Why nearshore to Colombia?

To those in the know, Colombia is truly Latin America’s diamond in the rough. Difficult episodes of drug-related violence kept Colombia under the business radar for a couple of decades, yet the country has now conquered its recent past, achieving levels of safety in 2011 comparable to those it had in 1984, before drug violence started. Statistically, the country’s cities are now comparably as safe as Sao Paulo or Buenos Aires, and safer than most cities in mayor Latin American countries such as Mexico or Venezuela.

Many are surprised to learn that Colombia, with 46 million people, is the second largest Spanish speaking country in the world, and the third largest in population within Latin America. It is also distinct in that it boasts seven mayor capital cities of over 1 million residents –contrasting with most countries in the region, who usually concentrate their population in a single urban area. This fact has an important impact in the availability of talent, as well as the number of top level universities and higher education institutions that exist in the country. Colombia, with roughly a third of the population of Mexico, boasts more universities.

Colombia’s economic stability is outstanding. The country is the only large economy in Latin America never to have defaulted on its debt, and displays the second smallest historical inflation rate, after Chile (with the exception that Colombia has never suffered from hyperinflation). Contrary to the troubles of many European nations, Colombia’s debt rating was promoted last year, emphasizing the strength of its internal economy, which will allow the country to grow a healthy 5.5% in 2011, despite the economic crisis (the nation has been the second fastest growing in Latin America over the last 10 years). When adjusted by Purchasing Power Parity, Colombia is the 28th economy in the world (larger than Sweden, Singapore or Hong Kong, for example). Such solid macroeconomic indicators led HSBC to name it as one of the CIVET countries –those medium sized economies with the highest growth prospects over the next 10 years— (CIVET, the name for a cat native to South East Asia, stands for Colombia, Indonesia, Vietnam, Egypt and Turkey).

From an IT perspective, Colombia has the largest amount of CMMi level 5 companies in the region, and boasts a workforce of more than 72,000 ICT professionals. Labor force availability is ample, with the country graduating 6,000 to 8,000 fresh engineers per year, with more than half having an adequate to excellent command of the English language.

From a nearshoring perspective, the country it is geographically privileged, sharing US Central and Eastern time zones, with a 2 or 3 hour difference with Pacific time (depending on whether daylight savings is active or not). Furthermore, the country is easily reachable by plane, with flights taking 5 hours from New York, 3 from Miami and roughly 8 from San Francisco (the latter requires a layover). More than 193 different flights arrive into Colombia from different US cities every week. Colombia’s stronghold in engineering talent has led Gartner has identified Colombia as one of the top 30 countries for offshore services worldwide since 2010.

Culturally, Colombia is very similar to North America. People are open and friendly, and are straightforward to express their opinions. They work hard and do not mind having to work late or over the weekend. And in contrast to several other Latin America countries where politicians have painted North America as an enemy, Colombians have a very high opinion of Americans and Canadians, and like doing business with, as well as travelling to, the US and Canada.

To close, Colombia has recently signed an FTA with the US and Canada, motivating large technology players to establish a base in the country to serve Latin America, as is the case of HP, which recently started a software services center planned for 3,000 people in Medellin, after reviewing more than 16 different cities in the region. To some readers, this might completely counter the image of Colombia that they built in press-clippings over the years. But we invite you to come and see for yourself!

For an excellent compilation of articles by accredited journals about the changes undergone by Colombia, and the dynamism that currently makes it one of Latin America's premier outsourcing and investmnet destinations, please click here.