Jared WadeRosario is a gem of a city in Argentina with wonderful architecture that sits along the picturesque banks of the Parana River. The river is the second largest on the continent after the Amazon and has been “the principal transportation artery of central South America since the times of early colonization,” according to NASA. This has helped Rosario, a city of 1.2 million, become the largest agricultural hub in Argentina and one of the principal agribusiness hubs in Latin America. Some 80% of the nation’s crop exports, which generated more than $23 billion in 2013, are routed through the city, making it “the Chicago of Argentina.”
In recent years, however, it has also blossomed into somewhat of a tech destination. Rosario, home of revolutionary Che Guevara and footballing superstar Leo Messi, is a thriving metropolis that offers a cheaper cost of living than Buenos Aries and access to a highly educated workforce. Along with Cordoba further to the west, it now serves as one of two main technology locations outside of the capital.
Rodrigo Slelatt, a partner at A.T. Kearney, says the pool of technology talent is already good and growing due to the city’s robust academic and entrepreneurial environment. “It started with the multinationals setting up shops there,” said Slelatt, “but then local firms also used it as hub for development.”
Rosario Tech Sector Presence
NEORIS has deep roots in Rosario. Its CEO Martín Mendez, in 1996, co-founded a company called AMTEC in the city that was acquired by NEORIS early in the firm’s history. Apex America, Globant, and IBM also have large operations in the city.
“We have seen a revolution of the tech community in the city in the last two years,” said Sergio Donzelli, the Argentina-based managing director of NEORIS, which has 800 employees in the metro area. “We have a very good professionals who have a lot of knowledge about tech development and services.”
Software developer Globant expanded in Rosario in 2010. Its $24 million venture brought 100 tech jobs to the city and coincided with regional growth that also saw new sites opened up in Uruguay and Cordoba, Argentina. “Rosario has excellent technology and communications infrastructure, including ports, highways and International airports,” said Dario Lanati, site manager at Globant Rosario and Santa Fe. “It also has excellent universities so there is an extensive talent pool that has positioned the city as an attractive destination for a wide variety of industries, including the technology sector.”
IBM has been in Argentina since 1923 and opened its first Rosario office in 1933. As it does often, the tech giant hosted an open tech forum in the city in 2013 to commemorate its 90-year anniversary in the nation where company executives discussed topics including Big Data, cloud computing, and ways to make municipalities like Rosario into “Smart Cities.”
Rosario’s Strength: Education
While Rosario has a ways to go in becoming a Smart City, the government has been pushing for innovation. Santa Fe, the province that is home to Rosario, has launched several initiatives to grow the technology sector, with its Program for the Promotion of Science, Technology and Innovation Activities leading the way.
Already, the city is known for its good schools. “The main benefit of Rosario is that they have the talent availability because of the universities,” said Juan González, ICT Industry Manager at Frost & Sullivan. “Certainly we believe that there is a suitable pool of programmers and developers.”
The local education system, with some at least six universities and nearly 78,000 students, is a major advantage for all companies. The main school, the Universidad Nacional de Rosario, is one of the top universities in Argentina and offers strong engineering and business degrees. Universidad Austral is another leader that is one of many that NEORIS maintains relationships with. It also maintains its own “training center of excellence” that hosts more than 200 students each year — many of whom get their first real-world experience on-site at the office.
Through such programs, and others including “NEOfrontiers” and “NEORIS Thought Leaders,” the company has been increasingly reaching out to the student community to help develop the local talent pool. And now, programs that started five to 10 years ago as corporate social responsibility initiative are also driving employment. Just today it will host 10 students for a job-shadow program, as well as dozens others in offices from Miami to São Paulo, in a joint initiative with education NGO Junior Achievement.
Carlos Amaral, director at Alsbridge, suggests that getting involved with the young community of developers can be a good inroads for companies looking to set up IT operations in Rosario. “There is a good number of resources available, plus the local universities can provide ongoing talent,” said Amaral. “A good approach would be to develop a delivery center there to establish relationships with the main and secondary universities.”
He also highlights the non-educational draws, most notably the fact that Argentina offers several tax incentives and tax-free zones benefits. There are also available benefits for companies performing software development.
The Vast Challenges in Rosario
Rosario is not without its drawbacks, however. “Location, location, location,” is the biggest, according to Amaral. “It is only 45 minutes by air from Buenos Aires. But by car, rail, or bus it is about four to five hours. After a long trip from the U.S., arriving in Buenos Aires and then having to take another flight may not be ideal.”
Such issues have meant that NEORIS has had to learn to work with smaller, local firms as well as get used to working with the bigger enterprises in Buenos Aires from afar. “The big challenge was to learn to work in a remote mode because most of the companies are still in Buenos Aires,” said Donzelli.
Transportation logistics aren’t the only problem with Rosario’s location. While the city has a large population and advanced business sector, it still is tiny compared to the capital. This has always been an issue for NEORIS. “Though Rosario has developed as one of the economic centers, Buenos Aires is still the headquarters of most big companies,” said Donzelli.
Because of this, Rosario has to deal with tough regional competition while lacking the major draws that larger cities can offer. “For IT and BPO services, Rosario would compete with Santiago, Chile, which is a stronger and more established center for services requiring Spanish speakers,” said Amara. “Brazil would also offer alternative options.”
Then comes the elephant in the room for all locations in Argentina: the economy. The situation has been dire for years now as the nation has defaulted on debt and the exchange rate has reached ever-falling levels that seem preposterous in a country this developed. The hope now, however, is that the looming end of the tumultuous tenure of President Cristina Fernández de Kirchner after recent elections this fall. “Argentina is now going through a period of uncertainty,” said Slelatt. “Post-election there should be more stability and predictability, which should provide a better outlook for operations.”
NEORIS has been able to navigate through the economic landmines, largely because much of its work comes from overseas. “Of course, we have business here in Argentina, too, but we think we can mitigate this economic trouble with our exports to other countries,” said Donzelli. “We are not so vulnerable to the economic situation in the country. I think that an important thing on this point is that the export of knowledge-based services is the third-biggest export in the country. And this will continue to grow in the next few years.”
In addition to the general growth in knowledge-service exports for Rosario, NEORIS sees great potential for growth serving the agribusiness sector. It is such a large part of the economy in the region that ongoing development seems inevitable, and the company is making a push to make this a larger part of the portfolio in its Rosario office. “Rosario as a nearshore destination will continue to grow in the next five years,” said Donzelli.
Globant agrees. “The city will evolve and grow as a technology hub,” said Lanati. “I believe that the amount of students in the city will continue to grow and there is a wide variety of companies locally based. This means that we will have more talent with more access to opportunities.”
With location, competition and — most of all — economic challenges, Rosario is unlikely to become a huge IT services destination in the next few years. But it has a strong educational foundation and enough tech presence already in the market to make many optimistic about its ongoing development.
“Rosario is no different from every other city in Argentina,” said González. “We expect that if the upcoming government makes some economic changes — currency exchange rate, investments, export policies, etc. — there is only room for improvement.”
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