socrates and Intel Chairman Craig

Barrett at the launch of the Magellan initiative
Source: The Inquirer

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Moving the Needle to 1:1 e-Learning

Accelerating Portugals Move up the Rankings
Magellan
Magellan is
is part
part of
of aa broader
broader initiative,
initiative, Plano
Plano Tecnologico,
Tecnologico, by
by the
the government
government of
of
Portugal
Portugal to
to catch
catch up
up to
to and
and surpass
surpass its
its fellow
fellow EU
EU members
members in
in technology
technology and
and
Internet
Internet readiness
readiness and
and ultimately
ultimately reach
reach the
the goal
goal of
of aa computer
computer for
for every
every child
child

Student-to-Computer Ratio

Post-secondary e-school initiative

Post-Magellan

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Portugal Education Ecosystem

Education Impact vs. Economic Impact

Beneficiaries/
Thought Leaders

Students
Parents
Teachers
Education Orgs
Thought Leaders

Software/Content
Providers

OS Providers
Content Providers
Application Developers

Hardware Producers

Governments

Training Organizations
Design Centers
Education Program Design

National Gov/MoE
Ministry of
Telecommunications
Local School Systems

Education Impact

Hardware Design
Local OEM/ODM
Distributor
Factory/Parts Suppliers

Service Providers

Telecommunications
Providers

Telecom Companies
Infrastructure Equipment Manufacturers

Economic Impact
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Project Magellan
Direct and Indirect Economic Benefits
Direct Benefits
Project Magellan

Creation of local jobs associated with hardware

and software production and support services
Increased revenues and salaries associated with
job creation
Improvements in physical and Internet
infrastructure
Export increase/improvement in balance of trade

Indirect Benefits
Portugal

Indirect economic activity (e.g., spinoff jobs)

produced by creation of new production and
service jobs
Enhanced ability to attract foreign investment
(e.g., JP S Couto) due to stronger workforce skills
Improvement in international competitiveness
Build up of local IT capabilities and ecosystem
Increased tax revenues

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Creating the Portuguese Silicon Valley

Magellan Gives Boost to Technology Cluster and Jobs

Design/Innovation Center
10% increase in jobs

OEM/ODM
200% increase in jobs

Content Provider
TBD jobs

Mobile Device Software

50 jobs

Hundreds of jobs added to

improve Portugals 9.1%
unemployment rate

Linux OS Software
25% increase in jobs

Braga
IT Integrator/Distributor
Increase in jobs

Maia
Matasinhos
Porto

GPS Device Manufacturer

38 jobs

Chip Manufacturer
770 jobs

Northern
Portugal

Research University
Quantum Chip Lab

Entities directly benefiting

from Magellan

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Exporting Magellan to the World

Portugal as High Value Added Technology Solutions Exporter
Exporting
Exporting the
the Magellan
Magellan model
model of
of
locally-produced
locally-produced hardware
hardware and
and
software
software to
to countries
countries around
around the
the
world
world
Global
Global Sales
Sales
Project
Project Design
Design
Solutions
Solutions Implementation
Implementation

Hardware Expertise
Global Partners
Sugar
Scratch

IT Solutions Expertise

The
The Portuguese
Portuguese Magellan
Magellan initiative
initiative was
was the
the model
model for
for the
the May
May 2009
2009 announcement
announcement by
by the
the
prime
prime minister
minister of
of Spain
Spain for
for aa one-to-one
one-to-one program
program for
for primary
primary students
students that
that will
will also
also involve
involve
job
job creation
creation for
for the
the Spanish
Spanish education
education eco-system
eco-system as
as part
part of
of an
an economic
economic stimulus
stimulus package
package
10

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Moving up the Economic Value Chain

Magellan Transforms JP S Couto into Europes only ODM
Magellans
Magellans manufacturing
manufacturing will
will be
be done
done by
by Portugal
Portugal hardware
hardware company
company JP
JP S
S Couto,
Couto,
transforming
transforming the
the company
company from
from aa networking
networking and
and original
original equipment
equipment manufacturer
manufacturer
into
into Europes
Europes only
only original
original design
design manufacturer,
manufacturer, leveraging
leveraging CEIIA
CEIIA design
design ideas
ideas

2009
OEM

2010
ODM

Abroad

Abroad
Processor manufacture

Processor manufacture
Hardware design
Component design
Motherboard manufacture
Configuration

In Portugal
Hard drive assembly
Final assembly

In Portugal
Increased
Value Added

Hardware design
Motherboard manufacture
Configuration
Hard drive assembly
Final assembly

Manufacturing Jobs
Design Jobs
Intellectual Capital

11

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Direct Economic Impact

Direct Impact Concentrated among Certain Ecosystem Players

Jobs

Revenues

Wages/Salaries

Local
Local
OEM/ODM
OEM/ODM
JP
JP S
S Couto
Couto

Design
Design Center
Center
CEIIA
CEIIA

Software
Software
Provider
Provider
Caixa
Caixa Magica
Magica

+300%

+11%

+25%

+200%

TBD

+25%

+>200%

TBD

+20%

12

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Indirect Economic Benefits

Manufacturing Expansion Leads to Spinoff Jobs and Activity
Recent
Recent studies
studies indicate
indicate that
that each
each new
new manufacturing
manufacturing job
job may
may lead
lead to
to the
the
creation
creation of
of 3.2
3.2 indirect
indirect or
or spinoff
spinoff jobs,
jobs, while
while other
other analyses
analyses show
show that
that the
the each
each
dollar
dollar of
of manufacturing
manufacturing economic
economic activity
activity produces
produces another
another $1.26
$1.26 of
of
intermediate
intermediate economic
economic output,
output, meaning
meaning Magellans
Magellans total
total economic
economic impact
impact will
will be
be
hundreds
hundreds of
of millions
millions of
of euros
euros

Jobs
Total Economic Activity
(based on sales of 5
million units)

Direct
Impact*

Indirect
Impact

Total

350

1,120

1,470

1 billion

1.26 billion

2.26 billion

*Result of manufacturing expansion

13

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Magellan by the Numbers

Impacting Jobs, Skills, and IT Readiness in Portugal
Direct Jobs Created

Total Jobs Created

~350

~1500

Master Teachers Trained

All Teachers Trained

850

30,000

Direct Economic Activity*

Total Economic Activity*

1 billion

2.3 billion

Units Manufactured*

Units Exported*

5 million

4 million
*Total through 2010
14

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Interview Notes