Nearshore Americas

Mendoza, Leveraging Successful Track Record, Flexes its Muscle

As of late Mendoza is the city on everyone’s mind. And if you’re not thinking about it – you should be.

The small city in the west of Argentina is best known for its world-class wine.

But the high-skilled workforce of software engineers it offers has put it under the radar of companies wanting to Nearshore. And people are arguing it is a better spot to outsource to than the likes of Cordoba.

Companies like Lagash, Belatrix and Globant all have significant operations there. And that’s not forgetting Mercado Libre and Eventbrite, as well as Spanish IT consultancy firm Everis, too – which is headquartering its Latin American operations there.

Following a loan from the Inter-American Development Bank (IDB), the province’s local government has been working hard to get Mendoza’s name out to the world. The IDB’s annual meeting is also hosted in Mendoza – which demonstrates its importance in the country.

So, why does this city of little over 100,000 have that’s so special? For a start, its people.

Carlos Pallotti“People from Mendoza are resilient,” says Argentine entrepreneur Carlos Palotti, the former undersecretary for Technology and Production services in Argentina’s Ministry of Production, Science and Technology.

“It has never been an easy place to live because it is a dessert. The Mendoceneans are very strong workers because the land is not very good. So they’ve always had to work very hard to install more green areas where there haven’t been such areas. And of course it is a wine producing area – it produces more than Chile.”

He adds: “Mendoza really has a good environment right now to work together, the private sector and the public sector, and they are working to establish it as one of the key economies in the region.”

The educational system is also an important factor for Mendoza’s success and some of the country’s top universities are located there – with Lagash running a program with the government and various colleges and universities to train young people in the software development industry.

Luis RobbioLuis Robbio, the Co-founder and CEO of Belatrix, which is based in Mendoza, stresses this to Nearshore Americas: “The amount of universities, the quality of education and interest of provincial government to push this [software development] industry is what makes Mendoza so special.”

“There is fantastic educational system that is being tuned for this. I am optimistic that we are in the right track. The money we got from the IDB is being used to create scholarships.”

Belatrix is one of the city’s great success stories. Founded in 1993, the company started small, but focused heavily on getting big clients in the States. Its growth has since been rapid, and now has international operations in three continents.

Robbio tells Nearshore Americas this changed the city’s ecosystem.

“I think we think we changed the level of the city in terms of technology – because of our clients,” he says.

“From the very beginning we started working with big clients, in the U.S. – which was difficult but it was a great exercise and what helped put the city on the map.”

Recent investment has helped the city too. The IDB’s loan of US$50 million was announced earlier this year. The cash will be used to improve roads in the region as well as tourism infrastructure. Of the $50 million, approximately $2.5 million will be designated for technology and entrepreneurs.

But aren’t things looking gloomy – or at least very unpredictable – for Argentina, economically?

Mendoza is different, experts and figures say.

While urban unemployment is high nationally in Argentina, Mendoza’s has been typically lower in the past ten years.

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And a devaluation of the Argentine peso only helps boost wine sales, tourism and trade with Chile.

Image result for Martín Kerchner,Martín Kerchner, Mendoza’s Minister for the Economy, Infrastructure and Energy, tells Nearshore Americas: “Obviously Mendoza is part of Argentina and has a sovereign request that exists in Argentina. But Mendoza has always been distinct. For example, Mendoza’s government has never gone into default. Never.

“And this is recognized worldwide. And it has always respected its returns.”

He adds: “It is not an easy zone to live in and work in but its people are resilient and this shows with the companies operating out of here.”

But there is still a little way to go in the city, says Robbio.

“If a foreign company comes to Mendoza now – they may have the challenge of finding people.

“We need maybe a couple of years to increase the amount of people available. But the good news is the government is working on that.”

Mathew Di Salvo

Mathew Di Salvo is a Colombia-based contributing writer and editor at Nearshore Americas.

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