Can Latin American companies compete with India in selling IT services to the U.S.? Geri Smith explores the topic in a Business Week "Online Extra": Can Latin America Challenge India?.
Latin Countries can benefit from
- time zones similar to those in the U.S.
- U.S. free trade agreements (according to Ben Schneider, president of a consulting firm in Lima, Peru, this is not just about tariffs: " "It's not just a matter of tariffs, but of policies on intellectual property protection and labor rules," he says. "American companies that want to sign an outsourcing contract prefer to sign it with companies whose countries have a free trade agreement with the U.S." ")
- rising costs in India will reduce its competitive advantage to the Latins
- India is a nuclear power; because of "U.S. legislative restrictions" Latin countries might have an advantage for "certain kinds of projects involving sensitive aviation and energy technology"
Smith surveys the efforts of Argentina, Mexico, Chile, Costa Rica, and Nicaragua. Who has the edge?
Mexico, Brazil and Chile are the main countries to watch for offshoring in Latin America -- the first two because they have the critical mass, big company clients, and enough students graduating, and Chile because it's savvy as far as globalization goes and has been working hard on bilingual education. The rest of the region's countries, he says, occupy small niches -- for now.