The tech industry as a whole enjoys a lot of attention most of which is directed to the Silicon Valley and Eastern Asia. What happens in the rest of the world? For example, Latin America? It’s a region where technology is also quite popular, but somehow that hasn’t resonated well with the rest of the tech hubs around the world. Or has it?
Actually, the tech culture and business in Latin America are emerging quite quickly. Over the last a couple of years there has been a serious rise in investments in South America. So, what happens to the tech there? What are the trends? Let’s explore a bit.
Ideal conditions for innovations
Latin America is in a great position for a tech industry rise. It has a booming economy which GDP Focus-Economics reported to have grown by 2% in Q4 2017 alone. It has a GDP of 9.5 trillion which is more than India. In fact, this figure rivals China’s GDP. There’s also a lot of room for growth of IT services and products. Internet connections are still surging and people are getting used to the feeling of constantly being connected.
Another indicator of how much things are changing is the startup scene. TechCrunch reports that five years ago there were no startups from Latin America participating in big name accelerators such as Y Combinator or 500 Startups. This year there are dozens. Accelerators have started setting up specialized programs for specific sectors in the region.
Among the popular trends are fintech, agtech, social impact. There are also industry-specific accelerators and countries in the region are competing to become technology hubs. Chile, Argentina, Mexico and especially Brazil are among the most active in that area.
Of course, it’s not all roses. Latin American tech companies have similar issues as their colleagues all over the world. One of them is diversity related to women in tech, in particular. Again TechCrunch reports that women make up only 28% of startup founders in Latin America. Still, it’s well above the global average of just 17%, so they are on the right track.
Attracting talent and competing on a global scale is another challenge. Here things seem to be a bit easier. On the one side, the tech sector in the region is still emerging. This means lots of interest and lots of people ready to make a career change. VC funding is also on the rise, breaking $1.1 billion in 2017 and more than $600 invested solely in Q1 of 2018. It has already got three unicorns in Q1 alone. This booming sector brings even more interest. This makes tech companies from Latin America seem attractive on the global scene, too.
Areas of interest
That being said, what are the top tech trends in South America and Latin America in general? According to a report by LAVCA, the region is drawing the interest of big companies like Amazon, Google, Facebook, Netflix, Uber, Didi Chuxing and more. They are all looking not only to offer more of their services there, but also to set up offices, dev hubs and more.
As mentioned, fintech, agtech and social impact are three very active segments. Mobile and digital payments in particular enjoy a lot of interest from the users and are on the fast lane to big time success. Network and Internet providers are also much needed as many people in the region still don’t have access to high speed connections.
Industrial technologies are also of interest. One such area is 3D printing for manufacturing and robotics. Artificial Intelligence and tech in general – under the label “Industry 4.0” i.e. The Fourth Industrial Revolution, are also on the list of hot topics.
In short, Latin America is in a great position to become a very strong participant in the global tech industry. It can potentially become a lot bigger than Europe’s tech scene despite the fact that the EU has been trying to jumpstart the sector for years. Latin America has the advantage of the title “emerging region” which tells companies and investors there’s still a lot of room for growth there as opposed to a mature market. So, we are just starting to hear about the tech companies from Latin America and chances are we are all going to be seeing and hearing a lot more from them in the future.