Colombia and Uruguay are two Latin American countries that stand out as fast-growing, stable, and innovative economies. Colombian developers have earned a reputation in the IT outsourcing market for their adaptability and advanced understanding of in-demand technologies, such as cloud computing, IoT, and AI. This makes Colombia an attractive location for team extension in Latin America: in 2023, the IT sector of Colombia saw an expansion of 13.6% [1]. Uruguay ranks among the top Latin American countries in software exports per capita, primarily cooperating with the US. In 2013, Uruguay reached the status of a high-income nation, becoming one of just two countries in South America to achieve this. Let’s look at the numbers in five key parameters and choose Colombia vs Uruguay for nearshore technology outsourcing.
Overview of the Colombian and Uruguayan IT outsourcing markets
North American companies often outsource to Latin America due to the region's proximity and the availability of a skilled workforce at competitive costs. Colombia and Uruguay align well with these reasons, offering robust tech talent pools and favorable business environments for outsourcing partnerships. Let’s look at the two options for the nearshore technology outsourcing destination based on business climate, talent pool, tech climate, English proficiency, and time zone compatibility:
Business climate
Both countries have recently undergone significant changes in their governance and economic policies, and their GDP has shot up.
The Colombian government is committed to reforms that increase its attractiveness to US companies, and the country’s technology sector primarily focuses on outsourcing. In 2018, Colombia significantly improved its intellectual property rights and enforcement mechanisms, advancing to the Less Critical Watch List in the US classification system for evaluating the reliability of jurisdictions' IP practices.
Colombia has also established an impressive and globally competitive startup ecosystem, with an annual growth rate of 28% in the last five years [2]. In 2023, Bogota and Medellin were home to over 1,000 startups, two of which received a unicorn status [3].
Uruguay was chosen as a location by multinational tech companies like RCI, Amazon, Microsoft, Sabre, and PwC for IT operations, thanks to its skilled workforce and business-friendly environment. Uruguay is a base for US technology firms to develop innovation centers and regional hubs, with some expanding their investments and infrastructure. Also, Uruguay’s startup culture has cultivated dLocal, a pioneering payment platform that achieved unicorn status in 2021.
Read more: Nearshoring to Latin America: Quality without cutting corners
Talent pool
Colombia's technology sector employs over 150,000 professionals and comprises more than 360 companies specializing in software development [4]. The IMD World Talent Ranking 2022 indicates that Colombia has one of the most significant workforces in Latin America, marked by the region's highest growth and skills improvement rates [5]. This positions Colombia ahead of other prominent countries in the region, such as Peru, Mexico, and Brazil, in terms of workforce development and training opportunities within the tech industry.
Uruguay’s IT sector is small compared to other countries, with 17K professionals employed in software development.
In 2007, Uruguay became the first country to implement the One Laptop Per Child program. This ambitious initiative was designed to bridge the digital divide, ensuring that every child in public schools could have a personal laptop along with Internet access. However, the plan does not end when the students receive their laptops. Each child can access software aimed at helping them build up hard skills such as coding. The program also emphasizes English proficiency and motivates schools to cooperate with international organizations that promote it. The initiative has already impacted the labor market in Uruguay, promoting interest and familiarity with technology among its young people.
Tech climate
Colombia ranks best in the region and 19th globally by skill proficiency, according to Coursera [5]. Colombia's high ranking is partly due to its developers' comprehensive understanding of business processes. This knowledge allows them to create software solutions aligned with a company's strategic objectives. They can propose innovative solutions that promote growth and improve operational effectiveness by anticipating business needs.
Read more: Software development in Colombia: industry overview, hubs, and more
Uruguay ranks 47th globally and 9th in Latin America. At the same time, Uruguayan developers rank third in the region in the ITU Global Cybersecurity Index. This reflects their dedication to maintaining a secure digital environment, involving work in cybersecurity's legal, technical, organizational, capacity building, and cooperation areas. The Inter-American Development Bank also identifies Uruguay as one of Latin America's more progressive countries in terms of digital technology and infrastructure. This evaluation further highlights Uruguay's sound ICT policies, inventive tech ecosystem, and holistic digital strategies, contributing to its leading role in regional cybersecurity and technology progress.
English proficiency
English proficiency in Colombia has big regional variations. While the national average may not be particularly high, cities such as Medellin stand out from the rest of the country. In Medellín, English language skills surpass the global median, reaching comparable levels in South Korea. Uruguay's average proficiency score is notably higher; it can be compared to Spain. The score in the capital city of Montevideo can be compared to Switzerland. Both countries' proficiency is sufficient for nearshore technology outsourcing cooperation. But comparing Colombia vs Uruguay for nearshore technology outsourcing—Uruguay wins.
Time zone compatibility
Colombia's time zone matches that of the East Coast, presenting a three-hour gap with the West Coast. This synchronization positions Colombia as an ideal outsourcing destination for companies across North America.
Uruguay is two hours ahead of New York and five hours ahead of the West Coast, positioning it more easterly. This geographic placement results in a mere three-hour time difference from London, making Uruguay an attractive option for companies in Western Europe.
Wrap up
In conclusion, both countries present unique strengths when weighing Colombia vs Uruguay for nearshore technology outsourcing. Colombia stands out for its skilled pool of software development talent, good intellectual rights enforcement system, and time zone alignment with North American clients. Despite its size and fewer developers, Uruguay stands out with its specialized skills, especially in cybersecurity. The country has an excellent business environment, and its developers have the highest English proficiency in the region, making it a good option for tech outsourcing. Ultimately, the choice depends on the unique needs of the outsourcing project.
Why should you choose N-iX as a nearshore technology outsourcing partner in Latin America?
- N-iX has a proven track record of successful partnerships with global enterprises and Fortune 500 companies.
- We offer a wide range of tech expertise, including Data, Cloud, IoT, embedded software, and intelligent platforms.
- Our team consists of over 2,200 in-house tech specialists, and we have access to over 200,000 CVs in our database.
- We strictly adhere to international regulations to ensure the highest level of security and compliance.
MARKET REPORT
Get a complete overview of the tech market in Latin America!
Success!
References:
- Colombia ICT Market Size and Forecast to 2027
- Colombia Tech Report 2022 - 2023, KPMG Colombia
- Colombian cities with most startups 2023, Statista
- LinkedIn and Clutch
- World Talent Ranking – IMD business school for management and leadership courses. World Talent Ranking – IMD business school for management and leadership courses
- Global Skills Report, Coursera 2023 Ease of Doing Business ranking, The World Bank
Have a question?
Speak to an expert
