Latin America:

The Future of US Nearshoring.

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Digital Knights is a Berlin based tech concierge service connecting startups, corporates, and entrepreneurs

with pre-screened tech resources.

Because the right team is everything.

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Hiring in-house engineers. Yep, it’s still as expensive as ever

- especially in the US.

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Did you know the average salary of an entry level software engineer in the USA is

$72, 790?

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Not to mention how long it takes to hire one...

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… it can take years.

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And even then, how do you stop your team getting bored or turning

down an o�er from a larger company?

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So, what are businesses doing to overcome these hurdles?

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Outsourcing.

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Or, more specifically: nearshoring

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Nearshoring is becoming a super attractive option for American software companies who need extra resources for their digital needs.

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For the US, Latin America is becoming a logical destination for this outsourced

development.

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Quality engineers, English proficiency, and governmental assistance are helping transform

Latin America into a nearshorers’ paradise.

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In fact, according to the A.T. Kearny Global ServiceLocation Index, 5 Latin American countries now

rank in the top 20 for o�shore partnerships.

Brazil - 4thMexico - 8thChile - 9th

Costa Rica - 19thColumbia - 20th

2016 GSLI Rankings

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Not to mention the average corporate tax rate is a full 12.71% lower than the USA.

Latin America: 27.29%US: 40%

EU: 22.09%

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And Latin America’s Ease of Doing Business Index has been increasing year on year:

Mexico: 73.72 (38th)Peru: 71.33 (50th)

Costa Rica: 68.55 (62nd)

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On StackOverflow, Latin American Programmers rank very highly, so it would appear the

knowledge is there.

But what about practical application?

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LocationsCountry Profiles and Competencies

Brazil’s Tech scene is booming despite a tough economic recession. The Brazilian software and IT services industry reached $22.4 billion in 2009, and the government o�ers incentives for o�shore work, such as income tax breaks for spending on workforce training and R&D.

Brazil

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Guadalajara, Mexico’s ‘Digital Creative City,’ is being dubbed ‘The next Silicon Valley,’ thanks to government subsidies and a�ordable talent which is attracting foreign tech giants.

Remote teams in Mexico are 20% cheaper than their US counterparts.

500,000 professionals within IT (2014) and established Universities producing plenty of new computer science graduates each year.

Mexico

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Costa Rica’s IT labor force has been growing 6.5% every year since 2005 and 6000 IT literate students graduate every year, adding to an already impressively educated population.

IBM runs a program to help universities shape their courses specifically for the IT sector.

All this has added to an active developer community, regularly hosting hackathons and encouraging women’s involvement in tech.

Costa Rica

The software development sector has shown an average growth of 11.5 % annually, becoming one of the most solid and reliable economic sectors of the country.

However, changing fiscal policies can still make it di�cult to invest in Argentina, and has put o� a lot of potential investors.

Argentina

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A growing economy, initiatives such as The Jala Foundation, and governmental support are making Bolivia pretty attractive for outsourcing IT.

Bolivia

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$6.8bn software and IT services industry.

13,000 IT Graduates each year.

A key market for the Latin American outsourcing operations of several multinationals, including HP (NYSE: HPQ), Citibank (NYSE: CB) and Siemens, as well as BPO firms such as Teleperformance and Capgemini.

ITO represented ~40% (37.9%) of the outsourcing industry.

Colombia

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Start-Up Chile, an investment program in the country lets you apply for $30,000 to start a business.

Chile also has investChile, which operates to increase foreign direct investment in Chilean companies.

Chile

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Quality of teams

Many Latin American teams that specialize in mobile app developmentand web development have strong qualityratings and impressive testimonials on Clutch.

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Industry Improvements - Internet Acccess

9 million 4G lines are in Latin America

75% of the region will be covered by 2020

High-speed mobile broadband accounted for 32% of mobile connections in 2014, set to rise to 68% by 2020

Satellite and telecommunication providers will start deploying resources to allow remote wireless access to rural communities in Latin America

Telefónica group has invested $6 million and is about to invest a further $30 million for satellite receivers and other equipment to provide connectivity on aeroplanes.

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Time Zones

Overlapping time zones mean:

Better daily communication and Agile methodologies such as SCRUM can be utilized e�ectively.

This is a lot better than the 13.5 hours di�erence for India and 7-8 hours di�erence for South East Asia

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Culture similarities and di�erences

The continent shares many similarities withEuropean culture and has more in common with

the US and Europe than India and China.

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Latin American countries have improved their national English proficiency rating according to EF

English Proficiency Index 2015

Latin America now lies on the global average for English proficiency

This is a significant improvement from when the index began back in 2011

English Proficiency

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Argentina

Colombia

Costa Rica

Brazil

$25 - $49/hr $50 - $99/hr $100 - $150/hr

Mexico

Uruguay

Pricing for Teams

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Argentina

Colombia

Costa Rica

Brazil

$25 - $49/hr $50 - $99/hr $100 - $150/hr

Mexico

Uruguay

Chile

Pricing for Teams - Web Development

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SourcesUS Software Engineer Salaries https://goo.gl/BYtx65

Talent Acquisition Timeline https://goo.gl/U91UxaA.T. Kearny Global Service Location Index https://goo.gl/EizHOU

Ease of Doing Business Report 2016 https://goo.gl/4Ebj7gStackExchange Users https://goo.gl/26thcR

Brazilian Software and IT Services https://goo.gl/bFs3UEGuadalajara, Mexico. https://goo.gl/zXN6dE

Costa Rican IT Education https://goo.gl/1Y1M1ICosta Rican Hackathons https://goo.gl/RbhXOx

Bolivia’s Economy https://goo.gl/5CEeFwThe Jala Foundation https://goo.gl/s9Rq8m

Bolivian Government Support https://goo.gl/a0z5P8Colombia https://goo.gl/hbhjed

Colombia’s ITO https://goo.gl/M8oI6xStartUp Chile https://goo.gl/�nRjRinvestChile https://goo.gl/RqdSxb

Clutch https://goo.gl/nte7Z0Industry Improvements https://goo.gl/gpdwyO

English Proficiency https://goo.gl/hg80T3Freelance Pricing https://goo.gl/vmGsDu