Tech-savvy entrepreneurs, software developers and engineers are welcoming in an era of change in Latin America, reshaping the landscape of the software industry as we know it.
Having generated revenue of US$22.1 billion in the region in 2021, the industry looks set to continue its upwards trajectory for years to come – especially in the software as a service (SaaS) space, which is growing at a rate even faster than in the US.
We ourselves at Vesta Software Group have completed 8 acquisitions in Latin America in the last 3 years alone, so it only seems fitting that we explore the main reasons behind the industry’s boom.
Why is the software industry in Latin America thriving?
Abundance of talent
Universities in Latin America provide highly renowned computer science and engineering programmes, which are significantly contributing to producing future generations of talent. Many of these have also adopted tuition-free policies, making education much more accessible.
Alongside traditional university courses, many companies are partnering with organisations to provide training and educational opportunities as part of a more hands-on approach to learning. These programmes have been incentivised by governments in a bid to encourage companies to hire interns and boost the number of people pursuing careers in the software field.
Various countries are also introducing new frameworks to increase the number of students studying computer sciences and computational thinking. In Chile, for example, the Ministry of Education has created the National Plan for Digital Languages, with teachers being trained extensively and lessons in computer science-related topics starting early on.
Industry collaboration
Both software companies and entrepreneurs are increasingly collaborating with international partners and participating in global events. These partnerships and events are helping to build relationships and showcase products and services to a much wider market, all while learning more about trends and best practices.
The perspectives and ideas gained from these experiences are helping to improve products and services in all countries across the region.
Overcoming challenges
During early periods of growth, businesses in Latin America faced various challenges, including limited funding, infrastructure gaps and skills gaps in emerging technologies.
Companies found ways to overcome these challenges and have built resilient business models that have set them up for continued growth.
Booming start-up scene
The region’s tech ecosystem isn’t just made up of large-scale corporates and existing industry giants – it’s also home to a bustling community of start-ups and entrepreneurs who are creating cutting-edge solutions across areas such as fintech, medical, e-commerce and more.
Larger cities have quickly become innovation hubs and are catching the attention of many international investors which increases funding, collaboration and exposure.
Government support
Increasing government support has been paramount to the growth of the software sector in Latin America. Various favourable regulatory frameworks and policies, tax incentives, and initiatives for small businesses have been implemented which have stimulated investment and incentivised software development.
English proficiency
According to the 2021 EF English Proficiency Index (EPI), the world’s largest ranking of countries and regions by English skills, several countries in Latin America held high positions on the list.
Thanks to strong English skills in the region, communication has been streamlined which lead to fewer hiccups and errors in collaboration.
As we look to continue to grow our presence in Latin America, we would love to speak to more software companies who want to pursue the next step in their journey. Get in touch with our team to have an informal chat today.
