The steady increase in the requirement of IT skilled professionals on a global scale has compelled businesses to think around refreshingly new approaches for talent acquisition and project management. Nearshoring offer is viewed as a strategy that allows for the location of services relatively close to the home country, and some cultural proximity. The burgeoning IT sector in Latin America has made it a prime destination for nearshoring. This article breaks down the effect that nearshore services are having on IT in Latin America, considering its favorable circumstances, challenges and how it is rendering a transformative help for development inside these locales.
Why Nearshore to Latin America
1. Geographical Proximity
The geographical proximity to North America is one of the most important benefits from nearshoring your operation in Latin America. Closeness dramatically reduces travel time (which has repeatedly proven to be the most expensive cost of software outsourcing, in no small part due to rude weather) and makes it more likely that your organization will be able to meet with its nearshore staff in person on a regular basis. Moreover, very small differences in time zones enable real-time communication and involve better collaboration that ensures a crucial role end-to-end solution for agile development process and project management capabilities.
2. Cost Efficiency
Latin America is extremely cost-effective nearshore compared to hiring in the U.S or Western Europe. This advantage, combined with the lower cost of living in many Latin American countries means that highly-skilled IT professionals are paid less but remain competitive and top-notch quality for companies looking to maximize their budget.
Case in point: while a software development company in New York will pay top dollar to keep their developers local, they may find that renting code from Argentina & Brazil - where quality of education and tech skills is high and cost-of-living much lower for the employees - might save them so much money even with some exchange rate loss.
3. Skilled Workforce
There is a huge bunch of talented IT professionals in Latin America Mexico, Brazil, Colombia and Argentina have been investing hard in ensuring their educational systems keep up with technology standards so fresh graduates are capable of working on projects from the moment they come out prepared to work with more programming languages or frameworks you've ever heard of Most of these professionals have good command over English so it becomes easier to communicate with them.
Medellín—Colombia also shifted to a tech hub attracting local implementations of technology and tech companies from around the world. With solid universities and tech institutes in the city that have been cranking out good software engineers and dev even before all this wave of interest on softshore, it is already a very interesting point for nearshoring Latin America.
Challenges and Considerations
Although many countries in Latin America have a good command of the English language, these are not substitutes for the cultural and linguistic differences that also greatly influence communication. If not addressed, and bridged in an effective way, these could be the undoing of your valuable nearshoring.
Some venturing into nearshore operations in Latin America, however, can expose to political and/or economic instability some of its countryside. You should also consider how stable the country is and whether its infrastructure will still function when you need it to.
For instance, countries such as Chile and Uruguay have relatively stable political climates that can be beneficial for operations on the ground but other countries may experience swings in their policies over short term periods which could partially challenge business activities.
Transformation Role in Economic Development
Creating jobs and skill development
More Jobs and Skills - Nearshoring in Latin America Clusters such as these have led to more jobs and educational programs - including New American Pathways in Atlanta, which offers language classes for refugees; or training provided by international companies that operate there. As a consequence, it has contributed to economic growth and development.
For instance, the creation of tech parks and innovation hubs in cities such as Guadalajara (Mexico) and Buenos Aires (Argentina), have led to thousands of jobs while also attracting high levels of foreign investment. These investments have also galvanized local start-ups, creating a culture of innovation.
Boosting Local Economies
Local economies have received a significant fill-up from nearshoring by an influx of foreign investment. This has resulted in the creation of infrastructure, a demand for local goods and services, and better quality life.
Costa Rica is full of global tech companies which has resulted in the emergence and evolution of a substantial startup ecosystem complete with co-working spaces, incubators, accelerators etc.
Conclusion
There are multiple benefits to nearshoring your software development, among which being geographical proximity with Latin America providing the location and cost efficiency thanks to competition for talent while technology innovation in Uruguay guarantees you will have access to a skilled workforce. Although there are several implications such as cultural differences and political stability, one cannot ignore the advantages to economic development in the region. Based on nearshoring benefits, companies can also develop their work processes and innovation capabilities while fostering the growth of IT in Latin America. With a growing demand for IT services, Latin America is becoming one of the attractive nearshore development destinations that lies before important changes and opportunities.
