South America is not a single country. Just like in North America, Asia, Africa and other continents, the cultural dynamics and considerations vary from nation to nation, and within the different regions of each country. Javier Peña Capobianco, General Secretary for the Asociación Latinoamericana de Exportadores de Servicios (ALES), and a lecturer on the subject of International Trade in Services at the Catholic University of Uruguay, helped explain some of the misperceptions and the rise of Latin American countries on the global stage.
NSAM: Tell us about the Asociación Latinoamericana de Exportadores de Servicios (ALES):
Capobianco: In 2006 I realized that Latin American countries lacked experience and had the same problems with exporting services. The first component was compiling statistics about the common problems of exporting services among the member countries. The second component asked ‘how do we promote services?’ Another area that we try to focus on is double taxation, where a company pays both export and import taxes.
The Association provides a space where members can exchange ideas and learn from the best practices of others. Currently there are 17 member countries and more than 20 institutional members, which are both public and private, such as Chambers of Commerce, Associations of Exporters and Institutions of Trade Promotion like ProChile, ProPeru and Corpei.
ALES is a very new institution, however it has quickly been recognized by international stakeholders, for examples it has an informal agreements with Asociación Latinoamericana de Integración (ALADI) and recently the Inter-American Development Bank (IDB) has approved a $500,000 dollar project for issues of common interest among countries.
NSAM: Have software exports been increasing or decreasing?
Capobianco: This sector is growing in Chile and Colombia, and other countries. Services is one of the most important sectors in Uruguay. The promotion of data services can benefit from working with colleagues in Latin America.
NSAM: Are you seeing increased investment from outside of Latin America?
Capobianco: Absolutely, India is trying to invest into Latin America and most countries in Latin America are trying to compete. There are similar advantages, human resources, very good people with qualifications. In particular the investment to Brazil is quite huge, but they have a big problem with the amount of investments.
NSAM: What should foreign companies know about doing business in LatAm? Such as the cultural dynamics between countries.
Capobianco: People can get the impression when working with Latin America that employees are not very professional, that they are slow. But the reality is that Latin American businesses know quality is very important. With regard to Uruguay, the infrastructure is very good. People aren’t living in huts. The problem for Uruguay is that most people don’t know what Uruguay means, and think that Uruguay and Paraguay are the same. They don’t have anything to do with each other.
The realities are very different amongst Argentina, Brazil, Colombia, Uruguay and Paraguay. But people say that Latin America is in the same bag. Not all of the countries are the same, and not all regions are the same within the countries. It depends on what you are looking for: if you need a high quality of human resources, but not a lot of people you go to a country like Uruguay. If you need a lot people go to Argentina and Brazil. Costa Rica is trying to promote KPO instead BPO. I’m not sure if all countries can do that with the qualifications we have now; Chile and Colombia are also trying to promote KPO.
Brazil is a very important player – they are doing important things – at the moment, the internal market is more important than the external market. They are not interested in services. They are a huge market and can do things on their own. Mexico is important in terms of service exports, but there are not many statistics about it; ProMEXICO promotes exports
NSAM: What should Latin American business leaders be aware of when dealing with the US and Europe?
Capobianco: One of the most important things is to have a good level of English; this needs to improve a lot. Chile and Colombia have programs to promote training in English. Uruguay has three or more levels, and the most developed countries in this area are Colombia, Chile, Uruguay and Argentina. Think with a global mentality. Respect timetables. Exporting is not the same as selling to internal markets, they need a global sensibility. Respect multi-cultural environments – some countries are more connected to the US, and others are more connected to Europe.
NSAM: What is another attractive dynamic about Latin American countries?
Capobianco: Latin America has an important advantage because the Hispanic population in the US is growing exponentially. India and Asian countries are interested in establishing offices in Latin America to take advantage of the Spanish language capabilities. Latin America will be an important stakeholder in Offshoring. This is the right moment for Latin America.