Colombia vs Argentina for Nearshore Software Development
The myriad of nearshore options in Latin America may leave you pondering which is best for your company. In this comparison, we will delve into two prominent contenders in the region: Colombia vs. Argentina.
Why Nearshore to Latin America
Latin America has emerged as a strategic hub within the technology industry, positioning itself as the optimal destination for outsourcing software development. The region offers a compelling combination of advantages, including cost-effectiveness, a highly skilled workforce, a favorable time zone conducive to real-time collaboration, strong cultural affinity with North America, a burgeoning technology infrastructure, government incentives, and unparalleled business agility. These factors collectively render Latin America an appealing destination for companies seeking enhanced efficiency, uncompromising quality, and heightened flexibility in their projects. Yet, the question remains: which country in Latin America stands out as the premier choice for outsourcing?
The comparison chart below highlights several relevant aspects when selecting technology outsourcing services. These elements include the level of English skills to facilitate effective communication between teams, geographic proximity to the U.S. to allow for more frequent visits and beneficial time zone alignment, government programs that reflect the country’s commitment and willingness to facilitate engagements of this type, and the overall digital maturity of the countries in question.
*According to Statista.com 2022*
Distance from the US
Government educational programs
20.000 scholarships, non specific program
Innovation labs, non specific program
Reputable universities and public institutes are focusing in tech.
AFDM Program and prestige, certified Universities across the country
Digital maturity /100
*According to EAE Business School*
Technology Industry Landscape in Latin America
North American companies are actively seeking viable options for nearshoring IT services within Latin America. Prominent among these options are countries such as Colombia, Mexico, Ecuador, Peru, Chile, Argentina, and Brazil, each presenting distinct advantages.
A few of the key drivers companies use to make nearshore outsourcing location decisions are outlined below as well as where each country currently ranks. These markers can help sway companies, but they are by no means the end all be all of the decision making process.
Argentina as a Trailblazer
The Argentine government’s longstanding commitment to fostering foreign investment in the technology sector is evident through its strategic initiatives. These efforts include educational investments, including a substantial allocation of over 60,000 scholarships for academic programs like the “Argentina Programa” and offering up to $100,000 Argentine pesos for the acquisition of computers and access to free internet, according to the official site of the Argentine government “Argentina Programa”. Such progressive initiatives have propelled Argentina to the forefront of the tech industry, establishing itself as a pioneer and significantly elevating the region’s global standing.
In addition, Argentina has one of the highest levels of English language in the region. As a result of the government mentioned above initiatives, it has opened the doors to foreign companies worldwide to contract its services.
Nevertheless, it is noteworthy that some major software development companies in Argentina have opted to relocate their operations to countries like Paraguay and Uruguay. This strategic move is driven by the pursuit of a more stable economic and political environment.
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Colombia as an Optimal Solution
Colombia emerges as an exemplary choice for nearshoring solutions, geographically positioned to foster seamless labor relations with North American countries. Its proximity, coupled with an extensive network of commercial flights, facilitates efficient virtual and in-person collaboration between teams located in both regions. Despite experiencing minor political turbulence, Colombia maintains economic stability, boasting excellent growth forecasts for 2024, as per the World Bank.
This favorable economic climate not only benefits the nation but also proves advantageous for companies nearshoring skilled labor in the technology sector, as operational costs remain significantly lower. Notably, the minimum monthly average cost of living in Colombia stands at USD$540, in contrast to USD$2,213 in the United States and USD$604 in Argentina, as reported by the latest survey conducted by the consulting firm Living Cost. This stark contrast represents a compelling opportunity for companies seeking enhanced profitability.
The Power of Education
The technology education landscape in Colombia is evolving into a sector reference. Renowned universities in the country are spearheading innovation in their academic offerings and establishing strategic alliances with academic centers globally. This steadfast commitment positions Colombia at the forefront of technological education, resulting in a growing number of young individuals actively pursuing higher education programs. Notably, by 2022, 54.92% of young Colombians initiated their higher education studies, as reported by the National Higher Education Information System (SNIES).
The robust educational model in Colombia has garnered trust from foreign companies, leading them to entrust their technological processes to Colombian specialists. The industrious and friendly culture of the country further contributes to the favorable positioning of Colombian professionals in the industry. It is noteworthy that global rankings, such as the IMD World Talent Report 2022, have recognized Colombia as the third-ranking available skilled workforce. This surpasses other notable nations like Argentina, Brazil, and Chile.
Hard-working and Adaptable Culture
The direct influence of American culture in Colombia is notably pronounced, owing to the country’s active participation in various commercial treaties and its geographical proximity, which expedites cultural exchange. This influence fosters a work environment where processes of integration and collaboration between teams are significantly streamlined.
In terms of working norms, Colombian law establishes a standard workweek of 47 hours, exceeding the full-time job requirements in the United States. This commitment to extended work hours aligns with the strong work ethic ingrained in the Colombian professional landscape.
Moreover, the emphasis on English-language proficiency adds another layer to the professional landscape. As a prerequisite for graduation from higher education programs, Colombians are required to undergo international exams certifying a high level of English proficiency. This not only enhances communication capabilities but also positions Colombian professionals as adept contributors in the global work arena.
Endless Opportunities in Software Development Nearshoring
The Latin American region presents boundless opportunities for software development nearshoring, and the choice of the ideal country depends on the unique needs of each company. Currently, Colombia stands out as a significant advantage in terms of both profitability and quality. Its strategic geographical position makes it an irresistible opportunity for companies seeking a cost-efficient and agile service.
For further insights and information about nearshoring in Colombia, we invite you to contact us. We provide comprehensive assistance tailored to your specific requirements.