The services business is a people business. Until very recently, Latin America was known more for minerals and goods than superstar mobile development businesses or globally-tuned finance back office operations. In other words, Latin America has not geared its economic engines to the high-performing knowledge worker. And that could become a very big problem for the region.
The risk of course is that Latin America will be a victim of its own success – unable to contribute a steady supply of well-training individuals to meet both domestically-focused and globally-geared industries. One of the most startling pieces of data is that fact that over 30 million individuals between the ages of 15 and 29 are not working or are not in school. By comparison, that would be the equivalent of having the entire populations of Texas and Arizona going without a job and not sitting in a classroom.
Without a supply of labor to keep up with the region’s dynamic economies, severe economic consequences could unfold. Wages and attrition would rise, and companies would have a harder time competing in the global marketplace because of performance and productivity lapses. To put it plainly, Latin America would miss its great chance to stand on equal footing with the rest of the developed world.
This issue – the concern that human capital will need to meet the vast demand about to be brought to the shores of Latin America and the Caribbean – is a unifying concern, when you stop and think about it. So much of the time, investors, buyers and government leaders are preoccupied with their own parochial worries about their own city or country. However, it is bigger thinking and more ambitious leadership that is required to get a sense of what’s truly at stake.
That’s one reason we at Nearshore Americas are always trying to check in with the agencies that are trying to make a difference – across the region. One of the most notable groups in the Inter-American Development Bank, whose chief of investment unit for services, Fabrizio Opertti, spoke to me on camera a few weeks ago to talk about the significance of services for the bank. (The video can be seen here.)
Opertti’s and his colleagues have a massive challenge in front of them. They are work with several trade promotion groups in Colombia and Uruguay, and also increasing the number of programs targeted at developing a larger pool of qualified workers.
But, the key question is – how is the bank going to get unemployed but capable youths integrated into the business environment of their home country?
Opertti says the bank is trying to ‘align’ and ‘matchmake’ between employers and human capital pools, primarily through the establishment of finishing schools. The content of the training models is established by the employers and attracts professional students of virtually any age.
“We have to increase the amount of youth ready to be employed in the services sector.. you have to increase the supply because there is great demand.” Opertti stresses that the private sector is an integral part of the creation of a better prepared youth population, by having a key leadership role in finishing schools.
Other groups such as the World Bank and USAID are also active in the area of human capital development, but most of the time programs are small and tightly targeted and may not last very long.
Is the Nearshore ready for the next wave of hiring? Collectively, it’s something we all should be thinking about.