Yes, Latin America struggles with these problems but to a far lesser degree than we may think. And, in fact, Latin America is both more economically significant and more developed both in terms of markets and societies than we may realize.
These are the key arguments presented in a Spanish book called “Nuestra Hora: Los Latinoamericanos en el Siglo XXI,” or “Our Time: Latin Americans in the 21st Century,” written by Chilean entrepreneur Raul Rivera Andueza. According to Rivera, of the 600 million people living in the region, nearly 400 million are in the global middle class. He also writes that their ranks are growing by 5 million per year and that Latin America’s median income is about $10,000 per year — far higher than median incomes in many other developing regions. I visited Brazil and Chile in April. In both countries, I glimpsed firsthand the economic revolution Rivera writes about. Here’s the upshot: The economies of Latin America now boast a collective — and impressive — GDP of $5 trillion.
Latin America is also home to some of the most dynamic, large companies in the world. Cemex, founded in Mexico in 1906, has fleets of trucks, which receive signals from satellites to run cement deliveries. The system is driven by sophisticated logistics software. Petrobras, based in Brazil, has gained renown as an oil exploration and refining company tapping modern seismic and structural engineering technology to find huge reservoirs beneath layers of salt miles below the ocean surface. These salt barriers had stymied petroleum engineers for decades before Petrobras and other exploration pioneers figured out how to peer through the salt and then secure drilling rigs and pipes in this shifting salt layer. Then there’s Embraer, the Brazilian aerospace company, which deploys advanced avionics and fly-by-wire technology.
What I saw on my trip, too, was the emergence of Silicon Valley-like startup cultures that have a homegrown flavor and ethos. Startups are being launched in Chile, Argentina, Brazil and Mexico to create the same Internet niches as companies in the United States and Europe. Argentina-based Ombushop, for example, aims to simplify the building and launch of an online store. This is a niche that Shopify, in Canada, has popularized and in which Amazon also has a large presence. Ombushop aims to achieve the same success in Latin America. Hadza, in Chile, is developing a platform that allows viewers to enjoy simultaneous synchronized video sharing experiences. This taps into the online gaming dynamic and the impulse to share experiences. These are just two of the hundreds of startups with global reach that have launched in Latin America.
Even more intriguing, efforts to bring additional tech talent down to the region appear to be working well. Start-Up Chile, an innovation experiment that I helped develop, offers tech startups incentives to locate in that country and has pulled in some marquee companies, such as real-time crowd-sourced translation service Babelverse. A high-profile startup that recently won a bake-off at Europe’s LeWeb Startup Competition, Babelverse took advantage of the Start-Up Chile program to extend its runway, reduce its burn and take advantage of a more favorable regulatory and legal climate.
All of this paints a more nuanced picture of Latin America. Yes, the region faces tremendous problems. Yes, it is resource rich due to large amounts of arable land and mineral wealth. But Latin America is rapidly expanding in a way that, I predict, will allow it to quickly outgrow many of its problems and to deliver a Western-style middle class to many more of its citizens. This is what Rivera Andueza writes about in his book. The global economic pie is growing far faster in Buenos Aires, Santiago, Bogota, and Sao Paulo than many of us in the West realize. And the sooner we start to view Latin America as an economic equal and one of the richest markets in the world, the faster we in the U.S. can learn from the advances of our cousins to the South. Latin America matters and it will matter even more as the U.S. looks for sources of growth and receptive markets outside of its borders.
Read more news and ideas about Innovations and follow us on Facebook, Twitter and Pinterest.