The combination of skilled labor, timezone alignment, and growing tech ecosystems makes outsourcing and looking for IT staff augmentation in Latin America appealing to businesses from North America. Colombia is consistently ranked as one of the region's most innovative and rapidly growing countries. Argentina is an established player and Latin America's third-largest IT outsourcing market, home to one-third of the Latin American unicorns. Let's compare Colombia vs Argentina for nearshore technology outsourcing and choose between the two.
Overview of the Colombian and Argentine IT outsourcing markets
In 2023, the Colombian IT industry experienced a growth of 13.6% [1]. This can be attributed to the excellent cost-to-quality ratio provided by Colombian companies. In Medellin, a major IT hub, living costs are 330% lower than in New York [2]. This means a Colombian developer can enjoy the same purchasing power as their American counterpart, even with an income over three times lower. Simultaneously, companies looking to outsource to Colombia face no quality trade-off: Colombian tech expertise ranks in the top 5% of the world [3].
Argentine ICT sector is experiencing expansion above the average for the economy, with an annual growth rate of approximately 8% [4]. This growth is supported by the government's commitment to education and its efforts to develop a skilled workforce capable of technology exports. The quality of the Argentine educational system is well-recognized, ranking 32nd globally [5]. Additionally, Argentina has established publicly funded coding boot camps, which aim to educate 70,000 developers annually [6]. Outsourcing companies are granted benefits as the government recognizes the industry's immense importance for the country.
Read more: Nearshoring to Latin America: Quality without cutting corners
Talent pool and specialization
Colombia is home to over 150K developers, around 59K of whom specialize in C# and another 58K in C++. The Argentinian talent pool has 115K developers, most of whom are engaged in nearshore technology outsourcing. In both countries, front-end development ranks as the third most popular specialization, with 15K in Colombia and 13K in Argentina. A notable distinction between the two is Argentina's stronger emphasis on .NET, more than double Colombia's count. Argentina also leads with a significantly higher number of Python developers.
Tech skills
Colombia is ranked 19th globally for having one of the most skilled labor pools, and it holds the top position in the region. On the other hand, Argentina ranks 30th globally and 4th in Latin America.
One of the reasons for Colombia's high ranking is that its developers have a good understanding of business processes. This advantage allows them to create software solutions that align with a company's strategic objectives. They can anticipate business needs and propose innovative solutions that drive growth and efficiency.
In the Digital Competitiveness Ranking by IMD, Colombia is just a few positions ahead of Argentina in parameters related to technology outsourcing. Colombia outranks Argentina in general education, technological skills, and specialized training.
English proficiency
The average English proficiency in Colombia is on the lower end, ranking 75th out of 113 countries and 17th out of 20 in Latin America. However, the English proficiency in Colombian IT hubs differs from the rest of the country. It is labeled "Moderate" and closer to that of Israel or South Korea.
Argentina's English proficiency is high, the best in Latin America, and 28th globally. The English level in IT hubs is comparable to that of Germany and South Africa.
Time zone overlap and geography
Colombian time zone aligns with the East Coast, with a three-hour difference from the West Coast. This makes outsourcing to the country an excellent choice for North American companies, regardless of their location. On the other hand, Argentina is two hours ahead of New York and five hours ahead of the West Coast. However, Argentina's more Eastern location means it is only three hours behind London, making it a favorable choice for Western European companies.
Business climate
Colombia is beginning to tap into its vast potential, and Argentina is on the cusp of big political and economic transformations. In the Digital Competitiveness ranking, the Argentine economy is ahead by a few positions in adaptiveness, agility, and IT integration. This ranking measures the overall readiness of the economy to adapt to modern challenges and implement innovative technology. However, the overall score of the two countries in this index is similar: Colombia is placed 62th globally and Argentina 61th. In the Ease of Doing Business, Colombia holds a significant advantage, ranking 67th, compared to Argentina, which ranks 126th [7].
The US–Colombia Trade Promotion Agreement (CTPA) has been operational since May 2012, enhancing trade relations between the two nations. Significant progress was made in 2018 when Colombia upgraded its Intellectual Property Rights (IPR) protections, transitioning from the US Trade Representative (USTR) Special 301 Priority Watch List to the Watch List. This improvement underscores Colombia's commitment to providing equitable IPR protections for US and Colombian companies.
The United States is Argentina's leading foreign direct investment source, with investments amounting to $131.6B over the past decade. Over 300 American companies operate within Argentina, including several that have been established in the country for over a century. This is a testament to the favorable conditions the country's legal framework provides to American companies to attract investment.
Wrap up
Comparing Colombia vs Argentina for nearshore technology outsourcing shows that the countries are similar in a number of ways: their geographic location makes it convenient to cooperate with North American companies, their talent pools are skilled and similar in size, and their business climate is continuously improving. Colombia aligns with the East Coast time zone, ranks high in tech skills regionally and globally, and has a larger developer talent pool. Argentina is two hours ahead of the East Coast, leads in English proficiency but comes behind Colombia in tech skills ranking, and has a smaller developer talent pool. In terms of business climate, Colombia is ranked higher in ease of doing business compared to Argentina, but both are similarly positioned in digital competitiveness. Ultimately, the choice between Colombia and Argentina depends on unique priorities.
Why choose N-iX as a nearshore technology outsourcing partner in Latin America?
References:
- Colombia ICT Market Size and Forecast to 2027
- Cost of Living Comparison Between Medellin, Colombia And New York, NY, United States
- Argentina ICT Market Size & Share Analysis, Industry Research Report
- Education Rankings by Country 2024
- In Argentina, coding bootcamps target the poor to fill tech jobs, ET CIO
- Global Skills Report, Coursera 2023 Ease of Doing Business ranking, The World Bank
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