Tech trends 2020: LatAm poised for growth despite political turmoil

Tumultuous political climate does little to dampen tech optimism across the region.

It's been another tumultuous year for Latin America - a year of violent protests, coups, the rise of the far-right, environmental crisis, and more. Yet the region's tech sector has seen some of the most significant investment of its history in the last 12 months and experts are increasingly heralding Latin America as one of the global tech hot spots to watch.

The region has grappled with political, social and economic uncertainty across countries for some time and 2019 has certainly seen its share. Yet, the continued growth of its middle class, coupled with a relatively stable economic outlook for the big players on the continent, have meant that its digital credentials continue to grow.

Poised for growth

Digital transformation could hold the key to really leveraging the power of the middle class.

Jaana Remes, Partner at McKinsey Global Institute, and Homi Kharas, Interim Vice President and Director - Global Economy and Development at Brookings Institution, wrote in an article for the World Economic Forum: "Digital entrepreneurship is on the rise, with new platforms and applications in e-commerce and digital finance emerging across the region. And several Latin American digital startups have already achieved valuations of over $1 billion, while creating new, more productive jobs. Decades of weak growth in Latin America have left large parts of the population economically vulnerable. But by taking advantage of digital disruption, the region has a golden opportunity to nurture faster growth that benefits everyone."

Polymath Ventures notes that Latin America surpasses long-touted emerging regions in many metrics - from its 57% Internet penetration which puts it ahead of Southeast Asia, South Asia or Africa to the amount of time Latin Americans spend online, which is much higher than their global peers at around 3.5 hours for Brazil, Mexico, and Argentina.

Two of Everest Group's analyses, the Market Vista Annual Report 2019 and Predictions for Global Services Delivery Locations 2019, point to Latin America as a growing, competitive destination for the delivery of IT services, spurred on by its cultural affinity for and proximity to the US, the region's skilled tech talent, language proficiency, and an ecosystem increasingly geared towards tech start-ups. Mexico, Argentina, Brazil, Colombia, and Chile are ranked as the top five countries for such services.

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