Latin America Advisor

A Daily Publication of The Dialogue

Can Latin America Meet the Demand for Tech Talent?

Tech companies in the United States are increasingly looking to Latin America and the Caribbean to fill positions. // File Photo: NegativeSpace. Tech companies in the United States are increasingly looking to Latin America and the Caribbean to fill positions. // File Photo: NegativeSpace.

Demand for software programmers, engineers and developers in the United States has skyrocketed in recent months, and U.S. tech companies are increasingly looking to Latin America for its talent. The trend seems to run counter to concerns from economists and education experts who say the region has lost years of learning due to the pandemic, with only 30 percent of students meeting minimum standards for science, according to the World Bank. The bank has also warned that the region is heading into the Fourth Industrial Revolution seriously unprepared and lacking engineers and technical expertise in key measures of innovation. What is the state of technical expertise and STEM skills in the pool of human capital in Latin America and the Caribbean? What can educators and governments do to pair up skills with employers’ needs so that the region can reap more of the economic gains from its investment in education? What support do tech entrepreneurs most require in the years ahead, and what kinds of initiatives have been most successful in helping to grow tech businesses in the region?

Sarah Stanton, program manager of the Education Program at the Inter-American Dialogue: “Well before the Covid-19 pandemic hit, experts had documented the challenges faced to educate, train and hire the next generation of STEM leaders. From a demand side, employers reported significant talent shortages in these fields, and official projections anticipated notable gaps between qualified graduates and open positions. On the supply side, higher education students in Latin America and the Caribbean are less likely to study STEM fields than their counterparts in other regions, despite high demand from employers. The pandemic has shown that these challenges begin even before young people are thinking of getting a job. At the most fundamental level, connectivity remains a significant challenge, and technology skills are not fully integrated into national curriculums across disciplines. These are important first steps so that all students graduate from compulsory education with a basic familiarity in STEM concepts. The solutions to these challenges cannot be the work of educators and governments alone; private-sector employers also play an important role. The most effective partnerships are built around long-term, shared goals. For example, apprenticeships should be a key component of technical training programs, and employers should build close relationships with these institutions. Agencies such as Colombia’s SENA, where sectoral roundtables bring together diverse actors to address skills challenges, are a useful model. Countries can also learn from one another through regional exchanges focused on skills development. The 100,000 Strong in the Americas program is an example of how to promote hemispheric learning and local capacity building with private sector support.”

Craig Dempsey, CEO and founder of Biz Latin Hub: “We get approached a lot by U.S. tech companies, especially small- and mid-sized companies, that had not considered looking for nearshore talent before Covid. And we’ve found that companies are a lot more open to hiring in different jurisdictions. Historically, small- and medium-sized companies would hire in their local town, and then after a while they would say ‘well maybe we could hire in a different state,’ then across the country. But Covid definitely opened a broader horizon for these tech businesses. They are looking to find talent within the region because they can’t find enough talent in the United States. To a lesser extent, there are two other factors: one associated with the same time zones as the United States and the second is about cost savings. But it’s driven more about the ability to find talent. Many approach what they understand to be the largest tech markets in the region: Argentina, Brazil and Mexico. In Mexico, it can be difficult to find tech talent because local and international companies have already snatched much of it up. Brazil and Argentina are quite bureaucratic and complicated, which is quite unattractive, and many firms don’t want to enter those markets. In Chile, Colombia and Peru, there is a reasonably large talent pool. In smaller jurisdictions such as El Salvador, Guatemala and Panama, there is a surprising amount of talent in a small talent pool. When tech companies look at these markets, they can generally find the talent; however, there are some drawbacks in those markets. The first is English. While you can find suitable tech talent, often you can’t find it with English ability. Without English ability, the tech talent is more likely to be put in roles that are not client-facing. There are limitations both on how the company can employ this person and limits to what kind of salary they are willing to pay. Possessing the talent but not the language skills means that companies need to hire a bilingual person to be paired up with local talent.”

Silvina Moschini, president and founder of TransparentBusiness, founder and chief executive officer of SheWorks! and executive producer of Unicorn Hunters: “The global pandemic unleashed an unprecedented digital transformation that has placed a major strain on the global talent marketplace. The region became a major source of remote talent for technology companies around the world—from engineers in Argentina, to UX designers in Colombia, to front-end developers in Mexico. At the same time, the region’s entrepreneurship ecosystems are thriving like never before. According to Crunchbase, Latin America was the fastest-growing region in the world for venture funding in 2021. As a result, there are greater opportunities for the workforce on a global, regional and local level. But for workers and economies to reap the benefits of this unprecedented growth, there is a greater need for unique skills that empower them to compete in this technologically advanced digital economy. There is a need for workers in STEM-related fields—developers, engineers, scientists—as well as for skilled and certified workers in fields such as marketing, design and e-commerce. And there is a growing need for soft skills that enable workers to succeed in virtual working environments as they are now competing with the world, not just the workers in their city or country. Public-private partnerships and investments in early and higher education initiatives that inspire an interest in the STEM fields and encourage graduates to pursue college degrees in related areas are essential to growth. An example of a public-private partnership that is making that commitment is the alliance between the SheWorks! Academy, the Colombian government and SENA (Servicio Nacional de Aprendizaje, in Spanish), all of whom have come together with the goal to ensure that women lead the country’s digital transformation. The partnership offers virtual training in digital upskilling and certification in technical skills that foster entrepreneurship and leadership. Through this program, thousands of women have received training that will help them gain employment in the new digital economy and become a source of talent for new entrepreneurial endeavors in the country and worldwide.” 

Latin America Advisor logo.The Latin America Advisor features Q&A from leaders in politics, economics, and finance every business day. It is available to members of the Dialogue’s Corporate Program and others by subscription.

Related Links

Suggested Content

Failing Grade

The goal of education is to promote learning. Sitting in classrooms is a weak proxy for knowing how to read, do math, and apply science. Latin America needs to worry less about schooling and more about learning.

˙Jeffrey Puryear