How South America became a hub for software

Latin America is no longer on its way to becoming a top outsourcing destination for software development. It already is a full-fledged player in the industry, with many businesses in the United States and countries around the world seeking out talent in the region. With competitive prices, highly-skilled developers, and fast and efficient project turnaround times, it’s no wonder so many businesses outsource to South America and Latin America in general.

How did the region become such a successful hub for software development? Many factors contribute to its growth, from top-notch education systems to diversity initiatives. Let’s take a look at just some of the most influential drivers.

Economic growth

In the past several decades, the region has experienced economic growth, bringing many citizens into the high-middle-income bracket. Countries including Argentina, Brazil, Chile, Peru, and several others have a gross domestic product (GDP) per capita of more than $13,000 USD, indicating strong economies. This economic growth means that the countries are able to invest more in education and other areas that aid their citizens and boost skills in the region, creating more talent.

Education

Speaking of education, it’s one of the main reasons why so many skilled software developers exist in Latin America today. Many countries in the region are investing heavily in education. Argentina, for example, offers free public university. Many international students flock to the country to take advantage of its stellar education, often enrolling at the University of Buenos Aires. A large portion of these students major in STEM disciplines (science, technology, engineering, and medicine) and pursue careers in related fields.

Argentina isn’t the only country that’s increasing talent through education. STEM México is a new initiative, launched in September 2018, aimed at training Mexican teachers to improve engagement in science and math curricula early on. Modeled after STEM Brasil, the program equips teachers with skills to help students learn how to collaborate and solve problems related to physics, chemistry, biology, and mathematics. 

With more government investment in education, these countries are better arming their populations with essential technology skills, making Latin America an ideal outsourcing destination. 

Startup culture

Which came first: the chicken or the egg? In other words, did the talent in the region give rise to an increase in the number of startups, or did the startup culture mean that citizens saw the technology boom and sought to learn new skills? Either way, startups are cropping up everywhere. For many businesses in the U.S. and other countries, these organizations are ideal outsourcing partners. 

The Chilean government, for example, sought to attract entrepreneurs to the country with the accelerator program Start-Up Chile. The program was introduced in 2010 and had given $40 million to 1,300 startups as of 2016. Other countries and territories have introduced similar initiatives, such as Argentina’s IncuBAte and Puerto Rico’s Parallel18. Mexico’s Mexico City and Guadalajara have become major tech hubs, housing plenty of talent and giving rise to job opportunities and startups as well. 

Diversity initiatives

One important reason why businesses in other countries choose to outsource to Latin America is because they’re looking to gain a new perspective on their products. Many countries in the region are looking to attract diverse backgrounds and skillsets to the tech industry, contributing to the rich landscape of diverse talent and opinions.

For example, given that women are underrepresented in these disciplines, Laboratoria aims to educate women in STEM topics and fields across several Latin American countries, including Brazil, Chile, Mexico, and Peru. The program’s founder, Mariana Costa Checa, writes that as of September 2019, they have trained more than 1,300 women and placed many of them in highly lucrative jobs since its establishment.

It’s clear that Latin America is a region worth considering if you’re in the market for software development services. Economic growth, world-class education, an expanding startup culture, and plenty of diversity initiatives have all contributed to the region’s identity as a tech outsourcing hub for the U.S. — and the world in general. If you’re thinking of contracting third-party providers, Latin America is one of the first places you should look.