Barriers facing Latin American entrepreneurs causing tech talent to fall behind

- Tuesday, March 1, 2011

Barriers facing Latin American entrepreneurs causing tech talent to fall behind

The technological talent in Spanish-speaking Latin America is falling behind the rest of the world due to barriers faced by entrepreneurs in these countries, according to a BBC Mundo article.

Entrepreneurs in the region often face a lack of adequate legal framework, corruption, low business culture, high tax burden and a lack of resources according to the report.

In Mexico, one of the region's largest markets, a culture for launching technological companies does not exist, according to Hugo Stevens, cofounder of Startups Mexico, an organization aimed at attracting entrepreneurs in the country.

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Stevens also pointed to problems in Mexico's business ecosystem with regulation, tax burden, investors and talent, which he said are some of the key inhibitors to entrepreneurship.

Espacio Empresarial Pyme specialist Carmen Castellanos said corruption in Mexico also hurts entrepreneurs. She also underlined that taxes can occupy 30% of revenues, which can sting for a new company.

Argentina, another large market in Latin America, has become accustomed to innovation, but entrepreneurship is hindered by a suffocating amount of bureaucracy.

According to Vanesa Kolodziej, cofounder of Palermo Valley - an organization looking to develop the internet community in Argentina - everything in the country works against entrepreneurs. There are no investors, and the cost of doing business is high, she said.

Hypertext CEO Mariano Amartino said the easiest path is for startups to taking their company to the US, or to make a hybrid company with operations in the country of origin, while basing the commercial side in a developed country. Kolodziej said this could lead to fewer costs in the home country, while opening the business to a broader, international market.

According to BBC Mundo, experts thought entrepreneurial environments could improve in the region in order for technology companies to expand. For this, Castellanos said a change needs to occur at the cultural level, giving people faith in doing business and showing them that innovative projects can be brought to the market.