by Nicolás Guiloff, manager of new business, Intelligenxia Business Group
During 2006 and 2007, the Chilean government commissioned a study from the country's national innovation council, which, together with The Boston Consulting Group, carried out the "Study on Competitiveness in Clusters of the Chilean Economy." From the more than 100 sectors with high growth potential in the world, eight high-potential clusters were identified in which our country could gain a competitive advantage globally in the medium and long term, thus contributing to greater economic development.
One of these eight clusters is offshoring. However, the opportunity for Chile is specifically in offshore services, which comes with benefits such as training and jobs. The size of the global offshoring industry was estimated at US$280bn during 2010, and a 40% growth rate is predicted for the coming years. This opportunity is one that Chile cannot let pass.
Chile as a country is privileged to have a stable political and economic framework within the region, coupled with low levels of corruption and a high level of quality of life. This situation makes Chile the perfect place for becoming a hub of innovation and development within Latin America, and perhaps even worldwide. With the end of the 20th century and the decade-old start of the 21st, several economists have already pointed out that we have moved from an industrial economy to an economy of knowledge. New principles govern this economy, and big infrastructure is no longer necessary to generate wealth. Just look at the list of some of the companies that have climbed to a market value of US$1bn most rapidly: Facebook, Twitter and the ranking leader, Groupon. The question is, Could companies like these have been invented in Chile?
A few days ago, I met someone who had invented a Facebook-like solution, but deployed within his company. He regretted that doing the same worldwide never crossed his mind. In fact, in Chile, talking about inventing an idea and selling it all over the world still sounds like a fairy tale or a crazy person's dream. Fortunately, this is becoming less and less true. The government is stepping up and has implemented initiatives such as Startup Chile, a project that is highly acclaimed by international press. It involves attracting talent from other countries to develop their projects in Chile to create jobs here, to spread globalization and to get us to generate more high-impact companies and businesspeople that think and take their businesses worldwide. And there are already a few examples of this happening.
Trabajando.com and Crystal Lagoons, among others, are Chilean companies that have been able to break the paradigm and have established themselves in various countries, offering their services globally, but managing the business from Chile. The government has done its part as well. Through subsidies and incentive mechanisms, the objective is clear: getting Chilean companies listed on Nasdaq. Aside from the US, so far the countries with the most technology companies listed in that market are Israel, Canada, Japan, Ireland, the UK, Singapore, India, Korea, France and Germany.
The goal of bringing technological projects to Nasdaq is not just a whim. While in Chile we boast about having one of the best GDPs per capita in the region, one of our main problems is high economic inequality and concentration of wealth in the hands of a few businesspeople that manage large economic groups. The way to break this trend is through entrepreneurship. Creating new companies - led by a new generation that is aiming to establish itself globally and doesn't need a lot of capital in infrastructure to export technology services - seems to be the way. For example, a country like Israel, which invests a large part of its budget in promoting technology projects, is the country with the highest density of startups per capita in the world, and last year it was able to attract more than US$200mn in venture capital investments, the same amount that was invested in the UK. At the same time, it is worth noting that Israel's population is only 7.5mn, versus the UK's 61mn.
To summarize, the best way for our country to become a developed and prosperous nation is by facing the new challenges of the global economy with a vision and a focus on innovating and developing companies that are capable, first, of exporting services to the rest of the world and, second, of attracting large venture capital investments. This will make the economic system more dynamic and will help to finally break up the high concentration of wealth in our country. It will also help to generate more Chilean entrepreneurs that think big and develop "technology made in Chile" for the rest of the world.
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