Export of services, an opportunity for Latin America

In Latin America, global outsourcing expands faster than products export. However, Latin America is still far from reaching the volume of the Asian region.

The export of services, also known as global outsourcing is a current trend in technological development, and as an industry, it expects to grow 10% in 2019.

In Latin America, global outsourcing expands faster than products export. However, Latin America is still far from reaching the volume of the Asian region. LatAm represents so far, only 3.5% of the services that are provided worldwide.

Even so, many small and medium-sized Latin American companies have participated in projects that have had a great global impact. Studio C, from Guatemala, participated in the production of Chronicles of Narnia, Globant, a software development company from Argentina, participated in the creation of the FIFA video game series, Ring chose Blue Trail Software Argentina to develop its smart doorbell ecosystem.

In terms of videogames and animation, Latin America has grown faster than any other region in the world. In 2014 the LatAm increased its market by 60% in the development of mobile games, well above the 21% expansion of the Asian region.

Best opportunities in the export of services

Among the primary services export opportunities are the Business Process Outsourcing (BPO), as marketing and financial services; Information Technology Outsourcing (ITO), including solutions for the development of web applications and e-commerce; and Knowledge Process Outsourcing (KPO), in services such as the production of animation or videogames, and even the export of architecture and engineering design.

Fabrizio Opertti, director of the IADB’s integration and trade sector, believes that “at present, the trend of international trade in services is less about new technologies and more about interconnectivity, human talent, and creativity.”

Opertti believes that, even though Latin America has shown its potential in key sectors of services, many companies are in segments of low value and with risk to automation such as call centers and data centers. For Latin America to remain competitive, Opertti recommends three axes:

  • Effective promotion agencies. The promotion agencies have a significant impact on exports and allow the promotion of more sophisticated products and services.
  • Applied Training. Collaboration between the public and private sectors is required to keep the workforce updated.
  • Networking. Companies can have a better understanding of market demands by meeting, either in person or virtually, with buyers of digital services.

Different initiatives seek to promote these axes in the region. The creation of tech hubs, as has happened in Jalisco, Mexico, or programs to repatriate talent in Argentina, is a small sample.

LatAm have found success in global outsourcing. Currently, Colombia is a global leader in BPO, and the city of Medellín received recognition as a leading destination for nearshoring.

Latin America has taken advantage of the growth opportunities offered by the export of services today and recognizes that there is still a lot of room for growth.