This is the third article in a series about the technology sector in Latin American markets. Last month, we looked at Argentina. This month, we explore the technology markets of Chile and Colombia.

CHILE

If you track technology industries in world markets like I do, then Chile should be a country on your tracking list. Chile has prospered from a series of stable, business-friendly presidents. The country has done well in mining and agriculture. Chile certainly looks to Silicon Valley as a high-tech model, but just as importantly took a page from the Israeli and Canadian governments’ playbooks: supportive infrastructure development and substantial grants for start-up technology companies.

One such organization with practical initiatives to attract entrepreneurs is ‘Start-Up Chile’ (SUP) offering different types of grants to promising start-ups. Recently, the BBC introduced its online readers to the entrepreneur, George Cadena from California. The pivotal part of the story was the fact that Cadena had waved goodbye to Silicon Valley to set up his solar panel start-up in Chile. Mr. Cadena received a $40,000 grant from SUP. A few years ago, I was fortunate enough to meet one of the founders of Start-Up Chile. He had studied technology start-up incubation and had a firm grasp on what it would take to turn Chile into Latin America’s own version of Silicon Valley. It would seem that his plans are well on their way.

Another key Chilean program is CONICYT. This agency focuses on science and technology and is a pillar of Chile’s national innovation for competitiveness program. CONICYT supports seven centers of excellence:

  • biomedicine
  • material sciences
  • applied mathematics
  • astrophysics
  • environment and biodiversity
  • oceanography research
  • molecular cell studies

Chile and the rest of South America are poised for high economic growth in the next several years. According to the United Nations, Chile received a record high US$17.299 billion in foreign direct investment in 2011. In contrast, the United States’ share of world FDI continues to drop.[i]

COLOMBIA

Colombia often gets the poor press due to its internal struggles with rebel groups and drug cartels, but it would never be wise to overlook the second largest economy in South America. The high-tech boom in Latin America has reached Colombia as well. Colombia is seen as a bright prospect on the high-tech front. Numerous fact-finding visits to California’s Silicon Valley by Colombian entrepreneurs have taken place, and the UK’s Ambassador to Colombia, John Drew, has said that an increasing number of UK high-tech companies are interested in having a presence in Colombia.

Colombia has been developing a technology corridor called ParqueSoft in the southwestern part of the country. ParqueSoft integrates 11 Parks located in the following cities: Cali, Popayán, Pasto, Buga, Tuluá, Palmira, Buenaventura, Armenia, Manizales, Sincelejo and Pereira. The corridor also connects the regions universities with start-up and foreign subsidiaries that have set up operations locally.

Edward Dallas, the head of section for the British Embassy in Bogota, says he has “seen a rise in the number of companies coming to Colombia that are offering technological solutions.” As he says, “the rise is not just IT itself but high-tech products in areas such as security, construction, etc. In the narrower IT sector Colombia has companies like BT and Aveva (software for production plants). Colombia is also hoe to companies like Smartwater, which offers a high-tech product for forensic security and Experian, which provides solutions for managing credit risk in the financial sector.

While most of the countries of South America saw rising FDI inflows, Colombia posted a record high of US$ 13.234 billion in 2011.

For more information about the technology sector in Latin American markets, here are links to the first two articles in this series:

The International Entrepreneur: Technology Opportunities in Latin America (Part 1) Brazil

The International Entrepreneur: Technology Opportunities in Latin America (Part 2) Argentina

 

Sources:

INSEAD & World Economic Forum’s Global Information Technology Report 2012 http://www3.weforum.org/docs/Global_IT_Report_2012.pdf

Western Economic Diversification – Canada: LAC Science and Technology (Opportunities in Science and Technology) http://www.wd.gc.ca/eng/11111.asp

“2011 Foreign Direct Investment in Latin American and the Caribbean” Briefing Paper, United Nations ECLAC http://www.eclac.cl/publicaciones/xml/2/46572/2012-182-LIEI-WEB.pdf

ParqueSoft: Science, Arts and Software Technology Park (white paper) http://profs.etsmtl.ca/claporte/English/VSE/Brief%20Parquesoft.pdf



[i] “2011 Foreign Direct Investment in Latin American and the Caribbean” Briefing Paper, United Nations ECLAC http://www.eclac.cl/publicaciones/xml/2/46572/2012-182-LIEI-WEB.pdf