Nearshore Americas

Q&A: A Re-Examination of Chile, the ‘Germany of South America’

Chile stands out as one of the most politically stable and socially developed countries in Latin America. It tends to perform strongly within the Americas in global indexes which rank government transparency, tech development and R&D

Many of Chile’s qualities should put it as a major shopping spot for engineering talent and tech services. Nevertheless, it tends to be overshadowed by other regional players such as Brazil, Argentina and Mexico, who are better positioned in the minds of US companies. Why?

In an effort to better understand Chile as a source for nearshore IT, we spoke with Christopher White, founder of IT staffing agency RadHires and digital products developer sneakers. Chris has been sourcing engineers from South America for almost a decade and has spent the past year exploring Chile and its potential for tech.

The following interview assesses Chile’s credentials as a Latin American tech spot and sheds light on its positioning in relation to other players in the regional market. It also touches on other topics, such as the latest trends in sourcing from South America and the state of the project pipeline coming from US clients.

NSAM: Every time we look at Chile, we notice that wages are fairly up there, at least compared to the rest of Latin America. Would you say that’s a fair statement?

Chris White: For sure. A friend describes Chile as the Germany of South America. What I find in Chile is that, population-wise, it is a small country, at least when compared to Brazil and others in the region; orders of magnitude smaller. But if you’re looking for senior level engineering talent that you’re going to pay a premium for, that is a great place.

I wouldn’t look there for entry-level talent. I look there for seniors in more complex areas, like ML/AI, DevOps, things like that.

NSAM: Entry-level talent is quite expensive over there, I presume.

Christopher White, Founder of RadHires and sneakers

Chris White: Relatively speaking, yes. Senior-level people are more expensive, so junior-level people are going to be more expensive as well. Certain clients are willing to pay a premium for senior-level talent. I hate to use the word “unicorn”, but something like that: a mega-developer, somebody that has the experience at a more senior, architectural level. 

NSAM: We’ve heard that some clients in the US are willing to pay wages in Latin America that are either on par or almost on par with what they’re paying onshore for senior level engineers or experts in niche technologies. Does that happen in Latin America in general?

Chris White: I would say that’s a fair statement. It’s just a limited pool. If you have very complex needs in those areas, there’s only so many people in the US and within US time zones with those skills. If someone is really solid, really experienced and has worked for US companies before, managing big data sets and things like that, they could charge a pretty good premium that’s on par.

NSAM: Why do you think Chile has a strong pool of senior-level talent and so many experts on high-knowledge technologies? 

Chris White: I think it’s the university system. For a small country, they have a couple schools, like the University of Chile, ranked in the top 10 South American tech schools

With a lot of things concentrated in Santiago, it helps pool that talent and knowledge. I think there has been a long history in Chile of technology and engineering. That puts Chile on the map for tech. 

If you’re looking for senior level engineering talent that you’re going to pay a premium for, that [Chile] is a great place

Brazil is so big. Argentina is fairly big too. There’s a lot of nearshoring companies and agencies working from both countries, which tends to dwarf much of what’s happening in the rest of the region from a nearshoring perspective. A lot of the marketing in the US for nearshoring services focuses on Argentina and Brazil, so Chile has been flying under the radar, in a way.

Unless you know about it, go there and have a smaller talent pool working there, for which you pay a premium, you just might not think to source from Chile. 

NSAM: Which sorts of skills and profiles are hot right now in the US? What are companies looking for in Latin America?

Chris White: I would say ML/AI is picking up steam. Some people still see US engineers as being the crème de la crème in that area. China is doing a lot of amazing stuff with AI, but there are language barriers. Given the complexity of a lot of ML/AI, a lot of that will start getting nearshored. I’ve been working also with some clients in areas where I haven’t traditionally worked before: SEO, EPC, stuff more oriented to marketing services. 

Flutter is picking up steam also. I can see more demand for Flutter developers in South America. There’s still strong demand for front-end developers, AWS architects and computer vision. A lot of traditional stuff is still going on. 

NSAM: We’ve been hearing a lot of concern from Nearshore IT vendors over a slowdown in the project pipeline coming from the US. Are you seeing that too?

Chris White: Everybody is dealing with project slowdown, not only in the Nearshore. US companies are suffering from it too. What happened was that, during the COVID era, everybody got lazy because it was so easy to gain business. There was so much money going into tech that you got business doing some basic sales stuff.

But now, given the emergence of AI, the macroeconomic environment and the resetting of things in the US, so to speak, after COVID, you are back to an environment where you have to be good at selling.

What you’re going to see happen is that a lot of these [tech] agencies are going to keep shedding people, laying them off. There’s going to be a reckoning.

Things are picking up a little bit now that everyone has acknowledged that these interest rates aren’t going away, that AI is interesting and it won’t ruin my business. 

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Also, the summer’s over. April-May is the last chance to do some of your business. Once June and July kick in, business development gets slower. That said, once September comes by, Americans are like “I have a lot to do before the end of the year. I have to spend this budget. Let’s go”.

Things will pick up. It’s not going to be like 2021-2022. Some layoffs will probably persist, yet I can see things getting better in 2024. But everyone will have to double down and do a better job in marketing and sales. It’s just a different world.

Cesar Cantu

Cesar is the Managing Editor of Nearshore Americas. He's a journalist based in Mexico City, with experience covering foreign trade policy, agribusiness and the food industry in Mexico and Latin America.

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