In 2014, the renowned tech entrepreneur and Distinguished Fellow at Harvard Law School Vivek Wadhwa opened the Nexus conference with a keynote address that served as a call to arms for Latin America & Caribbean. His advice was clear:
“Lead the world, rather than follow.”
Wadhwa identified what he saw as a trillion dollar opportunity at the intersection of exponential technologies. He wanted the region to become an innovator and a creator of opportunities instead of simply being an importer of technology. Wadhwa saw the region’s potential as the US’ “automation workshop, its R&D center and exponential technologies back office”.
Eight years on from his speech, as Nearshore Americas gets ready to welcome Nearshore observers and decision makers to this year’s Nexus Conference (New York City, June 8-9th), we review whether Wadhwa’s suggestion was followed up.
How much influence have his words had in the region’s economy? How did his forecasts materialize? Has the region reached the state of prosperity that he believed it could? Here are some of his forecasts and how they’ve played out.
Forecast 1: “The future can look good for Latin America, if Latin America gets out of its own way”
Outcome: Wadhwa talked about excessive government regulation and what he saw in many cases as a stigma against entrepreneurship. This is an issue that continues to affect the region’s business climate. Across Latin America & Caribbean there is still a debate going on about the rightful role of state in the economy. A prominent school of thought in this debate still believes that governments should play an activist role to the detriment of businesses’ ability to operate. This is particularly true when it comes to new technologies. The political class in general still shows a lack of knowledge on these issues and affects the prospects for prosperity in the region.
Forecast 2: An accelerated increase in outsourcing needs
Outcome: The Covid-19 pandemic, geopolitical tensions between the US and China and particular business needs such as the shortage in talent supply, have increased outsourcing needs across the board. The region has been effective in taking advantage of this trend. Frost & Sullivan expects Latin American contact center market revenue to reach US$271.1 million this year.
Firms like itel, Teleperformance and Qualfon have been significantly expanding. The region keeps showing an ability to supply the talent and capabilities to support the companies providing BPO/KPO services. Since 2018, the Americas has ranked as the world’s largest outsourcing market.
Forecast 3: More seed money for startups and entrepreneurs
Outcome: By the first half of 2021, startups in Latin America & the Caribbean had raised US$9.3 billion, doubling the investment in all of 2020. Companies such as Softbank have heavily invested in the region’s entrepreneurs. Softbank created a US$5 billion Latin America fund in 2019 and additionally committed US$3 billion in 2021 to kickstart a second fund focused on investing in technology companies.
Latin America now has dozens of unicorns and a more developed venture capital ecosystem. Though in many countries there are still barriers to entrepreneurship, it’s never been easier to access seed money to start a business in the region.
Forecast 4: Technology education will allow the region to move forward
Outcome: This is a bittersweet issue. The Covid-19 pandemic added new problems to the chronic dysfunction in Latin America & the Caribbean’s educational systems. According to the United Nations International Children’s Emergency Fund (UNICEF), by September 2021 around 2 in 3 children in the region were still out of the classroom. This is a devastating fact, considering that many of these children will never go back to formal education.
At the same time, the region is constantly seeing the emergence of technology educational programs. Countries of Latin American & the Caribbean are not immune to the shortages of talent, but governments and academia have understood the importance of incorporating educational tools focused on technology in the curriculum. The role of the private sector has been decisive. Employers now fully accept that in-house reskilling and upskilling will remain as an essential component in employees’ formal training going forward.
Forecast 6: Business development opportunities in cryptocurrencies and the re-imagination of money
Outcome: Maybe the most exciting trend in Latin America & the Caribbean is the growth in financial technology innovation. Many countries’ internal laws still make it incredibly hard for people to get a bank account. In a region with high numbers of employment informality, access to financial services have traditionally excluded important sectors of the population.
No wonders that many entrepreneurs have focused on solving this problem. Startups like Nubank, Uala and Oyster continue to expand banking services to new groups of people.
The same happens with bitcoin and the cryptocurrency ecosystem. Latin America & the Caribbean have a growing community of crypto startups, specialists and enthusiasts building applications and platforms to expand the use of cryptocurrencies. A Latin American country, El Salvador, was the first nation on earth to allow bitcoin as legal tender.