Latin America - A 'Sambadrome' of Opportunities?
Posted by: Alex Mathews On May 26, 2011 03:25 PM
Tags: Industry Trends
I do believe that LatAm has a perfect storm brewing. For now starts the growth for a region that has experienced a lost decade. LatAm has strengthened its economies, its democracies and strategies. A young and burgeoning middle class is creating unprecedented domestic demand, and opportunities abound like never before. With Mexico, Brazil and Chile moving towards being popular IT/BPO off shoring destinations, competition in the global marketplace is more than warming up.
Both India and Brazil face similar opportunities and challenges with growing demands of the middle-income populations, alleviation of poverty etc. In fact, India can learn valuable lessons from Brazil, which through innovative schemes, has lifted over 30m people above the poverty line. With an abysmal 1% share of Brazil's trade (as compared to about 10% of China), I believe India-Brazil trade has just scratched the surface. India's rapidly-growing demand for commodities to sustain India's one billion plus population has resulted in several Indian companies expanding their trading activities in LatAm.
LatAm is rich in the natural resources that are lacking in India. With a population of 1.1 billion, there is potential for massive bilateral trade. India can look at manufacturing exports. The current challenges around high tariff rates and transportation are bottlenecks that both governments are working actively to resolve.
LatAm as an outsourcing destination for North America and Europe fits in perfectly - similar time zones, low attrition rates and one of the largest pools of Java/mainframe programmers in the world. Latin- speaking European nations prefer LatAm as the off shoring destination due to language complementarities.
The rapid acceleration of LatAm's economy is spurring growth in IT and Network spend, increased mobile/broadband penetration and large scale consolidation in the telecoms sector in LatAm. This offers vast opportunities for specialized Telecom and IT players like Tech Mahindra and Mahindra Satyam to play a key role. In fact, Brazil is very bullish on the 2014 FIFA and 2016 Olympics and this could well change the face of the nation.
Abundant manpower, rich natural resources, upcoming world class infrastructure are the ideal ingredients for a classic recipe, however what is lacking is the need to be supported by the fuels of home grown innovation, education, and entrepreneurship.
Arvind Malhotra and Harshul Asnani from Mahindra Satyam blog as they attend the World Economic Forum on Latin America.
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