Why LATAM is the Best Alternative to IT Outsourcing?
Although regions like Asia and Eastern Europe have been preferred in IT Software Outsourcing for the latest decades there are new trends in global economy and technology that qualifies Latin America as the new emerging region to outsource software IT projects.
The Latin and South American economies were afflicted with external debt, hyperinflation and unemployment during the 80’s and 90’s. But those days are now gone according to the International Monetary Found (IMF): Western Hemisphere Regional Economic Outlook. Since 2004 the entire region has been experiencing an average economical growth of 4% according to the IMF. For instance, in 2021 countries like Bolivia had a growth of 6.1% according to the world bank. Although the Asian economies have a higher growth rate (~8% India 2021) it’s definitely a milestone for South America to have achieved that economic growth and stability in the last 20 years.
The Education is another area that has developed significantly in Latin America in the last decade. According to the book: Latin America's New Knowledge Economy several improvements contributed to better higher education which is directly proportional to advanced workforce and qualified human resources. For instance the illiterate rate in Bolivia has been increased from 79.99% in 1992 to 93.85% in 2020. The most important improvements, which have direct influence in the IT industry, are:
A stable growing economic along with experienced IT workforce are compelling reasons to look at Latin America as a potential location that can provide talented software engineers in a similar way than India or Ukraine. Moreover, there is one more reason why Latin America outstands from these eastern regions and is the time zone difference. Known as Nearshore Outsourcing. The model that allows software companies in North America to work on the same time zone with their offshore teams is probably the most important reason why Latin America is becoming more and more popular for software IT and software development.
The good thing for the Global Market is that there are new alternatives when we are talking about technology providers. At this moment Latin and South America are contributing to improve not only the Education but also to the Information Technology (IT) industry in the world.
As any other niche the best opportunities will be for those who put their eyes in Latin America first. It might be challenging to select the right location in Latin America since it’s composed by more than 20 countries: Argentina, Bolivia, Chile, Colombia, Costa Rica, etc. and every country has its own nuances. Fortunately, TRUEXTEND is an expert in Nearshore Outsourcing and staff augmentation, we can certainly help you with your staffing and engineering needs. Please feel free to contact us for a free consultation.