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10 Reasons Why Latin America Is Great for Software Outsourcing

From cost-effectiveness to IT Talent, Latin America software outsourcing has caught the eye of businesses worldwide.

Nacho De Marco

By Nacho De Marco

CEO/founder Nacho De Marco established BairesDev in 2009. He is General Partner at BDev Ventures and the author of "IT Outsourcing to Latin America."

10 min read

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Software Outsourcing is a great strategy when it comes to developing high-quality products in a cost-efficient way. However, finding the right IT provider can be a bit complicated for many businesses—especially since outsourcing became a worldwide-phenomenon. In fact, many organizations are just starting to dive-in into the field and have no idea where to begin.

Thankfully, there are several ways to tap into the global outsourcing market. For starters, learning more about the most popular regions to outsource development will help to narrow searches down to a few technologically-prospering regions. Most US companies, for example, outsource to South America due to the many benefits this region brings to the table.

You can also check out all the information in this article in this more attractive PDF infographic we made. Otherwise, here’s our take on the matter.


Latin America Outsourcing

Let’s begin with the facts: Latin America has the fastest projected IT industry growth of any region, with a projected revenue growth rate of 5.3% for the 2020s, 2 points above the 3.3% global average. Currently, South America software development is leading the region’s industry, mainly thanks to countries like Argentina, Colombia, Chile, and Brazil.

The main region interested in Latin America outsourcing is, of course, North America. The United States, for one, has a growing need for skilled IT talent that it’s local resources just can’t meet. In 2020 alone there will be 1 million more jobs than global candidates in computer science fields. As a result, the best option to balance out the supply and demand is outsourcing to Latin America.


latin america outsourcing

Download PDF infographic


1. Cost-Effective

Outsourcing development to U.S. Software Engineers can cost anywhere from $80 to $150 per hour, while outsourcing to Latin America gives you access to Software Engineers that can cost between $40 to $70 per hour.


2. Time Difference

Outsourcing hubs like India have a large time change from North America, making it difficult to work on real-time projects. In Latin America, there is just a small 1-3 hours difference (ET), so briefings and project management are much faster.


3. High English Proficiency

According to the EF English Proficiency Index 2017, some Latin American countries have overtaken India and China in language proficiency and all of them are climbing in English level, with Argentina at the region’s top. Your company can take advantage of bilingual developers and project managers.


4. Tech Education

Argentina, Chile, and Brazil are the countries with the highest tech-education standards in Latin America. Argentina’s government program Plan 111 Mil to educate 100,000 new programmers in the next four years.


5. IT Talent

Stack Overflow provides numbers showing that there are more skilled programmers from Peru (24k), Colombia (21k), Chile (18k), Argentina (16k), and Brazil (14k) compared to other global IT hotspots like India (13k) and China (13k).


6. IT Industry Growth

According to a study by Frost & Sullivan there are so many successful companies providing outsourcing services that the IT industry revenues in Latin America have grown by 20.3% between 2016 to 2017.


7. Global Proximity

All the products made in Latin American countries can be delivered anywhere in the U.S. in less than 24 hours. When you outsource to south America, the proximity increases the convenience of the outsourcing industry compared to IT hubs in the Middle East or Asia.


8. Cultural Similarities

Outsourcing to the far reaches of Singapore or India can result in some misunderstandings that might require corrections, more expenses, and more time. English skills and cultural similarities make Latin America software outsourcing a smart choice for development.


9. Agile Framework

Mayar Brown partner Brad Peterson explains it best: “We see increasing numbers of clients deploying substantial negotiating teams working on an agile basis to close smart deals fast.” Outsourcing to Latin America is forecast to be the popular choice for Agile software development.


10. Big Enterprises Are Loyal Clients

The Latin American region is the preference of numerous big tech companies like HP and IBM. Reportedly, in 2018, Latin America software outsourcing accounted for 513 billion U.S. dollars of the entire nearshore outsourcing market.

Nacho De Marco

By Nacho De Marco

Nacho De Marco is the founder and CEO of BairesDev and General Partner at BDev Ventures. Beginning with bootstrapped investments, he led the company to become the largest and fastest-growing software corporation in the world. He is also the author of "IT Outsourcing to Latin America."

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