Chile Embarks on Mission to Enter US IT Market

Image: Orlando Florin Rosu

Chile wants to be a key supplier of IT and related services to the U.S. market, but faces the dilemma of not having enough trained people required to compete with the large software and services operations in India and the Philippines, according to IDG News Service.

By focusing on high-value work and by partnering with larger Latin American countries, Chile is now taking strides to grow its outsourcing business to the United States. However, instead of competing with India and the Philippines in volume businesses such as software development and other services, Chile will concentrate on high value-added services, according to Carlos Bustos, global services director of NovaRed.

“You can’t get the people required for that kind of work in probably the whole of Latin America,” he told IDG News Service.

Analysts believe Chile can play an important role in the outsourcing business, as it already has a sophisticated IT talent pool. The country also has top-quality infrastructure like roads, telecommunications and electricity. As its location is among the more expensive ones in Latin America, it would not be a place a customer would choose to dramatically cut costs, one expert said.

For a large buyer looking to build a global portfolio, Chile’s role would most likely be that of a small-scale location with a specialization on higher-value knowledge services or IT activities, said Anand Ramesh, research director at Everest Research Institute. It is unlikely to be the place where the biggest offshoring adopters, like the large U.S. banks, have a thousand or few thousand employees working, he added.

Chilean IT services companies are already setting up offices in other Latin American countries to benefit from the skilled staff available in these countries, and to offer services to customers. However, the challenge for Chile is to build its business in the U.S. market where some of its companies are not well known. Local Chilean companies are implementing a host of strategies; NovaRed, for example, has teamed up with system integrators in the United States to market its services to customers there.

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