By James BargentIn a business world where a company’s growth and success are increasingly dependent on its relationship to technology and innovation, one sector has commandeered the cutting edge – creative services. Even in the midst of an economic crisis, the creative wave has shown no sign of breaking and is one that Latin America could be in a unique position to catch. The creative services tag is applied to a broad range of technology driven activities including digital marketing, social media, gaming, multimedia, and web 2.0 development.
In Latin America, two countries with established reputations for high quality IT sectors are so far leading the way in the sector – Mexico and Argentina. Also building a name for themselves are regional economic powerhouse Brazil and rising outsourcing star Colombia. However, true to its globalized roots, the sector spans the whole region, running from rapidly growing independent digital agency ONIRIA/TBWA in Paraguay to online media operations global behemoth Theorem, which now has offices in the Dominican Republic.
One of the region’s creative services pioneers is DJ Edgerton, founder of US/Colombian digital agency Zemoga. When Edgerton first travelled to Colombia, he found a country rich in human capital but largely excluded from the global economy by its reputation for insecurity and with little sense of its potential in the creative sector.
However, since he set up Zemoga in 2003, the company has posted impressive growth and acquired a client list that boasts Fortune 500 brands such as Pfizer, Sears and Citibank. The key, Edgerton said, was persuading companies to look past their misgivings to see the quality of the work being produced. “Years ago, I would have to tell people not to worry, that Price Waterhouse was my accountant, I was not doing anything [bad],” he said. “(But) once you show them the results of this workforce, they no longer care where they’re from.”
Zemoga’s business strategy has focused on attracting US based clients through a combination of the stateside contacts of Edgerton and his associates and a Colombian development team packed with local talent.
For Edgerton, it has been a better fit than trying to tap into the Latin American market. In Colombia and other parts of Latin America, he said, spending in the sector is still driven by firmly entrenched old fashioned media groups struggling to adapt to a new, ever evolving technology driven era. “There is still an old school mentality on the upper floors of management of a lot of these larger organizations because they are slow to change and they don’t understand new technology, he said. “I don’t have that problem in the US.”
However, for many homegrown start-ups which don’t have Zemoga’s American network, growth is being driven by the domestic market. Mexico based creative media agency Masfusion is one such company, and its innovations in monitoring and managing social media content have mostly benefited domestic clients,
“In the whole world the way we communicate has changed,” said Angel Banuelos, Masfusion’s co-founder and CEO. “And Mexico and Latin America is one of the biggest markets in social media penetration and internet usage.”
Culture and Business
Nevertheless, Masfusion has begun to make inroads into external markets and is keen to expand further. Banuelos believes both the company and the region as a whole are in a good position to do so.
“We have found every time we travel to the United States and Canada to talk to new clients that they are tired of working with India or China – mostly because of the time zone but also because they have a totally different culture,” he said.
Edgerton also identified culture as one of Latin America’s key differentiators as an offshore destination, one that has particular resonance in creative services. “There is such an affinity between the US and all Latin American nations from a design point of view,” said Edgerton. “It’s not like China or India where there is inherently a lack of understanding of the American consumer aesthetic.”
“Any vendor that [US companies] use outside of its internal staff has to be able to design in lockstep with the expectation of the brand in the eyes of the US consumer,” he added
However, despite the inherent cost savings of working with companies based in Latin America, Edgerton insists that Zemoga and similar companies can and do compete not as a cut-price option but as a quality alternative. “We do not position ourselves as a labor arbitrage play, we do not say we are cheaper because we never wanted to get branded that way. The quality of the work speaks for itself,” he said.
For those involved in the creative services sector, the ability to take on US competitors on quality as well as price stems from the democratizing impact of the internet and the ability to tap into a new generation of talent raised on ever-developing technology.
“One of the things that the internet has done is it has created this community of learners and designers who share, 24 hours a day, their experiences across borders … consuming an enormous amount of this web culture and it has become ubiquitous across Latin America,” said Edgerton.
Priding on Creativity
Maximizing the abilities of that generation has been one of the central tenets of the business strategy of Globant, an Argentine software design company that prides itself on its creative innovations. “This is generation, which has been shaped by the technology that we have available, left us with a lot of people who are eager to become producers not just consumers, who are used to having a voice – at least in their private lives -, who know and understand technology and who have the feeling of belonging to a larger global community,” said Guibert Englebienne, Globant co-founder and CTO.
While the Latin American creative services sector is still in its infancy, companies such as Zemoga, Masfusion and Globant are already showing how Nearshore benefits and onshore quality could, with the right support, prove a formidable value proposition for the region.
In recent years, Zemoga has seen its local competition grow in strength and numbers, evidence for Edgerton that the US should brace itself for the time Latin America fulfils that potential. “It is what I call the digital El Niño,” said Edgerton. “It’s coming and everyone in the US is looking and saying what the hell is that. The first wave has already hit, we’re just waiting for it to percolate up.”