Latin America is rapidly developing into a hub for innovation and source of tech talent, as companies and governments increasingly turn to the global market to secure skilled workers at competitive rates.
With IT workers sometimes hard to come by, and prices at home often high, a growing number of North America and European companies are looking to the region to find the support they need.
That tendency has only accelerated in the context of the global pandemic, with companies and governments offering an expanding range of services online, and the process of digitization becoming an even bigger priority.
That shift means demand for jobs in the ICT sector keeps growing, while finding and retaining tech talent can sometimes be difficult, making the growing pool of IT professionals in Latin America all the more interesting to companies overseas.
If retaining talent is an issue, hiring staff in Latin America is an option
The developing interest in tech workers in Latin America seen in recent years has dovetailed with another investment phenomenon in the region – namely an increasing interest in “nearshoring,” whereby companies based in the United States and Europe move production and value chains from Asia to Latin America.
That trend has also amplified the interest in the human capital to be found in Latin America, with Periklis Venakis, chief technology officer at education technology (EdTech) company Epignosis, highlighting the opportunities for finding talent in lesser-trodden markets.
“HR executives should focus on reaching out to people working in geographically dispersed areas that were unreachable up until recently. By providing flexible working conditions, they can more easily hire and keep new IT staff.” he said.
The region is home to a fast growing number of IT professionals. As of 2018, Brazil had over 475,000 highly skilled software developers, while 340,000 could be found in Colombia and 114,000 in Argentina.
That is in part because universities and other educational institutions throughout the region are expanding the opportunities on offer to study IT-related disciplines, causing the technology sector in the region to show growth.
In Colombia alone, around 13.000 highly skilled IT/software professionals graduate each year.
Social and economic reasons to seek for workers in Latin America
There are other social and economic reasons that can make entrepreneurs and companies turn their eyes to Latin America.
When starting to operate in a different country, there are always doubts about the language and culture. However, levels of English proficiency in many countries in the region have been on the rise.
Another factor facilitating easy communication with local professionals, particularly for companies based in the United States, is that of similar time zones, with the time difference between the US west coast and eastern coast of Brazil just five hours.
With that being the biggest difference between the continental United Statesand mainland Latin America, in most cases IT workers in the region are only a couple of hours ahead or behind those US companies who have hired them.
Additionally, multiple Latin American countries have installed tax exemptions for the software/IT industry in order to make it even more attractive to nearshore a part of business operations.
Technology centers have also become increasingly popular, helping to develop local innovation economies and retaining some of the best talent in those markets.
Where those tech hubs have expanded significantly, they have often earned the label of new ‘Silicon Valleys,’ with multiple examples to be found in Latin America.
Importantly, local governments have been working hard to support these hubs, as understanding about their ability to promote growth and increase investment has become better understood.
Of course, these tech centers are still dwarfed by the original Silicon Valley in California, which is still the global epicenter for innovation, generating an estimated at $275 billion dollars a year.
While nowhere in Latin America yet comes close to those sorts of numbers,the likes of Guadalajara (Mexico), Cordoba (Argentina), Santiago (Chile), Salvador de Bahia (Brazil), and Medellin (Colombia) are just a few of the tech hubs that are increasingly recognized for their innovation sectors and the skilled talent they attract.
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*Douwe Westerveld contributed to this article.