Although regions like Asia and Eastern Europe have the hegemony 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): Regional Economic Outlook about Latin America and the Caribbean. Since 2004 the entire region has been experiencing an average economical growth of 4% according to the IMF. For instance in 2013 countries like Peru had a growth of 10% and Bolivia of 5%, both were above the average. Although the Asian economies have a higher growth rate (~6% India 2013) it’s definitely a milestone for South America to have achieved that economical growth and stability in the last decade.
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. The most important improvements, which have direct influence in the IT industry, are:
- Governments sponsored study abroad scholarship programs that includes IT graduate and postgraduate programs.
- The changing landscape of US universities’ and corporations’ investment in Latin America
- Trends in academic mobility and its outcomes for brain drain and gain
- Recent development of U.S. government exchange programs with Latin America
A stable growing economic along with advanced 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. However there is one more reason why Latin America outstands from these 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 offshore.
The good thing for the Global Market is that there are new alternatives when we are talking about technology providers. This momentum Latin and South America is going through contributed to improve not only the Education but also to the Information Technology (IT) industry in the region.
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 if we can either help you or point you in the right direct direction. Please feel free to contact us for a free consultation.