Software Outsourcing in Chile: All You Gotta Know

Since the beginning of the software outsourcing boom, Chile’s IT industry has grown exponentially and continues to do so, even during the COVID-19 pandemic.

From the snowy Andes mountain chain to the Atacama desert’s arid plains,Chile is a geographically diverse, multicultural, progressive country with a solid economy and political stability, making it an attractive destination for organizations looking for software development services.

Let’s look at what makes this country one of the most innovative and competitive economies in the region and why software outsourcing in Chile has been the right move for many successful international corporations.

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Technological Advances and Investments

Since 2010, Chile’s IT industry has experienced steady growth. Even in times of COVID-19, the country was the third country in Latin America with the highest growth rate in IT (6.5%), following Argentina and Brazil, according to IDC Futurescapes.

Software development companies in Chile have access to several attractive benefits when settling in the country:

●       Tech Visa: IT companies in Chile can hire highly qualified professionals abroad, then acquire work visas in no more than 15 business days, enabling them to relocate talent extremely quickly.

● Free trade agreements with 65 countries, including the European Union, the United States, China, Japan, and the Pacific Alliance, which alone represents a US$3 trillion market.

●       The Eureka Network is the most significant public network for international R&D cooperation in 45 countries, including Chile.

● Incentives for training and different co-financing options to build technological infrastructure.

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Investments

Before the pandemic, Chile projected annual growth of 12.6% in corporate IT expenses,

60% of which focused on cloud technologies, Big Data, and artificial intelligence. According to the Office of the Undersecretary of International Economic Relations (SUBREI), in 2019, Chile exported a total of US$1.2 billion in services, US$370 million of which are IT-related. Most of these come from Latin American countries, the U.S., and Europe.

The country also exports global services through more than 60 centers worldwide, with engineering services, software development, and IT services representing the bulk of this business.

Since 2000, Chile has put several investment policies in place through its local production promotion agency, CORFO (Corporación de Fomento de la Producción). The objective was to simplify building new application centers and software engineering centers and increase the number of qualifications and English classes for technicians and engineers.

There are approximately 150 small- and medium-sized tech companies in Chile and 800 other companies dedicated to video games, apps, and animation.

Some of the biggest, most successful international companies developing software in Chile are Oracle, Accenture, Everis, Capgemini, Banco Santander, Experian, Equifax, Yahoo, Synopsys, Sonda, Quintec, Adexus, Coasin, and McAfee.

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Tech Hubs

Although the capital, Santiago, continues to be the epicenter of business and Chile’s IT industry, several new technological parks and hubs have opened their doors in other regions, including Valparaíso and Concepción.

Currently, four technological parks operate in the country:

●       Laguna Carén Scientific and Technological Park in Pudahuel, Santiago

●       Pacyt Bío Bío Scientific and Technological Park in Concepción

●   International Antarctic Center in Punta Arenas

●   Interdisciplinary Neuroscience Center in Valparaíso

Several tech hubs operate locally, including Hubtec, HUB Apta, Enel Innovation Hub Chile, and Know Hub Chile. These institutions promote scientific knowledge transfer, helping startups and small tech companies in Chile build a successful business. They advise on strategy while helping to launch products, create qualified human capital, and offer support in networking, financing, and technology implementation.

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Coworking Spaces & Accelerators

As with most countries in Latin America, the coworking trend has also taken over Chile. More than 200 coworking spaces operate in the country, with upwards of 100 located in the capital.

However, unlike co-working spaces in other countries in the region, which focus on freelancers and entrepreneurs, 50% of the country’s coworking users are employed by big IT companies in Chile, such as Apple or Mercado Libre.

Several other Chilean cities such as Talca, Puerto Montt, Valparaíso, and Antofagasta also have co-working spaces, mainly thanks to private or state capital firms looking to promote regional entrepreneurship and innovation.

Some of the most popular coworking spaces in Chile are WeWork, Ideas Factory, Casa Co., Espacio Ba., Nube Co-work, Cango Cowork, Co-Work Latam, HIT Cowork, and Launch Coworking.

When it comes to accelerators, Chile is truly a pioneer in the region. The government-funded initiative, Startup Chile, has financed over 1,400 startups from 80 countries. It is the leading accelerator in Latin America and is considered one of the top 10 accelerators globally. After its creation and proven success, 50 countries adopted similar programs.

Here are some of the other successful accelerators operating in the country:

●       Chile Global Ventures: considered the best accelerator in Chile by CORFO, Chile Global Ventures has the largest and oldest network of angel investors. It provides private capital and assistance to startups and also helps larger companies innovate and stay current.

●       UDD Ventures: with more than 150 startups in different areas, including telecommunications, banking, e-commerce, and health, UDD Ventures has a team of mentors, as well as accomplished advisors to assist in the early stages of the startup process.

●       Imagine Lab: Microsoft Chile backs this incubator and accelerator. Since 2014, its primary focus has been technological startups and assisting in escalating operations to new markets.

●       3iE: With over 15 years of experience in the industry, this accelerator provides mentorship and highly regarded networking opportunities, with backing from both the Technical University Federico Santa María and CORFO.

●       Magical Startups: this relatively young private accelerator has an entrepreneurship program directed at digital and technological startups.

The country is home to more accelerators with ties to universities like IncubatecUFRO and the Universidad de La Frontera, along with those exclusively built for women-owned and operated businesses, such as Link and The S Factory, a Startup Chile pre-acceleration program for female founders.

The government provides additional incentives for incubators such as the National Program for Business Incubators, which supports operational costs and helps foster success.

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Skills & Employment

According to Coursera’s Global Skills Index 2020, Chile is one of the top emerging countries for technology in Latin America, scoring 90% for software engineering and 64% for human-computer Interaction.

Developers are in high demand in the country. In fact, according to Coding Dojo, barely a month after getting a full-stack certification, 90% of programmers get a job. In Chile, monthly income ranges from 700,000 (US$990) to 3 million (US$4,000) Chilean pesos depending on seniority and language capabilities.

Computer science engineering is one of the most popular careers in the country. In fact, in recent years[3] , approximately 900,000 new jobs linked to IT have been created in Chile, including 70,000 programmers[4] , illustrating an apparent increase in demand.

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Local Universities with IT Degrees and Masters

Chile has more than 50 universities all over the territory, including 18 public and dozens of private institutions. According to 2019 official data, more than 1 million students enroll in higher education each year, and approximately 1% are international.

Apart from each university’s scholarships, the government has additional scholarship options for locals and international students. Institutions such as the National Research and Development Agency (ANID) and the International Cooperation Agency in Chile (AGCI) offer master’s degree scholarships. Also, several organizations assist more vulnerable peoples in education, such as Girls in Tech Chile, supporting women in tech careers.

According to international rankings such as QS and Shanghai, the country has some of the best universities in Latin America for recruiting local talent for IT companies in Chile.

Students can choose between technical careers and bachelor degrees, as well as short courses to learn about technology and Chile’s IT industry. The most recent stats (2016)[6]  indicate that approximately 3,000 new computing science engineers graduate from university every year.

Here are some of the highest-ranked universities in Chile.

●       Pontificia Universidad Católica de Chile (UC): ranked the best university in Latin America by QS University Rankings and among the 150 best universities worldwide. PUC has a renowned Institute of Mathematical and Computational Engineering and develops approximately 25% of higher education research in Chile.

●       University of Chile: Considered the most prestigious and largest public university in the country, engineers that graduate from UCHILE have the skills to tackle and develop any new information technologies, along with software, databases, networks, web technologies, and cybersecurity.

●       University of Concepción (UDEC): Considered a leader among higher education institutions[7]  in Latin America, UDEC has more than 700 laboratories with research projects matching the world’s top universities’ level. Most notably, it has pioneered forward-thinking research on data processing systems, smart systems, and databases.

●       University of Santiago de Chile (USACH) offers a specialized computing science program with top researchers and pioneers in algorithms, cryptography, data engineering, modeling, and more. It also has master’s degrees and doctorate studies in computer science and IT.

●       Pontificia Universidad Católica de Valparaíso offers two engineering degrees in computer science and computing science execution that focus on data and algorithms, with highly skilled professors. The research center hosts renowned researchers, and it’s considered a pioneer in computational intelligence, optimization, software engineering, and more.

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English Proficiency

According to the 2020 EF English Proficiency Index, Chileans have a moderate English level, which allows them to participate and engage in meetings and effectively communicate in writing. The regions with the highest scores were Valparaíso, Biobío, and Santiago.

Chile is the third-highest Latin American country for English, after Argentina and Costa Rica, mainly due to government programs like the National English Strategy 2014-2030, which introduced English classes for the first year of primary school. The country’s network of English teachers also helps to share effective teaching methodologies and strengthen bonds among education professionals.

In addition, every year, the National Training and Job Service (Sence) provides free online courses to professionals who want to learn English and improve their chances of getting better employment.

English has not only become the key for working at any international company, but it is also the most demanded skill by companies when screening candidates for the higher positions, regardless of the industry, according to a recent study by DNA Human Capital.

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Connectivity

The 2020 Access and Uses of the Internet Survey conducted by the Office of the Undersecretary of Telecommunications (SUBTEL) reveals that 87.4% of the population have access to the internet.

Chile has free Wi-Fi spots throughout the country, and 4G mobile connections have grown exponentially in the last few years. In 2019, usage increased to 13.4%, reaching approximately 16.5 million Chileans, and SUBTEL already has plans to bring 5G networks to Chile in 2021. Fiber connections have also increased significantly in 2020, doubling the numbers registered in 2019.

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Conclusion

Even though it might not be the first answer that comes to mind when considering software outsourcing, Chile has become a notable contender in the last few years. The country’s IT industry has continuously shown potential and grown even during a pandemic, while popular nations like Mexico have seen a negative performance.

Along with all the benefits mentioned above, Chile sits in a favorable time zone for U.S. companies. Local businesses share at least four hours with U.S. offices, making it easy to coordinate tasks remotely. Overall, outsourcing to Chile is simple, convenient, and improving every year. Why not see what kinds of teams you can build from this ever-evolving IT talent hub.