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International Investment

Silicon Samba Latin America’s high-tech sector is beginning to flourish and technology entrepreneurs from the region are increasingly forging alliances with Silicon Valley and acquiring the knowledge and expertise to pursue ambitious technology enterprises at home. Brazil is emerging as a force in technology while countries such a Chile and Argentina are also making progress. Large swathes of the region are currently enjoying high levels of economic growth and the rapidly expanding technology industry is contributing substantially to creating that new wealth. Austerity in Europe has fed through to a decline in R&D investment in sharp contrast to countries such as Chile and Brazil which are investing heavily in technology and attracting growing numbers of prominent companies to establish bases in their respective countries. The Brazilian government has embarked upon a $2.2bn initiative to invest in 75,000 science and technology scholarships by the end of next year. The initiative will send students abroad as part of the government’s “Science without Borders” campaign, which provides scholarships to Brazilian students, mainly in the areas of science, technology, engineering and mathematics. Brazil has also introduced a range of incentives to attract global multinationals including tax incentives to companies focusing on technological innovation. There has been a dramatic rise in the number of technology parks since 2006 and headline investments in the country’s new hubs have included a $12bn investment courtesy of Foxconn Technology Group – the maker of the iPhone. Headquartered in Taiwan, Foxconn is the world’s largest manufacturer of electronic components, including printed circuit boards. The company established a new $12bn

factory in Jundiaí, a city in the state of São Paulo. Jundiaí– a city of about 2.5 million and the state capital of Minas Gerais – is proving a viable option for start-ups. The city has attracted an impressive list of companies including SambaTech, Deskmetrics and the Google owned outfit, Akwan. In addition, DFJ Fir Capital’s headquarters is also located in the city. Argentina has a track record of innovation and achievement in the fields of medicine, nuclear physics, biotechnology, nanotechnology and even space science. Argentine Bernardo Houssay, a joint recipient of the Nobel Prize for medicine in 1947 was the first Latin American Nobel laureate to receive the prize and went on to establish Argentina’s National Research Council. A well-educated and tech savvy workforce have attracted a significant presence of global technology companies to Argentina including Motorola, Microsoft, Hewlett-Packard, IBM, Sony and Google. Córdoba – the second-largest city in Argentina and located near the geographical center of the nation – has an especially fast-growing software industry and high-tech organizations with presence in the city include: Nimbuzz, Intel, EA, DreamWorks, Zynga, IBM, Hewlett-Packard and LinkedIn. Even Colombia, a Latin American country with a traditionally murky reputation is beginning to attract notice as a potential prospect on the high tech front. An increasing number of UK high-tech companies are establishing a

presence in the country and Bogota has a solid base of technology companies including BT, Aveva, Smartwater and Experian, which provides solutions for managing credit risk in the financial sector. Chile also offers signs of promise. One organization leading the drive to establish Chile as a new Silicon Valley is ’Start-Up Chile’ (SUP) which offers a range of grants to start-ups considered to have potential. The high-tech boom is having hugely positive effects throughout Latin America and evidence suggests that it is contributing significantly to economic growth in the region. The hope is that it will continue and prove instrumental in eradicating poverty which has historically afflicted such a large proportion of the population of Latin America.

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