Chile’s Silicon Valley

by Dave


The information technology industry is constructing a new research and development hub for software: Santiago, Chile. The Latin American capital has the attributes that have made emerging markets attractive to outsourcers, such as cheap wages; dependable, state-of-the-art infrastructure; and government incentives. While Chile’s small labor force will hinder its rise, the country also boasts an outsize pool of highly educated computer engineers and a time zone that’s synchronous with the U.S. East Coast.

Tata Consultancy Services has increased its software application development in Chile by over 30% in the past three years. Another Indian company, Polaris Software Lab, which works with Hewlett-Packard (HPQ) and Microsoft (MSFT), among others, just opened a credit-card software development center in Santiago and expects to be up to 100 employees by yearend.

We think of Chile as the specialized neurosurgeon of IT outsourcing,” says Douglas Gattuso, a managing director at Miami-based IT consultant Neoris USA, which has a 125-person office in Santiago. “Mexico, Argentina—they’re the general practitioners.”

Equifax (EFX) is the latest U.S. company to open a software lab in Santiago, joining JPMorgan Chase (JPM), Yahoo! (YHOO), and others. The Atlanta-based company looked at adding a research center in a number of places that would be cheaper than Silicon Valley. After evaluating Argentina, Brazil, and Ireland, Equifax picked Chile because of the overall quality of its engineers, says Sandeep Gupta, a vice-president for research and development.

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