LATAM: Why the region is rapidly becoming a hub for software development
Last week we looked into nearshoring, a concept related closely to outsourcing yet with geographical advantages that further enhance the pull factors to it. One of the predominant sectors this idea has the potential to cause explosive growth in is software development, especially as foreign businesses look to increase their digital presence following the pandemic. This all comes back to one key idea, connectivity, as increased satellite coverage and cost-effective innovative measures designed to widen the metaphorical net of people able to expand their digital footprint present a landscape in which development companies can thrive. Latin America is one such example of this, as the region has seen an influx of foreign investment as well as already possessing an extremely high-quality workforce in the IT industry, the two of which combine to create a development hub in a geographically strategic location for businesses both in Europe and the United States looking to develop software overseas.
Evidently, each business looking to develop their own software will have their own specific requirements and needs, making this industry extremely dynamic as well as also presenting unique challenges to the companies creating the programs. Specifically, software development is the writing of computer programs for a client in order to assist their business operations and facilitate growth. There are three kinds of software development, system software, application software and programming languages. The former of the three is not what we are discussing today as such, mainly due to its scale and the last of the three is an underlying and integral element of all development, leaving only the middle option, application development for us to explore in more detail. In essence, it is the creation of software for computers and phones, apps, which we are all familiar with.
With regards to the numbers and the scalability of this market, it will come as no surprise that it is already massive. If we look at the application development side of things on a global level, in 2020 the market value was US$130.29 billion, an impressive figure which by 2025 is set to surpass US$199.75 billion, increasing by almost US$70 billion in only 5 years and having more than doubled in value since 2016. It is clear that there is market potential to be explored and made the most of by foreign businesses looking to outsource their software development, but the largest part of the process is finding the right place to do so, which is where Latin America comes into the picture.
While many nations in the region are possible candidates, there are some that stand out above the rest as exhibiting the perfect environment for software development for your business. One of these is Argentina, and for those of you who read our blog you will remember we did a country specific post on outsourcing tech services to Argentina a little while ago, so we will not be covering it again here, though it is worth taking into account the endless opportunities on offer in Argentina and if you are interested you can find the article on our blog. The other countries to consider are Brazil and Panama, who each have their own stand out factors for you to decide between when making your final judgement.
Brazil: Number one in Latin America and number thirteen overall globally for software development outsourcing, it is clear that we had to include Brazil in this article. One of the most interconnected nations in the region, Brazil is only ever a direct flight away from the US and Europe, making outsourcing not only convenient, but also a necessity. It is also said that there are over 400,000 software developers in the nation, and so the idea we mentioned earlier of each client having their own specific requirements, it is likely that a business of any size involved in any market would be able to find someone capable of assisting them.
Panama: Our other example of Latin American software development is Panama, a smaller nation than Brazil however with other characteristics that make it stand out, such as the economic growth unmatched by other nations in the region or the developing IT sector. Now, one key to outsourcing is the cost, as this is one of the underlying reasons to outsource in the first place, and Panama has some of the lowest in the region relative to the quality of the service, as well as also being conveniently close for nearshoring with the US.
So, if you are interested in finding out more, get in touch with us today! At Creimerman, we are a team of global citizens, working with each client and providing a tailor-made service in order to help make their cross-border ventures a success, and we would love you to be the next.