Colombia is about to become the world's biggest 4.0 Industry's Market.
When thinking about the 4.0 Industry, Latin America is probably not the first thing that comes to your mind. But Colombia’s president Iván Duque has set his mind in changing that.
The government has been realizing for years that the solution to their high unemployment levels, lack of new technology adoption in businesses, and high production costs is simple: empowering the 4.0 industry in the country. They are aware of the competitive advantages of Colombia, which lie on aspects such as:
- Strategic location – link between North America and South America.
- Extensive network of trade agreements - that allow them preferential access to more than 60 countries and 1.5 billion consumers around the world.
- 50 years of sustained economic growth.
- Infrastructure that provides high connectivity through optical fiber - they are the second country in the region with the best connectivity, transmission and stability, connecting 98% of the municipalities with the world.
But they recognized it was not enough, and therefore have been working hard for the last ten years to make of Colombia the most innovative country in Latin America. And they succeeded.
In 2013 the Wall Street Journal chose Medellín as the “World’s most innovative city”, over New York and Tel Aviv; it currently occupies position number 9, among the 10 main developing economies receiving foreign direct investment (FDI) and position number 23 in the world; and between January and march of 2020, the exports of Colombia’s 4.0 industries reached USD 160 million, with sales to more than 75 markets. And that’s just the tip of the iceberg. President Duque’s goal is for Colombia’s GDP to grow between 3.6% and 4.0% in 2021, to be among the top 20 the 4.0 services exporting countries by 2022, and that investment in Science, Technology and Innovation activities (ACTI / GDP) will be greater than 3% of GDP for 2023.
But, how are they going to manage to do that? They already are. The National Government has recognized the digital revolution as an important growth engine, for which it has adopted new policies, conventions and agreements for digital transformation throughout the territory. They are laying the foundations for a new growing movement of startups and entrepreneurs in an increasingly profitable market. President Duque has stated that the country has a growth projection of more than 4.5 percent in the next 18 months, and that one of their bets to achieve that goal is to encourage the creation of startups focused on the different technologies of the Fourth Industrial Revolution. And as a consequence, this month a national entrepreneurship policy was approved, with the aim of increasing the percentage of businesses created, improve the country's position within the region in the ranking of the Latin American Association of Private Capital and Entrepreneurial Capital (LAVCA).
And Medellín is taking everything this new paradigm has to offer. It has officially become the first Center for the Fourth Industrial Revolution (C4RI), and is therefore part of the World’s Economic Forum network and its government has set up its plan to become the first eco-city in Latin America (with electric transport, reduction of CO2 emissions and greater use of clean technologies) and is focusing all its policies in making of it the region’s Sillicon Valley.
This ecosystem allowed the emergence of Colombia's first unicorn, Rappi. In 2018 the company received an injection of US $ 200 million from DST Global, Andreessen Horowitz and Sequoia, funds that are among the most respectable and profitable in the world; and Endava, a UK company that started to invest in the country in 2016, opening a software production center with 10 employees, and after 8 months, that number multiplied by 7. The company's investment plan contemplated four million USD for the first year, with a projection of extending over the next five years. However, after one year, its growth accelerated and the company acquired a new 5,000m2 center that allowed them to house 500 employees.
And these are only two successful 4.0 industries in Colombia, but the government is investing everything in providing resources, education and infrastructure not only to support those who decide to invest in the country, but to make it one of the top technology markets in the world.