Kirk Laughlin, CEO of Nearshore Americas, kicked off today’s Nearshore Nexus Conference at the Crowne Plaza in New York City by stating nearshore outsourcing has gone from “novel to mainstream.” Laughlin promised that conference speakers would illustrate how outsourcing destinations in Latin America and the Caribbean are “no longer in the shadow of India or China,” but have instead become vibrant providers of sophisticated IT and business outsourcing services in their own right. The first speaker, former President of the Republic of Colombia Mr. Alvaro Uribe, delivered on that promise.
Uribe Highlights Positive Developments in Latin America
Rather than focus exclusively on Colombia (although he did touch on how Colombia has transformed itself into a stable, secure democracy which attracts foreign investors), Uribe highlighted positive social, political and business developments in the Latin American/Caribbean region as a whole. The region has about 600 million people with an average age of 28. While 170 million people are in poverty, another 40 million have left poverty in recent years and Uribe classified 64% of the region’s population as members of a “progressive middle class.”
Uribe stressed that with a few exceptions, Latin American countries now abide by the “rule of law” rather than dictatorships. “Public indebtedness, defaults and hyperinflation are the province of the past,” he stated. Uribe also highlighted Latin America’s extensive natural resources, including 30% of the world’s oil resources, 26% of the world’s beef, and a potable water supply expected to account for half the global total in 2030.
Moving to human and political resources, Uribe stressed that with a couple of exceptions such as Venezuela and Ecuador, Latin American countries are following the example of Colombia in creating a “triangle of cohesion” based on security, free investment, and social cohesion. Uribe’s prepared remarks led directly to a Q&A session with CNN Senior Latin Affairs Editor Rafael Romo, who began with a question about the message Argentina’s recent decision to nationalize its leading oil company YPF.
“Maybe Argentina has made mistakes,” said Uribe. He said Argentina is privatizing key elements of its oil industry because of concerns there is not enough exploration, but would have been better served by discussing the matter with private industry. “In Colombia and Brazil there is a middle ground,” he said. “The government has an important role in oil production, not a monopoly.”
During his conversation with Romo, Uribe also discussed some of the specific ways Colombia has bolstered its BPO industry. “We consulted with private industry and identified five or six sectors where Colombia would become world class (including BPO),” he explained. “We had 2,000 BPO jobs and now have close to 100,000.” As part of its efforts to boost Colombia’s BPO industry, Uribe said the government eliminated the value added tax (VAT) on business services and is working on advancing education to provide workers with skills BPO and ITO buyers require, including by offering free university education to poor citizens.
Uribe also said he thinks Latin America should approach education on a regional, cooperative basis. “Twenty-five years ago, economists recommended countries in Latin America needed to change from commodity-based to knowledge-based economies,” he said. “They need to do the same today to add value to commodities.”
Eliminating the Software Factory
In the morning keynote, Leonardo Matiazzi, VP of International Business for Ci&T, said it is time to eliminate the “factory approach” to software development. “IT is the one industry that can change the world,” he said. “The mental model organizations use to develop software is optimized for mediocre results. It won’t be a total failure, but will be mediocre.”
Matiazzi compared developing software to writing a book. “Can you write a book by copying the first page 250 times?” he asked. “Try and come up with a book writing factory. You can’t. Writing software is the same as writing stories. You’ll end up with a dull book nobody cares about, just like you end up with dull software nobody uses.”
Matiazzi acknowledged moving away from the “software factory” model will be difficult, but necessary. “It’s not easy to throw away,” he said. “The concept has been part of the IT culture for so long.”