The common technology narrative about both Latin America and Africa at the turn of the 21st century was the same. Experts opined about how both regions were well behind the rest of the world with dim prospects for catching up. While many problems remain, Latin America is quickly catching up to the rest of the world. In fact, Latin America is currently undergoing a technology boom unlike anything they have seen in the past.
Consider Germany’s GFT. The technology consulting company purchased a Brazil business process management firm last year. They are now in the process of recruiting more than 100 people from Latin America to be transferred to one of their Spanish operations set up to provide nearshore software development services for Europe. GFT hopes that 50 of those people will come from Brazil while the remaining will be hired from Mexico and Costa Rica.
Here in the States, Austin-based iTexico offers nearshore software development services through its partner in Mexico. The company has had operations in Guadalajara for a while now, providing clients an extended teams as a service (eTaaS) option for as-needed software development.
So why is Latin America such a hotbed for technology hiring and entrepreneurship? There are five things to consider:
1. Strong Economic Growth
Parts of Latin America are still struggling economically, but there are some very strong economies in Mexico, Brazil, and Chile. Brazil enjoys the world’s ninth largest economy; Mexico comes in at number 15. In addition, economic freedom has been widely embraced across most of Latin America as a means of encouraging the region’s competitiveness. Governments are taking the economic chains off and allowing entrepreneurs to do what they do best.
2. A Highly Competitive Environment
It is a generally accepted business principle that competition is good. Competition breeds innovation, quality, fair pricing, and customer satisfaction. Latin America is emerging as a hotbed for nearshore software development and other tech-based businesses because national governments are now encouraging competitiveness. Latin America is now more competitive than it has ever been before.
3. Global Integration
Latin American countries like Chile, Brazil, and Argentina have made the point of becoming globally integrated over the last decade. Mexico has had a comprehensive integration policy in place for more than 20 years. Given that technology is no longer isolated in specific countries or regions, global integration is a necessity for modern business.
4. Tax Friendly Environments
Taxes are always a big question when it comes to business development. Thankfully, Latin America is quickly coming around to the reality that a positive tax environment encourages business while a negative one chases business away. The strongest Latin American economies keep taxation to a minimum by, among other things, entering into international agreements to avoid double taxation.
5. Strong Technology Workforce
Finally, the technology sector is second only to healthcare in terms of job growth. The fast pace at which technology is advancing requires a constant influx of new workers with the knowledge and skills to further innovation and deploy and maintain infrastructure.
Mexico started developing its technology workforce at the turnofthecentury thanks to a forward-thinking vision that saw how important such a workforce would be. Other Latin American countries have learned from their example; countries like Brazil, Chile, Costa Rica, and Argentina. Nearshore software development is one particular area of technology employment that is benefiting tremendously from it.
Latin America is indeed undergoing a technology boom. Not only is that good for Latin American countries and economies but it is good for the rest of the world as well.
