Nearshore Americas

KPO a Big Part of What Drives Chile’s Outsourcing Sector

SANTIAGO, Chile and NEW YORK, May 10 /PRNewswire/ —As companies reduced their overall investment in outsourcing during the recent economic downturn, Chile bucked the trend and registered strong growth in global services revenue according to a recent “Chilean Global Services Industry Observatory” report from IDC, a leading provider of global IT research and advice.  While Chile’s 2009 revenue results are still being finalized, the country generated more than US$840 million in global services revenue in 2008.

“Chile’s global services industry has experienced tremendous growth in recent years,” said Nicolo Gligo, Executive Director of the Chilean Economic Development Agency (CORFO) in the U.S.  “When compared to our own internal estimates from the previous year, IDC’s findings indicate that the industry grew more than 100 percent in 2008.  We continued to grow at a rapid pace in 2009 and expect this trend to continue in 2010 – even after the recent earthquake – given the positive response we have received from current and potential business investors.”

IDC’s analysis determined that 45 percent of Chile’s global services revenue came from knowledge process outsourcing (KPO).  Approximately half of the country’s revenue came from engineering services and application software development alone.  In addition, more than 10 percent of the country’s revenue came from Innovation Process Outsourcing (IPO) in the form of R&D services provided to the bio/pharmaceutical industry.

“We believe that Chile, and Latin America as a whole, will become an increasingly important outsourcing location as companies in the United States and throughout the world evolve their sourcing strategies and seek competitive advantage through cost effective locations with strong business environments and highly educated workforces,” said Federico Amprimo, Country Manager of Southern Cone, IDC.

Chile’s political and economic stability, educated workforce and the access it provides to the rest of the world through its network of free trade and double taxation agreements positions it well for international companies looking to outsource operations or specific functions.  In recent years, more than half of Chile’s global service exports were to countries in Latin America with Peru, Mexico and Argentina making up the largest portion.  The United States accounted for more than 20 percent of the services delivered from Chile.

Sign up for our Nearshore Americas newsletter:

“Despite the difficult global economic environment of these past few years, Chile has maintained its competitive business environment and we anticipate continued strong corporate investments during the coming years,” continued Gligo.  “Chile’s reputation for being a safe and reliable outsourcing location, paired with our ability to offer strong government support to help companies begin operations quickly and seamlessly, has differentiated us and has been crucial to our success.”

Global services are an important economic driver for Chile, with more than 20,000 people employed in the sector.

Kirk Laughlin

Kirk Laughlin is an award-winning editor and subject expert in information technology and offshore BPO/ contact center strategies.

Add comment