10 Facts about Argentina’s Thriving Technology Scene
Argentina is home to a vibrant and ever-growing technological ecosystem. Of the 44 million people who live in Argentina, approximately 30 million have Internet access. Argentina is well-connected and the population has a higher level of income and wider middle-class than many of its neighbors in Latin America.
Although the country may have a long history of economic instability and financial crises, Argentine entrepreneurs are continually developing new ideas to overcome these challenges and drive the country forward.
Here’s a look at how Argentina maintains its position as a major player on the global technology stage.
1. Argentina is home to some of the biggest tech companies born in Latin America
In the late 1990s to early 2000s, Buenos Aires established itself as a leading technology hub in Latin America with a wave of successful technology companies, including MercadoLibre, OLX, Despegar, and Globant.
These companies are still among Latin America’s leading “unicorns” and employee thousands of people across Latin America. Many of the founding team members of these companies launched other companies or became investors in the region’s latest generation of entrepreneurs.
2. The Entrepreneur’s Law allows new businesses to set up in just one day
In 2017, Argentina passed a new Entrepreneur’s Law to simplify the process of registering a business, taking the process from an average of 24 days to just one. This new legislation coupled with programs focused on entrepreneurship, such as Startup Buenos Aires and IncuBAte, not only help build community among local entrepreneurs but also attract more foreign entrepreneurs and investors to Argentina.
3. The time zone and top talent make it a leading outsourcing destination
Argentina may be over 7,000 miles from the US, but it is only one to two hours ahead of the US East Coast depending on the time of year. Buenos Aires is only four hours behind London and four hours ahead of Silicon Valley, which also makes it a strategic location for working with a remote team or international clients.
Due to its free higher education programs, Argentina’s population consistently ranks among the highest educated in Latin America. Argentina is a major global outsourcing hub for software development and companies working with teams or customers in English will find it easy to communicate as the country also has the highest level of English in Latin America.
4. MercadoLibre is Latin America’s e-commerce leader
Headquartered in Buenos Aires, MercadoLibre is Latin America’s version of Amazon and Alibaba. The platform serves over 166 million active users buying and selling products or services online in 20 countries.
With a market capitalization over US$15 billion, the e-commerce giant continuously launches new financial services to help its users facilitate payments (MercadoPago) and obtain credit. MercadoLibre is innovating at the same rate as other global mobile payments giants such as Alipay, WeChat Pay, and Square with its own mobile payment wallet, QR codes, and other services.
5. Buenos Aires is a blockchain hotspot
Many Argentine entrepreneurs are powering their innovations with blockchain technology as a way to protect their business models against corruption and provide some protection against economic instability. Over the past year, Argentine blockchain projects have drawn significant attention and funding, including Ripio Credit Network, AstorGame, Flixxo, RSK, Bitfarms, and Decentraland.
The Argentine government itself uses blockchain technology to keep records of daily official bulletins. What’s more, the blockchain community organizes numerous initiatives and events, such as the Latin American Bitcoin and Blockchain Conference, to promote the technology as a key tool for financial inclusion in the region.
6. Argentine fintechs are disrupting traditional banking
Argentina has one of the smallest financial systems in the world as a percentage of its GDP (14%). However, the country also has some of the highest interest rates in the world and nearly half of the population is unbanked or underbanked.
A long history of economic instability coupled with an overwhelming sense of distrust in traditional banking institutions in Argentina has created a new generation of alternative financial services aimed at meeting consumers’ financial needs more transparently and affordably.
Argentine startups such as Ripio Credit Network, a digital payments company based on blockchain technology, and Uala, a fee-free mobile banking company, are attracting significant attention from both users and investors in the region.
7. Support for agtech entrepreneurs is growing
Argentina is one of the world’s largest producers of soybeans, wheat, wine, and meat. Today, the country’s agricultural sector is undergoing a technological revolution with the help of advanced biotechnology and innovative cloud and mobile-based applications. S4, a provider of satellite-based, risk-management data analytics tools for agricultural businesses, was recently named one of the most innovative agtech startups outside of the US.
8. 5G may roll out soon across Argentina
Although there are regions of Argentina where 4G mobile Internet connectivity has not been fully-deployed, and almost 20% of mobile users don’t have access to this communication network, companies in Argentina are already preparing to implement 5G connectivity by 2020.
Testing is underway, and speeds may reach 20 Gbps, which is almost four thousand times faster than the average home connection speeds in Argentina right now. Faster connection speeds will not only help reduce energy consumption but also increase IoT and smart city developments in the country.
9. Nine out of 10 Argentines shop online
According to the Argentine Chamber of Electronic Commerce (CACE), nine out of 10 Argentines have purchased something online at least once in their lives. E-commerce activity has proliferated in Argentina in recent years. In fact, during the first six months of 2018, there were two online purchases per second in the country and Argentines spent more than 370,000 pesos (approximately US$10,000) per minute.
10. Social networks are driving online shopping in Argentina
In 2017, there were 22.9 million social media users in Argentina, a number expected to reach 25 million in 2021. More than half of the popular has a smartphone, and social networking apps such as WhatsApp and Facebook are primary means of communication. According to Statista, Argentines are the third most active population on social networks in Latin America. 93.8% of Argentine online retailers surveyed by TiendaNube said they use Instagram to spread their brand, while 87.6% do so through Facebook. Many said they have also started to use WhatsApp to promote their products or services.
Argentina established itself as a leading technology hub in Latin America early on with a wave of successful technology companies. Today, it continues that path with more government support, a growing community of innovative entrepreneurs, and a tech-savvy consumerbase. For more facts about Latin America’s technology scene, check out our post on Uruguay.