From Silicon Valley to Silicon LatAm: A New Era in Tech and Nearshore Outsourcing

Contact Us
From Silicon Valley to Silicon LatAm: A New Era in Tech and Nearshore Outsourcing

California’s Silicon Valley has long dominated the tech industry as the hub of global tech innovation, attracting much of the globe’s tech talent. But tech hubs have been popping up globally over recent years, challenging the status quo. One region giving Silicon Valley a run for its money is Latin America, home to rising tech startups and giants, from Rappi, Mercado Libre, Nubank, and more. LatAm has been experiencing exponential tech growth and is becoming the preferred region for tech leaders globally to invest in new local startups. 

But that’s not all; U.S. tech companies are now shifting from Silicon Valley to Silicon Latam to scout for tech talent from this burgeoning tech scene. For American tech startups, outsourcing to the neighboring LatAm market (also known as nearshore outsourcing) means competing with larger companies regarding talent acquisition.

Global giants like Amazon, Dell, Google, HP, Uber, and more are also following the talent and money, setting up offices in the region’s megacities like Buenos Aires, Bogotá, São Paulo, and Mexico City. Also, now more than ever, software developers prefer working remotely, chasing the “American dream” from the comfort of their homes. These and more factors are making Latin America the desired nearshore outsourcing destination. Read on for more.

A quote by Gino Ferrand, CEO at TECLA: "The new American dream is happening miles away from the U.S.  An increasing number of software developers are opting to work remotely for foreign companies, marking a significant shift in the employment landscape."


Latin America: Pioneering the Future of Tech


Latin America is poised to be a significant player on the tech scene, promising to bring growth, innovation, and economic opportunities to a new part of the globe. Pre-Covid, LatAm was well on its way to becoming a tech startups’ hotbed, thanks to an influx of foreign investment and a rapidly growing middle class. Still, Covid-19 led to a dramatic move by consumers toward online and digital services, exacerbating this growth, particularly evident in Colombia, Chile, Mexico, and Brazil. 

For one, LatAm has seen exponential growth in the number of unicorns (50 new companies valued at over $1 billion as of 2022), as well as foreign multinationals investing billions in startups like Kavak($700M), Nubank ($750M), Nuvemshop ($500M) and Rappi ($500M). As per Crunchbase data, venture capitalists invested roughly $19.5B in LatAM tech startups and late-stage companies in 2021 and $8.28B in 2022. The funding has driven a “Tech Revolution” in the region and led to the creation of “Silicon LatAm”- tech hubs where VCs and tech talent come together to create the future of LatAm and the globe. 

While LatAm has a lower tech company penetration of 2.2% compared to China (27%) and the United States (39%), this metric has been increasing on average at 65% annually since 2003. This trend isn’t about to slow down anytime soon. 

Benefits of LatAm's Tech Scene: shared time zones, cut costs by 50% and access high-quality talent.



The 2020’s Effect 


Before the pandemic, many tech startups and businesses were already flirting with work-from-home (WFH) and hybrid models, but Covid-19 rapidly accelerated the adoption of remote work. Positive experiences with remote work during this period led to companies planning to make WFH a permanent thing. Even giant tech companies like Twitter, Facebook, Microsoft, and more started to reconsider their need for employees to show up at the office daily and big office spaces, which usually come with more costs that won’t help businesses’ bottom lines. So, remote work is here to stay, increasing the demand for LatAm tech talent. 


Senior Bilingual Talent is On the Rise 


There are roughly over a million software developers in LatAm that U.S. tech companies can hire for software development outsourcing. Over 600,000 software engineers graduate annually from Brazil and Mexico alone. Some countries are even beating the United States in matters of tech graduates in varying niches.

 

LatAm governments are increasingly waking up to the value of tech in future development, so they’re investing in relevant infrastructure and education. For example, Colombia is committed to tech education with programs like the 1k Project of Digital Centers, Connected Homes, and Computers to Educate. Argentina’s Inter-American Development Bank approved a $100 million loan to develop a program intended to boost internet access throughout the country, with the main focus being connectivity in remote areas. 

Also, Chile’s education ministry launched the National Plan for Digital Languages, encouraging more students to enroll in engineering and computer science courses. These governments have also made education more affordable and accessible, with the average cost of tuition in Argentina and Brazil ranging from $2k to $15k, while that of the United States ranges from $37k to $159k. 


Tech Talent in the U.S. Is on the Low  

According to Forbes, The National Foundation for American Policy (NFAP) pulled data from a Lightcast Job Posting, revealing that over 804,000 tech-related positions remain vacant in the United States. To show you a clearer picture, in 2021, software engineers in the U.S. faced a 1.5% unemployment rate, leaving roughly 500,000 tech roles unfilled.


New Opportunities for U.S-based Companies 


Silicon LatAm is headed to be the next Silicon Valley, and U.S. tech companies have taken note of the skilled potential down south necessary to kick-start, scale, or grow their companies. Also, considering the tech talent shortage in the US, it is no wonder that U.S. companies are flocking to the tech hotbed for tech talent pools. Here’s what the LatAm tech scene has to offer: 

High-quality talent pool-

As stated above, there are over a million software engineers in the region, with countries like Argentina and Colombia hosting some of the best LatAm tech colleges worldwide. Also, studies by Daxx reveal that LatAm is currently the most preferred destination for North American tech businesses interested in nearshore outsourcing.

Shared time zones-

There is roughly a one- to four-hour time difference between the U.S. and LatAm, facilitating real-time collaboration when handling projects with your nearshore software development team.

Geographical proximity-

Fast travel time and minimal jet lag make face-to-face visits easier when outsourcing software development to these neighboring countries.

Diversifying teams-

Hiring LatAm tech talent from nearshore locations can help your company gain diverse skill sets and perspectives, improving your team’s performance.

Cost savings-

According to Glassdoor, the estimated total pay for a software developer in the United States is roughly $95k, roughly double what a LatAm software developer makes-$50k. Coders Link also reveals that a Mexican software engineer earns approximately $3,165- about 20% of a San-Francisco-based software engineer.

Cultural proximity-

Latin Americans have a solid knowledge of North American culture and business practices, facilitating a good fit.

Strong bilingual backgrounds-

Most LatAm nations have developed education standards for studying a second language, especially English. The region also scores well in English, per the 2022 EF English Proficiency Index, with Argentinians topping the region,followed by Brazilians, Colombians, and others.


Why Picking the Right Nearshore Partner Matters


Tech companies can benefit from the exponential growth of LatAm talent. Unfortunately, most leaders need more expertise on the region necessary to make the right choice, which can cost you time and negative experiences. By working with the right nearshore partner, your company can rely on a team of professionals who understand your business well and deliver value. Here’s how: 

  • Unlike other nearshore companies, the right fit looks at your business holistically, understanding what you’re searching for in your hires. 
  • The ideal partner knows the legalities and cultural nuances your company would otherwise miss. 
  • The right recruiter utilizes a comprehensive approach to test English fluency, soft skills for remote locations, and cultural integration.
  • A company looking to hire in the LatAm region likely has not learned about the local salary ranges. A nearshore solution like TECLA gives you complete visibility into each candidate it selects for your position(s). This lets you review the candidate’s technical skills, salary expectations, location, experience, etc.

Partner with TECLA today to get access to top LatAm tech talent. 


TECLA: Your Key to a Successful Nearshore Hiring Strategy


The rise of Silicon LatAm and the increasing popularity of nearshore outsourcing are heralding a new era in tech and outsourcing that promises to bring new opportunities and growth to companies and talent alike. Here’s why you should let a  nearshore outsourcing company like TECLA handle your staff augmentation needs:

  • We have over 40,000 tech professionals across 18 countries in LatAm, including QA analysts, software developers, data scientists, data engineers, UX/UI designers, and more.
  • TECLA handles contracts, legal payments, and HR services, making the hiring process hassle-free and seamless. 
  • 14-day trial period- Our 2-week trial period and 90-day guarantee let you hire tech talent with zero risk.
  • TECLA’s programs keep your remote team on the same page, leading to a productive and highly-efficient work environment.
  • Start receiving candidate profiles within 48 hours
  • Get high-impact results with short ramp-up times. 
  • Access senior-level talent on-demand, letting you scale up and down as needed with complete flexibility.

FAQs

What Is Meant By Nearshore Outsourcing?
Nearshore outsourcing means getting work done by someone in neighboring countries, usually in the same or very similar time zone. An example is a U.S.-based tech startup hiring a Mexican-based software developer.
What Is The Difference Between Nearshore And Offshore Outsourcing?
Nearshore outsourcing refers to hiring people in neighboring countries, while offshore outsourcing refers to hiring people in faraway countries, resulting in opposite time zones.
How Will Nearshore Outsourcing Benefit My Company?
Here's how nearshore outsourcing benefits your company:

- It gives you access to top tech talent
- It saves you hiring and operational costs
- Brings on board employees that are a cultural fit
- Shared time zones facilitate real-time collaboration
- Diversifies your team and more.
Can I Hire Nearshore Talent With TECLA?
Yes. TECLA is in the business of helping U.S.-, Canadian-and European-based tech companies hire qualified nearshore talent to scale their teams.
Gino Ferrand

By 

Gino Ferrand

Gino Ferrand

Gino is an expert in global recruitment having spent the last 10 years leading TECLA and helping world-class tech companies in the U.S. hire top talent in Latin America.

How Much Are Developers in
LatAm Making?

2024 LATAM Tech Compensation Report
Checkmark
Thank you!
E-book Sent!
Something went wrong! Please try again
By submitting, you are agreeing to our privacy policy
Looking For Top Software Engineers And Tech Talent?
Contact Us
Categories
Insights
TECLA
Recruiting
TECLA
Case Studies
TECLA
LATAM Reports
TECLA
Management
TECLA
Go to Top
America Map
TECLA
Checkmark
Checkmark
Checkmark
By submitting, you are agreeing to our Privacy Policy and Terms of Service
Thank You!
Someone from our team will be in touch within 24 business hours.
Something went wrong while submitting, please try again

Get Our 2024 LatAm Salaries Report!

Checkmark
Checkmark
The report has been emailed to you
Oops! Something went wrong while submitting the form.
X
X
X
America Map
Ready?
Meet Elite, Vetted, Tech Talent in
Latin America
How can we help? Let us know and we'll be in touch ASAP!
Checkmark
Checkmark
Checkmark
By submitting, you are agreeing to our privacy policy and terms of service
All Set!
We'll get in touch in less than 48 hours
* Something went wrong! Please try again
X