With a relatively small population of nearly 3.5 million, it’s easy to discount Uruguay from the global tech conversation. However, despite its size, the country has become a bit of a shining star and is now the number one software exporter per capita in the region – and the third worldwide!
Having just completed our first two acquisitions in the area, what better time to share a little insight into one of the most stable economies in Latin America and what makes it a particularly attractive destination to do business right now.
Talent pool and education
Uruguay has nurtured a highly skilled and specialised pool of talent, following in the footsteps of the rise of Silicon Valley, which benefits heavily from a combination of established professionals and aspiring graduates.
As well as boasting advanced technical skills, many Uruguayans know multiple languages – Spanish being their native, with a large portion of software development engineers also being fluent in spoken and written English. What’s more, they are also reasonably familiar with business practices and standards in the US.
When it comes to their education system, the country delivers brilliant academic results and even became the first to implement a one-laptop-per-child initiative in public schools, ensuring children begin using computers from an early age.
Together, all these factors have contributed to Uruguay continually ranking highly in technology and innovation awards in Latin America.
According to 2019 analysis from The World Bank, Uruguay stands out as an egalitarian society, with high income per capita and low levels of inequality. Their solid social contracts and economic openness have facilitated the minimisation of poverty, instead promoting shared prosperity.
Over the years, the country has also developed and maintained a strong political system, supported by a legal system made up of robust and consistent framework, each of which has helped to boost the economy.
Business environment and infrastructure
In part, Uruguay’s small size has been a factor in its success – many of it’s 1,000+ software development companies are forced to look beyond their national borders to encourage growth early on, with a large proportion of their near $1bn in exports going to the US.
To encourage the start-up of software development and IT businesses in the country, the government has introduced various tax incentives, including exemption from corporate income tax and free trade zones. They have also introduced national initiatives to support innovation and entrepreneurship, including Uruguay XXI, a government organisation that incentivises global companies looking to expand here. In their bid to make the country an investor destination, many major industry players (IBM, Microsoft, VeriFone and more) have chosen to establish Uruguayan bases.
In many of the more traditional offshore countries such as China or India, time differences can make it extremely difficult to organise communications during normal workday hours. In Uruguay’s favour, their time zone is much more closely aligned with the US (+1 hour from EST), which allows for fluid correspondence and means issues can be solved in real-time.
The combination of free trade zones, research initiatives, a well-educated and talented population, high standards of living, and a solid reputation for political and macroeconomic stability have all played a significant role in boosting Uruguay’s tech landscape – something we expect to continue well into the future.
As we look to supercharge our expansion strategy in the area, we would love to speak with more software companies who are looking to pursue the next step in their journey. Get in touch with our team today to start a conversation.