Latin America Software Development – Software development is a long-standing trend in the IT industry. While many companies have taken the well-trodden route of moving their operations to India or China, others are looking a little closer for talent.
In recent years, some South American countries have tried to be considered a serious IT center by building and expanding technological infrastructure, promoting computer education, encouraging business and supporting start-up activities. This has allowed Latin America to increase its influence on the global technology scene and become a top outsourcing destination for Western companies.
Latin America Software Development
This article provides an overview of the region’s technology ecosystem, as well as an overview of the most popular technology destinations, so you can assess their potential for outsourcing partnerships.
Software Development In Latin America: A Complete Guide
Latin America has been recognized by American and Canadian technology companies as the best place for software development. Many North American companies choose the region as a prime destination for specialized IT services because of its proximity to travel, highly skilled talent, favorable business environment and cultural similarities. Let’s take a closer look at the benefits of the region:
With a growing talent shortage, many US companies struggle to find experienced technology professionals in-house and often look outside their borders to meet their IT needs. With nearly 1 million developers, Latin America is absolutely brimming with talent.
The region’s talent pool consists of software engineering graduates, bootcamp graduates and coding academy participants. Thanks to its diverse technological education system, LatAm is full of technical professionals who are proficient in multiple programming languages and ready to take on any technical challenge.
In addition, independent and government programs encourage technology organizations and companies to hire interns. Thus, local students can have up to five years of business experience by the time they graduate. Such diversified skills training enables LatAm engineers to master all aspects of the software development process and provide a wide range of services to clients.
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Latin America is gaining popularity as a robust technology hub that supports innovation and entrepreneurial endeavors. According to the “Doing Business 2020” report, the average indicator of the economic indicators and regulatory environment of the region is 59.1, with Mexico leading with 72.4 points.
Latin America’s supportive business environment, financial attractiveness and digital flexibility are the main reasons why more and more companies are turning to the region for their outsourcing needs. According to the Kearney Global Services Location Index (GLSI), the most promising countries are:
Many LatAm countries have also improved their tax systems to create a positive offshore environment. These initiatives not only provided tax benefits to international companies, but also created the conditions for the free flow of foreign money.
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A growing number of global companies recognize the lucrative incentives the region offers and are turning to South America as a primary location for outsourcing technology operations. Tech giants already making the switch include Amazon, Microsoft, Intel, Netflix and Github.
A favorable business environment and an abundance of highly skilled labor encouraged LatAm startups. The region’s thriving tech ecosystem has grown from 2 to nearly 50 unicorns in less than five years. Regarding the breeding of unicorns, Brazil is the undisputed leader (60% of companies), followed by Mexico (17%) and Argentina (11%).
Apart from the current unicorns, Latin America has almost 100 startups valued at more than $100 million. With more capital every year, Latin countries are the fastest growing venture capital region in the world. The number of tech startups in the region has grown nearly sixfold in recent years, from $38 billion to $216 billion.
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The region’s startup ecosystem spans many verticals, from food technology to home delivery, highlighting fintech as a leader. LatAm has 13 unicorn companies in the financial sector, including Brazil
The world’s largest digital bank outside of Asia, Argentina’s mobile application for managing personal finances
Time zone difference is usually not considered when it comes to software development outsourcing. However, this is an important factor for smooth and continuous communication, quick resolution of emerging problems, and increased speed in the development and testing phases.
Latin American countries have a relatively small time zone difference compared to the US, which means you can visit or contact the team to discuss project details during normal business hours. It enables IT staff to create productive workflows and facilitates real-time collaboration between internal and remote development units.
Latam Is Now A Leader In Software Development
Software development is nothing new in Mexico. The country has a long history as a leading destination for North American companies, especially those specializing in telecommunications, fintech, and consumer products and services.
Mexico attracts international tech giants with its strong language skills, 770,000 talent pool, time zone overlap, affordable costs and technological capabilities. According to Coursera’s analysis of students, Mexicans score 53% in technology and 41% in data science. They are particularly skilled in cloud computing (91%), web development (86%), mobile development (66%) and software development (55%).
The country is well on its way to keeping up with the increasing demand for a skilled IT workforce. Various programs have been launched to attract students to IT programs for higher education. This creates a strong influx of qualified graduates, with nearly 114,000 aspiring software engineering professionals entering the market each year.
The country is highly regarded by the global tech community for its impressive track record of local developers. According to the latest ranking of SkillValue, Mexico ranks 2nd in the world for technological skills. The country is also ranked 33rd on HackerRankleaderboard and 63rd on TopCoder’s list of top coding challenges.
Perficient Latin America Ranked As A Top Developer For Latin America, .net And Java / Blogs / Perficient
In addition to its excellent development experience, Mexico is also proud of its IT outsourcing hotspots. The capital, Mexico City, is home to a talent pool of approximately 225,000 professionals and an innovative network of 385 tech startups, making it the country’s largest tech hub.
Guadalajara is another fast-growing metropolis known for its deep tech infrastructure and growing professional software vendors. The city is the gateway for many international companies that want to enter the outsourcing market of the region. World-renowned technology giants such as Oracle, Intel, HP and IBM all have large R&D and programming facilities in Guadalajara, demonstrating their technological prowess.
Argentina is a nearby star whose popularity has grown since the dot-com boom. The country’s deep-rooted engineering culture and rich business experience with Western countries make it one of the best software outsourcing destinations in the world. With more than 15,000 local professionals serving offshore markets, this LatAm technology powerhouse has managed to win over the global community to its home-grown talent.
What makes Argentine outsourcing so attractive is the state support. The government often enacts laws to maintain a favorable economic environment and increase the interest of international companies.
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These efforts have already paid off. In 2021, the country’s ICT market revenue was $10.1 billion. According to forecasts, the total value creation opportunities of the sector will reach $64.6 billion in the next five years.
The government also provides sufficient funds and resources for establishing and further developing computer education in all school programs. Thanks to these initiatives, Argentina can attract 135,000 skilled professionals in software and mobile application development, cloud computing, data science and DevOps.
Argentinians also have the highest English proficiency in Latin America. This greatly facilitates communication and cooperation with Western partners, giving them a significant strategic advantage by increasing their competitiveness in the regional technology scene.
Brazil is no stranger to the global tech community. The country is currently ranked 5th in the Kearney GSLI. The ranking assesses the ability of countries to provide high-quality services by tracking their scores in the categories of financial attractiveness, people skills and accessibility, business environment and new digital resonance.
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On the downside, average developer fees are higher than in other countries in the region, ranging from $25 to $80 per hour. Despite the higher price, outsourcing to Brazil is still a bargain compared to hiring in-house developers. Moving IT operations to this LatAm site can save North American companies 40-60% on development costs.
In 2022, Brazil exported approximately $3.9 billion in software outsourcing, web hosting and information services. Although the country’s technology sector is relatively small, it has grown tremendously in recent years. Foreign investment in Brazilian startups has more than doubled since 2016. The total amount of venture capital invested in the country’s technology ecosystem is currently more than $3.5 billion.
Sao Paolo alone has attracted more start-up investment than Chile, Colombia, Argentina and Mexico combined, and is quickly gaining a reputation as the region’s biggest tech hotspot. It is currently ranked 6th in the Tholonskglobal network of digital centers.
Other important IT centers: Rio de Janeiro, Salvator and Florianópolis. Finally, universities, research institutes,
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