Latin Analysis: Colombia’s Tech Boom
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In recent years, Colombia has witnessed a remarkable surge of growth in its technology industry, propelling cities like Bogotá and Medellín into the spotlight as burgeoning tech hubs. Fueled by a combination of government initiatives, investment in digital infrastructure, and a growing focus on STEM education, the country has transformed into an environment ripe for technological innovation and entrepreneurship. When Mark Zuckerberg hosted Facebook’s first overseas town hall meeting in 2015, he did not go to Beijing, London, or Seoul. Instead, Zuckerberg strategically went to Bogotá, evidence that the country is making a successful push to become the Silicon Valley of South America.
Following this meeting, Google, Facebook, and Microsoft all opened offices in Bogotá. Along with these big-name arrivals to the country, Colombians are leading their country’s tech surge after an astronomical period of growth between 2007 and 2012 where the industry grew 177%. In 2022 alone, the tech industry showed a 14.6% increase in growth. In a competition sponsored by Citi and The Wall Street Journal in 2012, Medellín was voted as the most innovative city in the world, beating both New York and Tel Aviv. The city was commended for initiatives to increase environmental sustainability and an efficient metro system that allows people to access the city center easily from homes high up on the steep valley sides. “The most innovative cities spark visions, remove barriers and cultivate collaboration to improve the quality of life for residents,” said The Urban Land Institute when awarding Medellín City of the Year.
The government is taking a proactive approach to creating an ecosystem conducive to tech development that has set Medellín and the rest of the country apart from others in the region. Through strategic policies and initiatives such as the Columbia Startup Visa program, which provides streamlined processes for foreign entrepreneurs looking to establish tech businesses in the country, Colombia attracts investments from large-scale corporations. Moreover, the nation aggressively invests in its digital infrastructure to foster innovation and economic growth, laying the groundwork for technological advancements. Legal incentives like Tax Laws 1556 and 814 have led to the development of feature films and series for streaming platforms and TV as well as the development of production infrastructure. Through expanding access to high-speed internet and supporting the development of digital platforms and services, this focus on digital connectivity has been crucial for encouraging tech startups and facilitating the adoption of digital solutions across various sectors of the economy. The country also has a strong commitment to energy transition, ranking third in Latin America.
The rise of collaborative spaces has also been a defining feature of Colombia's tech landscape. Co-working offices and innovation labs have proliferated, providing entrepreneurs and innovators with the resources and support they need to turn their ideas into reality. These spaces serve as hubs for networking, knowledge-sharing, and collaboration, fostering a culture of innovation and entrepreneurship across the country. Around 10% of the economically active population is bilingual, predominantly young people between 20 and 29 years old. Benefits such as remote work and flexible schedules reduce employee turnover to less than 5%.
From contact centers to consulting and auditing, business process outsourcing (BPO) services in Colombia are globally recognized and rank first in the Offshore BPO Confidence Index. In 2021, sales surpassed $2.6B, accounting for 19.1% of total BPO sales globally, and this has attracted attention from global investors such as Amazon, Johnson & Johnson, and SBD. They have recognized this potential and established operations in the country due to its favorable business environment and appealing location for investors. The country has a strategic location situated between major economic centers such as Buenos Aires and Miami.
Along with infrastructure development, Colombia has prioritized science, technology, engineering, and math (STEM) education to develop a skilled workforce capable of driving technological advancements. Initiatives like the "Computadores para Educar" (Computers for Education) program have aimed to provide schools with access to technology and promote digital literacy among students. Founded in 2017, the Colombia STEM Alliance (CSA) stands as “An organization committed to improving the odds of student success by increasing the number of students who pursue STEM education.” This non-profit organization values the idea that businesses and government must directly support K-12 STEM programs that are relevant to workforce opportunities. Since its founding, the CSA has established a reputation for providing accessible high-quality STEM education programs that inspire Colombian youth to improve their proficiency in math and science subject areas. Additionally, universities and technical institutions have begun to develop similar programs, increasing their efforts to offer cutting-edge programs in fields like computer science, engineering, and data analytics.
Most recently, Colombia has joined Bella II, an initiative working to connect Latin America to Europe. Colombia’s entry into the Europe Link facilitated by the National Academic Network of Advanced Technology (Renata), marks a significant milestone in digital infrastructure development. This initiative, co-financed by the European Union, involves connecting Europe with Latin America and the Caribbean through a submarine fiber optic cable. Cartagena will serve as the anchoring area for the cable, officially uniting Colombia with the Bella II project and joining countries like Ecuador, Chile, and Brazil in the initiative. This alliance enables high-capacity connections to over 40 university and scientific institutions, enhancing digital ecosystems in the region and facilitating innovation and artificial intelligence projects in Colombia. The collaboration also fosters opportunities for cooperation in cybersecurity, human capital development, and food security.
Cities like Bogotá and Medellín have emerged as focal points of Colombia's tech revolution, attracting talent, investment, and attention from both domestic and international players. Bogotá, with its vibrant startup scene and thriving tech community, has become a magnet for tech enthusiasts and entrepreneurs alike. Likewise, Medellín has earned a reputation as a hub for innovation, driving economic development through entrepreneurship and innovation. Looking ahead, Colombia's tech boom shows no signs of slowing down. The nation boasts ample urban space and competitive prices, creating an ideal environment for technological developments that cater to both domestic and foreign markets alike. With sustained government support, robust investments in digital infrastructure, and a growing emphasis on STEM education, Colombia is poised to leverage its position as a regional leader in innovation. As Colombia's tech sector continues to evolve, it promises to unlock new opportunities for growth, prosperity, and social development across the country.
