Nearshore Americas

CITY PROFILE: Santiago, a Premium Location Ripe for Change

Despite the influence the country has regionally, Chile hasn’t often featured in the Nearshore conversation.

Though geographically large, stretching half the length of South America, the country is home to less than 20 million, around a third of whom live in the capital, Santiago. Its data center industry, founded on the high-level connectivity and infrastructural security the country provides, has been a great success. And while Nearshore tech offerings are certainly growing and many international names are present in the country, the BPO industry remains a comparative minnow.

BPO Future to be Premium

The same reason that brings global organizations to Chile and its capital are those that have limited the growth of some outsourcing sectors. Aside from recent social unrest, caused by factors including rising cost of living, effects of the privatization of public sectors, and growing inequality, the political and financial stability of the country has set Chile apart from neighboring states like Argentina. But it also meant BPO companies found it difficult to compete.

Juan Pablo Tricarico, President of ALOIC

“Chile is a small country by population, and Santiago is a small city. People here are very well educated and receive good salaries. It isn’t easy to find the correct level of people at the scale needed and at a good cost,” explained Juan Pablo Tricarico, President of the Latin American Alliance of Customer Interaction Organizations (ALOIC).

While there’s a large Santiago-based talent pool to find senior professionals – the managers, project managers and supervisors a BPO needs – it’s harder to find entry-level agents at scale, says Tricarico. Even then, Chilean agents will cost more than those to the north, in Bolivia, Peru and Colombia, and likely offer higher English-language standards.

But Tricarico believes that Santiago should exploit its barriers to BPO expansion and set course for a BPO future that is small but defined.

“My vision for Santiago and Chile is that it must be focused on premium services with more technological integrated solutions, and not think of large-scale services because the rates simply aren’t there,” he said. “Santiago does not have a lot of [BPO] companies, but it does have a few excellent companies.”


Martin Lewit, SVP of Corporate Development at Nisum

“Latin America in general, perhaps with the exception of Colombia, and Brazil given the size of its market, is very centralised around capital cities,” said Martin Lewitt, SVP of Corporate Development at digital commerce firm, Nisum.

“But Chile in particular is very concentrated in Santiago, particularly when talking about tech services,” he added.

While Chile’s economy is diversified and has robust extractive industries like mining in the north of the country or fishing toward the south, industries that are aligned to Chile’s strong markets – including finance, retail and recently biotechnology – are all located in that center of power and commerce; Santiago. 

The combined heft of 26 trade agreements including with EU, Mercosur and US, means there is a high level of trade moving in and out of the capital. 

The city is a regional magnet, pulling talent from Uruguay, Colombia, Argentina and Venezuela among other countries, says Gustavo Garrigo, Manager at Globant Chile.

Gustavo Garrigo, Manager at Globant Chile

“There are a huge number of professionals here in Santiago. And that means there are many companies here too. There is a need for global organizations to have a presence in Santiago,” he said.

Decentralization efforts have been made by recent governments, and those efforts have, in the main, worked. Between 2000 and 2016, the country saw the largest reduction in regional economic disparities among all OECD countries. But despite that, the country still had larger disparities than average among OECD nations. 

Now, however, another force is pushing decentralization. The arrival two years ago of Covid-19 changed the priorities for professionals who’d previously sought the cosmopolitan energy of the capital.

“At our peak we had north of 200 employees, of 250 in Latin America, based in Santiago,” Lewit explained. The number of those based in the capital has now dropped by about 25%, and with Nisum now working under a different work model, that number could fall further.

Value Proposition

The willingness for tech workers to leave Santiago is set to benefit other companies. Evalueserve, a global analytics partner whose Chile office is based in the seaside city of Viña del Mar, around 80 miles north-west of Santiago, could be one.

Carolina Zamora, Chile Country Head at Evalueserve

“There is going to be some migration of professionals from Santiago. Cities like Viña del Mar, or Puerto Varas in the south and small cities like Pucón, should benefit,” explained Carolina Zamora, Chile Country Head at Evalueserve. 

Whether in tech or BPO, English still doesn’t come easy in Chile. Though initiatives have led to a noticeable difference in just the last decade, English standards still remain below those found in Central America, Zomora explains. But international talent reaching Chilean shores are also helping to overcome the issue.

“Chilean immigration laws are very streamlined and about 30% of the workforce here are international hires,” she explained.

Yet in the same way that Chile’s BPO industry has been a victim of the country’s broader success and is now hoping to pursue premium services, the pandemic that has freed people to move away from the capital has also made it more attractive to international companies, Lewit suggests.

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Rising tech salaries around the world, particularly for senior roles, mean that the disparity between wage demands in Latin American cities has decreased. With the strong infrastructure already present in the country, its political and financial stability, and the existence of a mature base of international companies already in the capital, Chile can be seen as more attractive than ever. 

Santiago’s Nearshore journey may be about to truly begin.

“With the ease of doing business here and the related costs of operating in other regional competitor cities, I think the value proposition of Santiago is very strong,” he said. 

The Facts

Population: 6.7 million in the metropolitan area (as of 2019)

Universities: 9 universities ranked within QS World University Rankings

Languages: Chile considered to have “moderate proficiency” in English by Education First.

Connectivity: Chile ranked top in Latin America for broadband speeds by SpeedTest

Transportation Infrastructure: Santiago International Airport

Peter Appleby

Peter is former Managing Editor of Nearshore Americas. Hailing from Liverpool, UK, he is now based in Mexico City. He has several years’ experience covering the business and energy markets in Mexico and the greater Latin American region. If you’d like to share any tips or story ideas, please reach out to him here.

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