Chile Leads Latin American IT Services Push

Michael Vizard

As much as Chile is now known for its engineering prowess after the famous rescue of 33 trapped miners, the country is hoping that such technical feats will get companies to take a look at other technology-oriented aspects of the country's economy.

According to JC Munoz, CEO of Chile-IT, a consortium created by the Chilean government and IT services companies based in Chile, his country is at the forefront of a Latin American expansion into the global market for IT services. In 2009, the Chilean IT services business was valued at about $1 billion. But Munoz says the country expects to expand that to $5 billion by 2015. To make all that happen, the combined investment of Chile-IT member organizations will total $3.3 billion by the end of this year.

That might represent only a sliver of the overall global IT services business, but, Munoz says the Chilean approach to is to focus on high-margin opportunities that do more to complement the existing operation of U.S. businesses than they do to move them to Chile.

As such, the Chilean government is helping IT services companies such as Novared, Ki Teknology, Synapsis and Coasin Global Services to expand operations in the United States. Those companies will be hiring U.S.-based employees to work with their Chilean counterparts on IT services projects.

Chile has about 92,000 IT professionals and is trying to expand that base by not only training its own citizens, but also actively recruiting people from all over Latin America to attend Chilean universities. As part of that effort, the Chilean government likes to highlight its economic stability and role as the "Switzerland" of Latin America.

Munoz concedes that on a pure cost basis, Chileans will have a tough time competing with IT professionals from India and China. But Munoz notes that Chilean IT experts work in the same time zone and have the same business culture as their U.S. counterparts. In general, they also get paid about half as much as U.S. IT workers. That might not be as inexpensive as India or China, but when you add up the costs and the productivity benefits, Munoz says Chile is a pretty competitive option

In fact, a recent survey conducted by Capgemini found that Latin America was running roughly even with China for second place when it comes to outsourcing global IT services. And among Latin America countries, Chile ranks near the top when it comes to advanced IT services, says Munoz.

Obviously, outsourcing in this economy is a particularly sensitive emotional and political subject. But it's not a subject that's going away, either. So Munoz says Chile is trying to make a case for Latin America being the least disruptive option compared to other regions on the world. So when the next big outsourcing project comes up, Chile is hoping that IT organizations will remember to look South in addition to East and West.

Subscribe to our Newsletters

Sign up now and get the best business technology insights direct to your inbox.


Add Comment      Leave a comment on this blog post
Nov 7, 2012 6:05 AM Rituparna Roy Rituparna Roy  says:
Thought you might be interested to know that we have released a report on this topic. Please follow the link to read more about this report: http://www.technavio.com/content/it-services-market-latin-america-2011-2015 Reply

Post a comment





(Maximum characters: 1200). You have 1200 characters left.




Subscribe Daily Edge Newsletters

Sign up now and get the best business technology insights direct to your inbox.

Subscribe Daily Edge Newsletters

Sign up now and get the best business technology insights direct to your inbox.