Inside Latin America’s ‘Brain Power’ Hubs
Latin America’s IT ecosystem is on the rise. Although no country in the region ranks among the world’s top 50 nations in innovation, some have done their homework on skilled labor training and continue to make important strides in fueling development of the lifeblood of the digital economy: Brain Power.
In our special report, Nearshore Americas used data from both WIPO’s Global Innovation Index and the World Bank’s Human Capital Project to determine which Latin American countries have the best conditions to cultivate talent in the fourth industrial revolution. Variables we considered include learning-adjusted years of school, gross enrollment in tertiary education, percentage of graduates in science and engineering, QS university ranking (an annual ranking system), and percentage of knowledge-intensive employment.
Gilles Maury, Leader of Innovation for Consulting for Spanish Latin America at Deloitte, also contributed his perspectives on the availability of talent, digital ecosystem dynamism, and the challenges that the region faces.
So then, we proudly present the Latin America’s top 8 ‘brain power’ hubs.
- Learning-adjusted years of school: 9.6 years
- Tertiary education enrolment: 91.5%
- Knowledge-intensive employment: 26.4%
Chile is Latin America’s undisputed leader as a ‘brain hub.’ It has the best scores on three out of four variables (learning-adjusted years of school, tertiary education enrolment, and percentage of knowledge-intensive employment). “Chile has been a leader on this for quite some time now. The incentives to entrepreneurship, as well, create a dynamic digital ecosystem,” Maury said.
- Average score top 3 in QS University ranking: 25 worldwide
- Knowledge-intensive employment: 23.1%
- Well-positioned for start-ups
Brazil’s strongest asset is the quality and reputation of its universities, considered the best performing in Latin America. Knowledge-intensive employment is also widespread. “My perception is that Brazil is way more dynamic than Mexico. Brazil also excels in the number and quality of startups,” the the Deloitte analyst said.
- Science and engineering graduates: 25.5%
- Average score top 3 in QS University ranking: 30 worldwide
- Well-positioned in innovation
According to Maury, even though the start-up ecosystem is more developed in Brazil than in Mexico, the North American country has an advantage in innovation. Regarding the ‘brain power’ variables, Mexico leads in the percentage of science and engineering graduates. It has a very solid position of its universities in the QS ranking, being the third in the region after Brazil and Argentina. Its main challenge is the low enrollment in tertiary education.
- Science and engineering graduates: 23.7%
- Average score top 3 in QS University ranking: 34 worldwide
- IT start-up dynamism in cities like Medellin
For Maury, Colombia is a promising country that should be on everyone’s radar. “A country like Colombia, that at the level of traditional education is not the best, the country is still emerging in innovation. Medellin is gaining a reputation for embracing the fourth industrial revolution. Colombia has dynamism, openness, and a digital culture possibly more advanced than what you can find in Argentina,” he said. Colombia performs well on science and engineering graduates and also in the quality and reputation of its universities.
- Learning-adjusted years of school: 8.9 years
- Tertiary education enrolment: 89.1%
- Average score top 3 in QS University ranking: 29 worldwide
Argentina’s ultimate strength is in the quality of its education system, performing best in learning-adjusted years of school, university rankings, and enrollment in tertiary education. However, Maury warns that the South American country loses points because of its current economic situation and its relative lesser dynamism in comparison to the previously listed countries.
- Knowledge-intensive employment: 24.4%
- Learning-adjusted years of school: 8.6 years
- Outperforms for an economy of its size in innovation
“Costa Rica has had success attracting foreign investment with industry leader choosing the country, particularly in technology. This is due to the excellence of the Costa Rican educative system, which is recognized worldwide,” Maury said, citing the Central American country as one of the “traditionally successful.” Costa Rica performs well in learning-adjusted years of school and percentage of knowledge-intensive jobs but has a challenge graduating more professionals in science and engineering. The Central American country is also characterized by punching above its weight given that the country is far smaller than most of the other contenders.
- Science and engineering graduates: 23.8%
- Knowledge-intensive employment: 24.4%
- Signs of maturing talent availability
Like Colombia, Peru is another rising promise. Peru surpasses Colombia in the percentage of science and engineering graduates -being the second in the region after Mexico- and is well-positioned in tertiary education enrolment and knowledge-intensive jobs. Maury considers that Peru is showing signs of a maturing digital labor ecosystem, with more companies adopting positions such as a Chief Data Officer (CDO) in this country.
- Knowledge-intensive employment: 22.2%
- Quality education system
Like Argentina, Uruguay’s advantage is the robustness of its education system. Yet, it needs more dynamism to accelerate talent development. Despite being in our ranking, Uruguay under-performs in the quality of its universities and percentage of science and engineering graduates in comparison with the rest of the countries on the list.
*Sources: WIPO’s 2019 Global Innovation Index, World Bank’s 2019 Human Capital Index.
Overall, most Latin American countries face similar challenges when it comes to producing the talent required for the knowledge ecomomy. Maury argues that universities are not necessarily adapting well to the intensive and fast-changing demands of technology fields.
“Today, much of the available talent is self-taught. I’ve seen this, particularly in Costa Rica. There are start-ups that work with blockchain or robotics with people that didn’t acquire those skills at the universities but instead learned them online or through technology provider certifications. This means that there is a market and rising talent, but it doesn’t necessarily go through the traditional circuit of academia,” the analyst said.