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Business Management

Eric Arcese (Latin America) - Why Latin America, Why Now?

There are many reasons for doing business in Latin America; great food, terrific music and outstanding people. To cap this all off it has a dynamic economy that has fueled some pretty impressive growth over the last couple of years.

Think back to 2008 when a global economic apocalypse was almost certain. The securitization of real-estate mortgages in the US, huge credit boom and sub-prime loans, caused a perfect storm that left major financial destruction in its wake. Now one would think that if the world's largest economies like the US, Japan and the UK could suffer major GDP losses, "developing" nations in Latin America wouldn't stand a chance - not so - for many markets in Latin America are far from "developing" and are actually very "developed. In many cases they have more mature banking criteria than their Western European counterparts.

While many countries around the world were experiencing the most economic adversity seen in decades, markets in Latin America were far more accustomed to dealing with financial crisis and were protected by 5 key elements; 1) conservative banking practices 2) relatively low levels of credit penetration 3) access to a tremendous amount of natural resources 4) sound financial institutions and 5) an increasingly educated and upwardly mobile middle class.

This has fostered the development of economies that are far more resilient than one would traditionally expect, and has yielded some pretty amazing growth as of late.

Some proof-points of economic expansion in Latin America that feature in Latin Trade are:

 

  • Brazil has had 35M people enter the middle class from poverty in just the last  couple of years
  • Brazil is now the third largest computer consumer market in the world trailing only the US & China
  • Argentina has gone from an unemployment rate of 22% in ‘03 to 8% in ‘10 
  • Argentina's GDP is expected to grow some 5% in 2011
  • 721,000 new jobs were created in the first 9 months of 2010 in Mexico alone
  • Foreign Investment in Mexico for 2010 is projected to be $20B, nearly double of what it was in 2009

From an IT perspective this backdrop of economic strength is going to create fertile ground for some amazing progress in technological adoption. We will soon start to see that the combination of a highly educated populous with financial muscle will translate into accelerated adoption of cutting edge technologies like Cloud Computing, Virtual Desktop Interface, Smart Grid Computing and applications that fuel Big Data Processing.

I submit that just as Latin American countries taught the world key lessons in the wake of the latest economic crisis, we will have a lot to learn from an IT perspective from this region in the next decade.

By Eric Arcese, Director of Sales Strategy at EMC for Latin America. You can follow Eric at his blog here.

 

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