Narayan AmmachchiCosta Rica and Colombia are steadily increasing their presence in Latin America’s modern services exports, gradually taking share from larger economies such as Brazil and Mexico.
Costa Rica is now the region’s third-largest exporter of modern services, tied with Argentina, according to the latest study by the Economic Commission for Latin America and the Caribbean (ECLAC).
Brazil and Mexico still account for the largest shares, at 33% and 17% respectively, but ECLAC notes that both countries are slowly losing ground as Costa Rica and Colombia expand their role.
Costa Rica raised its share of regional modern services exports from 3% to 10% over the period studied. Colombia also made gains, doubling its share from 3% to 6%.
Costa Rica’s progress reflects a combination of policy choices and stability. Free trade zones, along with a predictable legal framework and political continuity, have made the country attractive to foreign firms, particularly from the United States, many of which maintain at least small operational bases there.
U.S. companies have played a central role in this trend. In 2024, 80% of Costa Rica’s foreign direct investment came from the United States, according to government data. ECLAC also noted that Costa Rica’s “skill levels in the high-tech segment [are] above the average of all other Central American countries, Mexico, and almost all South American countries.”
Service exports generated more than $16 billion in revenue in 2024, equivalent to 17% of Costa Rica’s GDP. Over the past five years, the sector grew at an average annual rate of 8%, according to PROCOMER, the country’s investment promotion agency.
Even so, skills and geography are not the only explanations. Larry Hans Arroyo Vargas, Attorney at Law, Bufete de Costa Rica recently told local media that Costa Rica’s services boom is driven less by talent availability or closeness to the United States, and more by the country’s legal certainty and generous tax incentives — especially those embedded in its free trade zone regime.
In 2024, 420 service companies operated under the free trade zone framework. Tech-enabled firms in these zones now employ around 109,000 professionals, a significant number for a country with a population of just over seven million.
Colombia’s rise
Colombia’s expansion has followed a different route but shows similar results. Its BPO sector ended 2025 with a workforce of more than 790,000 and service exports worth $2.934 billion. The industry now accounts for about 3.3% of GDP, giving it growing economic importance.
The United States remains the main destination for Colombia’s tech-enabled services, though some firms are increasingly serving clients in Spain, reflecting shared language and business ties. Colombia’s “matured” talent pool is a key attraction, according to Chris Ross, vice-president at nearshore BPO firm Emapta.
Ross, who oversees the firm’s Colombian operations, said the country’s universities meet global standards. They produce engineers with solid foundations in analytical thinking, systems design and algorithmic problem-solving, skills that technology companies value. Bogotá, he added, is often referred to as the “Athens of South America” because of its concentration of academic institutions. The capital produces nearly 70,000 graduates each year.
At the same time, Colombia’s services sector is becoming more geographically spread out. Bogotá still accounts for close to half of sector employment, but its share is declining. Medellín now represents 22.9%, followed by Barranquilla at 8.8%. Cities such as Pereira, Manizales and Ibagué are also strengthening their position as centres for talent, bilingual workers and global services, according to ECLAC.
Latin America’s tech services outlook
Across the region, the share of modern services in total services exports rose from 27% in 2005 to nearly 40% in 2024. Uruguay, the Dominican Republic and Guatemala appeared in the ECLAC rankings for the first time, replacing Caribbean economies such as the Bahamas and Barbados, as well as Peru.
Despite this growth, challenges remain. ECLAC warns that Latin America still lacks a sufficiently deep technology talent pool. “There is a shortage of advanced digital skills, particularly in programming, statistics, and advanced analytics,” the agency noted. As a result, many companies are creating their own training programmes.
Educational quality also varies widely within and between countries, ECLAC added. More concerning is the continued outflow of skilled workers to technology hubs outside the region, which could limit long-term growth if not addressed.
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