LATAM Is Now a Leader in Software Development
There has been a surge in software development outsourcing companies in Latin America in the past few years. It is because technology is becoming increasingly important in everyday life.
The demand for software developers is more significant than ever, showing no signs of slowing down. As more businesses look to integrate new into their operations, they need skilled developers who can build both efficient and easy applications.
For that reason, many small businesses are turning toward nearshore software development companies in Latin America. technologies
In a specific Forbes article, Harry Stebbings stated it perfectly, saying that the great thing about investing in LATAM is that you are investing in items that improve the lives of 90% of the population. While mainly in the Western markets, you invest in merchandise that makes life 10% better for 5% of the people.
So, what is the driving force behind the lead in nearshore software development? Let us find out!
Reasons Why Latin America Is on the Lead for Software Development
Latin America has long been considered a backwater regarding technology development. Its Northern neighbor has long overshadowed it. But that is changing.
A new generation of entrepreneurs is harnessing the power of technology to solve some of the region’s most pressing problems. And with a growing talent pool, LATAM is finally starting to get the attention it deserves in the tech world.
There is a rise of new unicorns in LATAM. Previously in 2017, Latin America had only two unicorns, but the number rose to 34 in 2021 and 42 at the close of February 2022. Brazil had 21 being the lead, Argentina had eight and Mexico 7, and Colombia closed up with 2.
Also, there’s increased access to capital in LATAM. Venture capitalists are investing increasingly in Latin American startups. Crunchbase data shows that venture and technology growth investors put $19.5 billion into the region. So, this is more than triple the previous year’s totals, which were already record-breaking.
As a result, it had an excellent performance by worldwide standards. According to Crunchbase data for the six most significant geographies, Latin America was the fastest-growing region globally for venture capital in 2021.
And in fact, there are no indicators of a downturn. According to Crunchbase data, Latin American businesses raised nearly $450 million in the first two weeks of this year. Meanwhile, regional investors are confident that totals will continue to rise.
So, as Latin America continues to develop its tech ecosystem, it is poised to become a significant player in the global tech landscape.
Benefits of US Businesses Working With Nearshore Software Development Companies
Latin America has a low-cost labor pool and increasing talent. The region has the world’s highest concentration of engineers per capita, with over 475,000 software developers in Brazil, 223 398 in Mexico, and 64,000 in Colombia by 2018.
Businesses working with nearshores software development companies not only can they save money and time but are also able to leverage the growing technological talent pool.
What else?
Communication
Time zone variations, language obstacles, inferior quality, and low productivity are all factors that cause people to be hesitant about offshore development.
Recruiting a team of nearshore developers is an “in-between” alternative to hiring your workers and offshore developers. Nearshore development is similar to offshore development, but the engineering team is in your time zone.
Also, most South American countries have excellent English proficiency, compared to China and India, which have low command. China has about 1%, Brazil has 5%, and Mexico has about 4%, although Colombia ranks exceptionally low.
So, working with software developers who speak English as their native language makes it easier for both parties to communicate and collaborate effectively.
Costs
Companies often get caught up in saving money by outsourcing their projects overseas, but it does not always play out that way. Most projects end up costing more than expected. Onshore developers can generally charge much more for software development.
Nearshoring allows you to choose a location that fits your budget. There is a comprehensive poll to choose from regarding hourly rates. Hourly rates vary from $28 to $105, leaving out tax and fees from the seller’s services. It implies that you can choose between the cheapest options, such as Mexico, Columbia, and Peru, and more expensive options, such as Brazil, Argentina, and Chile.
In addition, according to a Deloitte Global Outsourcing Survey conducted in 2020, 87 percent of IT companies used nearshore outsourcing to save expenses. Researchers anticipate a $40.16 billion global outsourcing market by 2025.
Highly Skilled Workforce
Latin American workforce has a high degree of technical expertise. There was a significant increase in graduates in software development from the VC investment in LATAM. Brazil produces 227,000 STEM graduates yearly, while Mexico produces 130,000 engineers and technicians.
So, there are above a million senior software engineers in the region with a higher percentage of experience from US firms. Simultaneously, the number of junior and mid-level developers is rapidly increasing, ushering in a new age of software individuals in the nearshore business.
Conclusion
The software development sector in Latin America has exploded in recent years and is now responsible for billions of dollars in services exports. The region has become a leader in the field, with many companies choosing to outsource their software development needs to Latin American firms. This has evolved from the pros and cons of offshoring which has elevated the demand for LATAM.
There are numerous, but the most crucial factors are the region’s low costs, high quality of work, straightforward communication, and availability of skilled workers. With the right mix of talent and experience, Latin America is poised to continue its dominance in the software development sector for years to come.
Also, with the aid of appropriate tools and resources, Latin American developers will continue to produce high-quality software that meets the needs of businesses worldwide.
