“Latin America Redefines Outsourcing, Emerging As A Critical Player In IT,” reads a 2011 headline in Business Insider. It couldn’t have been more prescient. Not only is Latin America software outsourcing on the rise, but the region has become a global hotspot for technology services.
Businesses around the world, especially in the United States, turn to South America software development services for their needs, from creating apps and websites to building robust information technology and cybersecurity systems.
What’s driving growth in Latin America software outsourcing services? In some ways, it’s a bit of a chicken-or-the-egg scenario, but the below factors are certainly playing a role in the enormous expansion of the region’s role in the global technology landscape.
Latin America is investing in a technologically-skilled workforce
Recognizing the potential technology has to boost their economies, many countries are pioneering initiatives to create and augment a tech-savvy workforce. For example, Argentina, which already offers free public higher education to its citizens, invested $5 million in Program.AR, which trains teachers and public schools to implement IT education into their curricula. The program launched in 2015.
Meanwhile, Nicaragua, a country that has not typically been associated with the technology sector, has been steadily climbing the ranks as a destination for Latin America software development services. This rise may be in part due to the government’s efforts to introduce more technology and English into Nicaraguan schools.
Mexico, likewise, established the Bilateral Forum on Higher Education, Innovation and Research (Foro Bilateral sobre Educación Superior, Innovación e Investigación) in 2014 to promote and improve educational access and opportunities in science, technology, engineering, and math (STEM) areas. Through the Forum, higher education institutions and research programs in Mexico and the U.S. collaborate to provide training and more to Mexican students. This is just one initiative that has made Mexico a premier destination for Latin America outsourcing.
The volume of Latin America software development sites is expanding
When other countries began to outsource software to Latin America, they had just a few choices. Early competitors in the technology landscape in the region included Brazil, Chile, and Argentina. These countries remain top South America software development destinations today.
However, they’re not alone. Excel SoftSources named Peru “the rising star of outsourcing in the Americas,” noting it’s economic growth and expansion in educational funding and opportunities. Given its proximity to the mainland U.S. and cultural and language overlap, Puerto Rico is another top choice for Latin America software outsourcing services.
Colombia has also seen an upward trend in the number of students electing to study software development, IT, and related fields in the past several years.
These, of course, are just a few of the countries in the region that demonstrate tremendous growth in talent and the availability of technology services.
Other countries are taking note of the benefits of Latin American outsourcing
We’ve noted various educational initiatives and investments several countries in Latin America are making to increase the talent pool in the technology sector. In fact, the region is an attractive destination for software outsourcing for a number of reasons. For example:
• There are fewer language and cultural barriers with the U.S. compared with offshore destinations like India and China. Many Latin American citizens speak English fluently, and thanks to their proximity to the U.S., they bear significant cultural overlap.
• Time zones are the same or similar, meaning work schedules overlap significantly. This facilitates better communication and collaboration because businesses can ask questions and discuss issues in real-time.
• Nearshore outsourcing is generally significantly less expensive than onshore outsourcing or in-house labor, largely due to developing economies in Latin America. Businesses in the U.S. can save on costs while achieving high-quality results given the abundance of talented professionals in the region who offer lower rates than their U.S. competitors.
In the coming years and even months, we’re likely to see Latin America software outsourcing grow as an industry even more. As governments recognize the impact of these services on their economies, they will continue to invest in STEM-related education and training for their citizens.
Businesses in the U.S. and other countries are increasingly coming to regard the region as an area with talented, well-educated workers who produce exceptional products at a cost-effective price as well. These and other factors will continue to solidify Latin America as a top global software development hotspot.