It’s Time to Start Seeing Latin America as the World Power it IsBy Fabrice Serfati | Thu, 04/28/2022 - 10:00
It is impossible not to be impressed by the growth of Latin America’s digital economy in recent years. As an example, e-commerce sales grew, just in Mexico, from US$8 billion in 2018 to US$16 billion in 2020 and US$25 billion in 2021, according to AMVO and Statista data. Also, in just one year, there was a fourfold increase in VC money being invested in the region (US$ 5.4 billion invested in Latin America in 2020 compared to US$20.2 billion in 2021, according to CBInsights). These are the most immediate consequences of the increase in penetration of digital business models in the region. Nevertheless, there are other, not so known, effects that are starting to emerge and that will have, if well managed, a great positive effect for the entire continent.
Recently, while discussing with Freddy Vega, co-founder of the successful edtech company Platzi for my podcast Read to Lead, why Latin America is such a huge and yet untapped market and why we must see ourselves as a great and upcoming world power, he made a great point: “Platzi is the largest technology school in the Hispanic world and our goal is for Latin America in general, the entire region that speaks Spanish and Portuguese, to become a technology powerhouse. Latin America as a continent is super-interesting. We are the only region in the world where the same culture exists across a massive extension of land. A Mexican from Chiapas and an Argentinian from the Pampa can become friends instantly; a Chilean and a Peruvian can do business together; a Brazilian in Bogota connects perfectly with the culture despite the fact that he speaks a different language. In Latin America, we share a common culture. On the other hand, we all are in roughly the same time zone that we share with the largest consumer market on the planet: the US and Canada. In contrast, regions like Southeast Asia, considered tech coding meccas, have languages and cultures that are wildly different. In the Arab world and in North Africa, although everyone speaks Arabic, they do not write it the same way. Commercial integration is much more complicated.
“The post-pandemic era has been the time in humankind in which remote work has emerged as one of the consequences of confinement and talent is now connected from anywhere. Latin America is positioned to become a huge winner of this trend. We have a huge amount of raw talent, a huge number of resources. For the first time in history, we produce movies and win Oscars and reggaeton is heard all over the world. Culturally, we are dominating the planet.”
I must add to what Freddy said, that we are a region of young people. That is not only important for the future of the consumer market but it is important for the creative force and the labor force in the long term. Latin America is a pool of talent that shares cultural identity and is in the time zone of the biggest consumer market in the world, in a time where interconnection is available, tech talent scarce and when it is acceptable for people to work from anywhere. That makes the potential limitless.
If all of that is true (which I deeply believe it is) we should be acting accordingly not only as a entrepreneurial ecosystem but all stakeholders — founders, investors, LPs, governments — should be striving for that level of greatness and development.
Maybe it is because we are used to seeing ourselves as the “developing world” or, digging even deeper, because of our colonial past, we cannot see our entire potential until someone from the outside sees it in us first. Even as entrepreneurs, we tend to develop with caution. We start expanding country by country and rarely do we see the Latin American expansion of our companies as one master plan (unlike how many foreign companies see it and they tend to do well with that strategy).
This is the time to believe in ourselves and to plan greatly. There has never been a better time to be an entrepreneur and there has never been a better place to be an entrepreneur than Latin America in the next decade.