NSAM STAFF REPORT
Argentina has had its share of economic and political disruptions during the last year, causing growing uneasiness about investing in the country. Still, the country remains an appealing destination for outsourced services, largely because of its well-educated and entrepreneurial population.
We checked in recently with three top outsourcing service providers (Belatrix, Teleperformance and MakingSense), and asked them point blank: With Argentina’s recent ills, what corrective measures are necessary to put the country on the right path for ITO/BPO services?
Agustín Grisanti, South Cone CEO for Teleperformance says more effort should be placed on improving policies in the ICT sector. There is an urgent need to boost the service sector and commit to a long term strategy to grow it further. Diversifying Argentina’s exports structure with the introduction of initiatives that encourage the services export market could add major value to the economy, he stresses.
To acheieve that goal, Grisanti suggests these initiatives:
a) Human Capital Endowment: Along side technology and university education, professional training courses should be introduced to generate stronger human capital for the service sector. This would add greater value to the country’s ICT workforce and positively impact the quality of services. Another key initiative is to improve foreign language training for laborers.
b)Labor Flexibility: Offering internship programs to workers from medium and small companies is also important. This will help expand the supply of high qualified human capital. Such programs would especially benefit small and medium service exporters, instead of just a few big players. Such programs should be launched across the nation, instead of just a few main cities.
c) Incentive and Promotional Programs: These are stronger incentives the government should introduce to further develop the national services industry. Such programs would provide instruments to reduce taxes – including social tax – in addition to lending for investments.
d) Creating a Service Industries National Office: This office would be in charge of providing incentives and running promotional programs. This should help create a market for trading equipments and technology, besides expanding telecommunication network infrastructure and monitoring the regulatory environment for the services sector. It would also take care of implementing a marketing plan to better position Argentina on the global stage.
“All strategic initiatives must be planned for the long run,” says Grisanti. “They have to be independent from the current administration and transcend any political ideology. These measures will produce durable competitive advantages that cannot be easily imitated by other countries.”
Argentina has a rich international business heritage and a reputation for being the leading ‘European’ country in South America. This cultural affinity and natural timezone alignments are important factors for foreign companies to outsource jobs to its citizens. Luis Robbio, CEO for Belatrix Software Factory sees significant upside potential for Argentina to better position itself within the nearshore ecosystem.
“Argentina’s government needs to promote a business friendly climate with economic incentives for international businesses, emphasizing Argentina’s ability to deliver higher quality services at cost-effective price,” he says. “Incentives might include financial support for trade visits for Canadian and US corporations. This allows Argentina companies to cast a wider business development net. These tours might extend to the global IT analyst community.”
Government should make sure that there will be minimal impediments to doing business, Robbio says. “To support this, the government should lift the communications infrastructure to global standards. This includes decreasing bandwidth cost and removing import barriers on select types of computer equipments. Other ideas might be to encourage more English business press coverage, for easier global market visibility.”
Graduating more engineers and technology professionals should be a major part of the strategy, he adds. “Thanks to earlier government investments (e.g. computers to high school students), there’s been an uptick in engineers. Academic initiatives and programs like Control+F, which provide technology training to high school graduates, should be increased in number,” says Robbio.
Furthermore, to compete against India’s NASSCOM, Argentina should strive to become the center of South America’s technology industry. “With the partnership of government and private enterprises, Argentina has significant potential to gain market share and grow its Nearshore brand, ” says Robbio.
The Way Forward
A good place to start is to examine successful models used by other countries. “There are a few examples that can inspire Argentina’s own marketing strategy on its way to becoming an preferred IT outsourcing destination,” she says. Organisations doing good work in the continent include: Invest in Bogotá, Procomer of Costa Rica, TechBA in Mexico, ProNicaragua and Startup Chile.
“Argentina should do what these agencies are doing: promote, provide thought leadership, give access to accurate research and build key relationships,” says Medica.
There are three organizations in Argentina – Cessi, Exportar and the Ministry of Foreing Affairs – which should lead these kinds of actions, she says. There are some initiatives coming from them, like the CESSI’s commercial mission to Texas and Georgia, but there is still a long way to go.
Launching public relation programs, such as organizing trips to Argentina for journalists and important business executives, will get Argentina the attention it truly deserves.