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Argentina


·Total Workforce Size: 16.8 million

·English Proficiency: Moderate

·GNI Per Capita: $7,160

·S&P’s Currency Risk Rating: B

·Regional Wage Savings Rank: 2 / 19

·Cultural Compatibility Rank: 1 / 19

·Technological Readiness: 11 / 19

·Ease of Doing Business Rank: 115 / 183

· Economist’s 2010 Democracy Index: 51 / 167 (Flawed Democracy)

·AT Kearney Global Services Index: 30 / 50

·Selected as one of 8 LATAM countries to make the Gartner Top 30 Offshore Services Destinations


Argentina has an excellent skilled workforce with highly qualified staff.  The country offers free education at public universities and has the largest number of public universities in Latin America, ranking eighth globally.  Arguably, the country has the best telecommunication infrastructure, and its current focus around software development and technical call centers is proving successful.  The 2002 peso devaluation makes it very cost-effective to do business.  Argentina is a tech-hub, attracting large companies including Cisco, America Online, and Google, and its data protection standards have been synchronized with EU legislation.   Argentina offers stronger English language skills than many of the other LATAM countries, but growth of 3rd-party services may be inhibited by skills shortages in key software development and networking areas. 



Government Support for Tech in Argentina Benefits Nearshore Outsourcing

by Nancy Medica on 01/02/12

In the past eight years, Argentina has seen remarkable growth in technology services. According to Argentinean census data, since 2002 domestic sales of IT and software services have increased by nearly 18 percent a year, and exports have increased by almost 24 percent per year. The government recognizes this growth and is working to support it, which will be a great benefit to nearshore outsourcing in the near future.

Promoting Education to Drive the IT Industry

Driving higher education is a large part of ensuring that this upward trend continues. Although education is an important part of Argentinean career paths, a surprising number of college students never finish their degrees because many students enter the workforce before completing their course studies. Despite the fact that these students still gain the necessary work experience, the lack of a degree is detrimental to Argentina because it pushes down graduation rates for the country overall.
To turn that trend around, Argentina’s government has started offering scholarships and tax incentives to students so that they complete their graduate degrees instead of entering the workforce early. The University of Buenos Aires allows undergraduates to complete their degrees free of charge, but they do require tuition fees for the graduate level; so the government’s help will go a long way towards helping poorer students. In the long run, it will increase Argentina’s graduation rates, as well as bolster their workforce with more professional-level graduates, many of whom will go on to work in the tech field.

Argentinean Government Regulations Support IT Growth

Incentives are also being offered to businesses in order to support this budding IT industry. In 2004, two pieces of legislation were introduced at the federal level to promote the design, creation, development, and implementation of software systems by offering tax exemptions and fiscal credit for federal taxes to companies that specialize in software services. This will allow technology companies to develop faster, thus helping the IT industry to better establish itself in Argentina.

Benefit to Nearshore Outsourcing

As a result of the Argentinean government’s efforts to improve graduation rates, outsourcing to Argentina will become even more beneficial to software companies than it is already. Staff on outsourced teams will be even better educated, and more companies will offer nearshore outsourcing opportunities for American software developers. After all, the better the tech industry is in an outsourced country, the better the software that they’ll produce.

"Random Hacks of Kindness" in Latin America

Random Hacks of Kindness,  a global community of computer experts that develop practial open technology for social good, is now partnering with Fundación Ciudadano Inteligente  (The Smart Citizen Foundation) to support their efforts in Latin America.  
Based in Santiago, Chile, Fundación Ciudadano Inteligente was founded with the goal to promote transparency.  FCI encourages citizens to utilize information and communication technologies to join the organization's cause and networks with organizations that work in themes of transparency, technology, and social good throughout Latin America.
Random Hacks of Kindness has been responsible for sharing open-source technologies mostly related to water management: flood warning systems,  supply-demand water planning, maximized utilization of non-potable water for crop irrigation systems, ect.  In one particular project, these technological tools are meeting the tangible needs of the citizens of Peru.

In Peru, water resources management is a major issue.  Over 98% of the country's annual renewable water resources is available east of the Andes Mountains, in the Amazon region.  This leaves the coastal area of Peru, home to most of the major Peruvian economic activity and half of the country's population, with less than 1.8% of the national freshwater renewable resources.  RHoK is working to create a crowdsourced bank of hydrology maps online that will enable more efficient water usage and planning, thus stopping the increasing toll that economic and population growth take on the inaccessible water resources.  
The Developing Latin America event will bring together developers, designers, and members of civil society from 6 Latin American countries to find innovative technological solutions for the social good of their country and region. All 6 event locations will participate in the upcoming RHoK Global December 2011 event where they will have an opportunity to collaborate with peers around the world.
Solutions in Latin America: 

The sharing of open source technologies like the ones being utilized by RHoK and FCI offer the promise of rapid development in these areas for the true benefit of society, allowing people's needs for water to be met more efficiently.


Ci&T Opens New Delivery Center in Argentina

"Ci&T, a technology outsourcing and software product engineering company, announced on August 31 that it is expanding its support for its United States customers with a new delivery center in Argentina. The new center, which is expected to grow to 1,000 employees in the next five years, will serve Ci&T's U.S. clients and furthers the company's mission to provide geographically convenient Nearshore services to its customers.

Ci&T's new Nearshore delivery center will enable the company to produce projects for its U.S. clients with even greater agility and speed. Because of its near-local proximity and time zone, clients in the U.S. can access the center's developers within the span of their normal workday, without having to make after-hours calls to their development team. Ci&T's established Agile and Lean culture ensures that the developers are equipped to make on-the-fly changes with just a phone call, while clients can approve projects, deliver new specifications and address any issues with requirements in minutes -- not hours."

Read it here at Market Watch


Brazil Industry Losing Out to Lower-Cost 
Mercosur Members

Brazilian industry leaders are complaining that the strong growth of the Brazilian economy and the Super Real are acting as a disincentive to Brazilian investment.  Brazilian companies are turning instead to less expensive options like Argentina, Paraguay, and Uruguay.

With the Super Real, manufacturing in Brazil has become very expensive and Mercosur partners offer comparative advantages: Paraguay, cheap energy; Argentina, natural gas at competitive prices and Uruguay qualified labor.  On top of this, the total cost of taxes is significantly higher in Brazil compared to other Mercosur members.


Bogotá Losing Competitiveness in IT Industry


Due to the recent lack of investment in the IT sector, Bogotá is no longer as competitive as other cities in Latin America.  Colombia's ICT minister, Diego Molano, said that the city has dropped from 5th place to 9th in competitveness among Colombian cities alone, and this lack of competitiveness has caused the Bogotá's internet penetration rate to drop to 12.78%.  Colombia as a whole demonstrates a weakness in internet penetration.  To compare, internet penetration is 63.5% in Buenos Aires, Argentina, 48% in Santiago, Chile, and 29% in Lima, Peru.  Molano calls for increased IT investment, which will in turn increase competitveness, create jobs, and reduce poverty.



Argentina Set Back over Bond Default


Argentina suffered a setback over its $100 billion bond default in 2001 when the New York State Court of Appeals ruled that the interest from the defaulted bonds will still be owed.  The court also ruled that the interest rates could reasonably be set at 101% annually given the country's default history and need for capital.  

To make matters worse, the UK Supreme Court ruled earlier that Argentina doesn't have debt immunity in Britain and that Argentina's state immunity won't prevent an offshore trade from using British courts to enforce claims over the 2001 default.  The decision reverses a ruling from last year and permits an affiliate of Elliot Associates LP to seivze Argentina's assets in Britain using a $284 million US court judgement.As shown by the graph below, Argentina's economy bounced back rather quickly from the default, but the country is still paying for the economic disaster a decade later.


Ankur Prakash Discusses TCS Latin America


As part of the Thought Leaders in Cloud Computing Series, Ankur Prakash, VP and COO of Tata Consulting Services Latin America, gives insight into the Latin American outsourcing market. To give a background on TCS Latin America, they began operations in Mexico City in 2003, and have since expanded into Ecuador, Colombia, Peru, Chile, Argentina. Brazil, and Uruguay.  

Prakash gives his take on the talent in Latin America, the strategy behind seeking first tier cities, and recruiting from the Latin American labor pool.  When asked about the cost advantage of the region, he replied, "As for the Latin American cost advantage, cost arbitrage, I don’t think that any company that works just on cost arbitrage in Latin America can provide any kind of value additional and advantage to local customers."  He also explains that because of the vastly different economies that exist in the region, it is difficult to generalize on cost savings.  Indeed, companies will find most regional generalizations unhelpful when examining Latin America.

Chile Invests in IT Future


IT spending was at $2 billion last year and is projected to increase to $3.4 billion by 2014.  Their IT growth of 5.7% makes them the LATAM leader, ahead of Argentina at 4.7% and Brazil at 4.5%.  Students are choosing tech careers over business careers, with majors in electric engineering, software studies, and computer science.















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