Global tech market realises Latin American’s worth

Latin America is undeniably a fecund place for tech industries veering towards the green side.

Even as early as 2014, Gavin O’Toole of The Guardian has declared this, and in turn, has somewhat magnified the region’s enticing industry milieu even to “not-totally-green” tech but big brands.

Just recently, tech giant Google announced that it would be putting up its sixth digital entrepreneurship facility — or campus — in São Paulo, Brazil in February. It will be monumental for the Latinos since it’s the firm’s first headquarters in the region.

Its chief rival Apple, meanwhile, has expanded its traffic data technology in Mexico alongside Hong Kong just this January, giving Mexicans a finer, street-level version of Google’s very own Street View. This was also the month when Apple skipper Tim Cook confirmed that the rumours on building the very first Apple retail store in the country was true. Now, the company is mulling over having more retail stores in the region as it brings iAD, an advertising platform for apps, in Lima (Peru), Buenos Aires (Argentina), and Santiago (Chile).

Facebook honcho Mark Zuckerberg, on the other hand, chose Chile last October as one of the first countries where Facebook Reactions Emoji would be rolled out officially. South Korean mobile phone manufacturer Samsung, meanwhile, has beaten Apple’s online pay services by quick-expanding its own Samsung Pay to Brazil, an area that also appears to be enticing for car-hailing app pioneer and P2P model leader, Uber. UberPool just recently made its debut in Mexico City and UberCash hit Peru this year.

So what makes Latin America an attractive place for these Silicon Valley giants?

The region has radically transformed from its dictatorship and poverty-ridden image into a vibrant ground for commerce. More than six countries in the region have their GDP catapulting to the unimaginable, with the likes of Fitch, Moody’s, and S&P tweaking their respective debt ratings for each country into investor-worthy. Chile, Colombia, Brazil, Mexico, Peru and even Panama are now among the six countries with giant, continuously expanding economies in the region, not to mention the others — Argentina and Uruguay, for instance — coping and catching up with the rising GDP trend.

Improving economy means growing labour force, which is synonymous to more stable and better jobs. This, in turn, gives people enhanced buying power, making them more capable of buying gadgets or paying for access to the Internet without sacrificing daily needs such as food and shelter, which is a grave problem in Third World economies. Tech companies like Facebook benefitted from this, as the growing number of Latinos gaining access to the Internet and obtaining smartphones help expand its user base by 20 percent in 2013 , a number that is continuously growing today, according to Social Media Today.

It’s big enough that even niche market players see a space for themselves in the region. 5BARz International, a network extender provider that launched its operation in call-drop beleaguered India in 2015, is now planning to expand its operations here. “Like Southeast Asia, whose economy as a whole speaks of potency and promise, Latin America is the region to put focus on. For tech firms, especially us in the telco-Internet niche, ignoring the current economic growth in Brazil, Peru, especially Mexico, is utter folly,” said co-director and former Apple executive Gil Amelio.

The company, which is known for its revolutionary radio frequency-based plug-and-play technology, would like to capitalise on the possible lag the region might experience in terms of utilising 5G network by 2020. “The region would catch up, for sure, but we’re ready to take the challenge in case that would take time. We would like to help mobile consumers there as network carriers improve their infrastructures and systems,” Amelio added.

Even relatively smaller players have experienced the vast improvements in the region’s tech environment. Mergers and acquisitions (M&A) among expanding local companies have become trendy in the past few years, with private equity and venture capital firms producing more than U $10.39 billion (AU$14.35 billion) worth of investments, according to the Latin American Private Equity and Venture Capital Association (via the Middle Market).

This January, for instance, digital marketing firm Reamp has announced its acquisition of another Brazilian firm Ocapi, enabling both firms to earn R$19 million (AU$6.65 million) in 2016 plus a portfolio of 50 clients that are worth R$950 million (AU$333 million) in transactions.

Apart from allowing more Latin American cities to be catapulted to global tech consciousness, the current boom is not just about investors and brands. By 2020, as tech entrepreneurs in the region themselves say, the region will experience great transformation that would cover not only the business sector.