One of the issues that I’ve heard over and over again from buyers of services in Latin America is that there are not enough skilled workers. But we need to draw an important distinction here – it’s not the quality of tech workers that’s lacking, but the quantity. Latin America on average has very capable software developers and engineers, usually on the same level as those in India. Where the region loses out, especially in the IT sector, is when tech companies try to scale up their operations. While India has armies of talented workers, most Latin American countries cannot sustain very labor intensive IT projects. So the challenge is, how to increase the number of IT workers before Latin America loses the strong outsourcing reputation it has gained in recent years. Today we’ll take a look at how three Nearshore governments have approached this dilemma:
Brazil – Many in the industry hope that new president Dilma Rousseff will work to increase Brazil’s share of skilled IT workers. The Ministry of Development has the goal of training over 300,000 IT engineers over the next years. While that may seem incredibly ambitious, it’s clear that only with an increase of that scale can Brazil have a shot at being one of the world ITO leaders. The country is notorious for having a huge number of tech workers, but all at quite a basic level. Large cities like Sao Paulo and Rio in which firms can find higher level workers, are quickly becoming crowded. Meanwhile, there are shining stars like Curitiba that are considered one of the most IT-friendly places in Latin America to do business, both for the world class infrastructure as well as the extremely talented workforce.
Mexico – Reputed for having an extremely skilled and quite large labor pool, Mexico’s problem is rising costs. Whether that’s due to the continuing drug violence, or the rising salaries of the tech workers there, it’s definitely an issue for US firms considering the location. However Mexican IT continues to grow strongly – last year the country exported close to $3.5 billion in services, with 85% of it going to the US. However while the government has rolled out aggressive incentives to attract firms, the focus on educating the public has been generally lacking.
Chile – This Southern Cone country boasts among the most qualified and educated labor pools in all of Latin America, and has even made a name for itself in R&D and certain IT niche services because of the level of talent available. However the problems are twofold – small population, and extremely low English proficiency. Apparently only about 4% of the people are fluent in English. But the country’s investment promo agency CORFO has been exemplary in addressing the issue. By creating a National Register of English Speakers that all have some form of higher education, Chile provides easy access to companies looking to find qualified workers.
In my next post we’ll look at how three more LatAm countries have approached the education dilemma. Stay tuned!