2024-11-07 12:21:00
2004, Software and Computer Services Industry Promotion Act (or “Software Law” for short), it is recommended to promote the development of this industry through the following methods: Tax incentives and support for research, exports and the creation of qualified jobs. In the same spirit, the 2019 Knowledge Economy Promotion System extends these incentives to innovative fields such as biotechnology and artificial intelligence. Therefore, over the past two decades, under governments in different political spaces, the IT industry has been searching for the ideal environment to become one of Argentina’s economic engines.
Knowledge Economy: Can Argentina Become Silicon Valley?
During that period, The science and technology industry is the fastest growing industry in our country and has become one of Argentina’s economic engines and one of its main sources of exports: we have 12 companies named “unicorns” (That is, worth over a billion dollars) y They are all technology-based; Additionally, two-thirds of local technology companies are exporters. Argentina is also the country that receives the most foreign investment in this sector: all the major development companies in the world today operate in our country.
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However, If we compare with other countries in the region and the world Who are our competitors in the IT export market, Argentina’s growth rate is lower; Loss of the industry’s international status. During the last quarter of the last century, knowledge industries grew exponentially around the world, and Argentina was able to ride this wave. But there are businesses in other markets that see it better than we do, or are more aligned with their plans and have grown more.
We have capitalized on the global wave of growth brought about by digital transformation, but we have not reached our full potential. Everything suggests that Argentina’s growth rate could be much higher than it currently is. Why can’t we do the same when the political context is always more or less supportive of it? ¿Have we not developed a coherent and sustainable export plan all along? Does this make the company more attractive to outsiders?
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let us remember this The driver for IT exports continues to be that the domestic market is small and takes up little time on available talent.. Argentina’s digital transformation has been slow: our consumption of complex applications is low because the SME industry in general has not transformed. Therefore, surplus talent is Argentina’s export in a context where world markets are starting to demand more and more. Just like other countries.
In addition to a favorable political environment, efforts to overcome the ups and downs of economic conditions have also diverted us from a more strategic and long-term view. Therefore, with some exceptions,Our tech industry has positioned itself as a significant exporter of high-quality resource labor hours at international costs; rather than as a market betting on getting the most out of it, Make the necessary investments to achieve this goal.
Hey, The IT industry is debating how to avoid losing international competitiveness on pricefrom the depreciation of the dollar; and even considering moving their operations to other countries where today’s labor force is more economical. I believe the focus should be on producing value offers that are recognized for their quality, knowing the market will pay for it, rather than continuing to compete in a market that prioritizes volume and lower margins; and will serve as a benchmark for the industry Entrepreneurs save valuable time that is now allocated to pricing and payroll strategies.
What is happening indicates a change in the economic environment. This confirms that the industry as a whole should aim for leadership based on the quality of its solutions, since maintaining it will not depend on other factors.
* AW Global Partner and Director
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**Interview with Dr. Laura Gonzalez, Expert in Technology and Economic Development**
**Interviewer:** Dr. Gonzalez, thank you for joining us today to discuss Argentina’s promotion regime for the knowledge economy. It’s a fascinating initiative that has been ongoing since the introduction of the Software Law in 2004. Can you give us a brief overview of how this regime has evolved?
**Dr. Gonzalez:** Thank you for having me. Yes, the Software Law was indeed the first step in promoting Argentina’s software and computer services industry through tax incentives and research support. Then, in 2019, the Knowledge Economy Promotion System expanded this framework to include innovative sectors like biotechnology and artificial intelligence. This shift reflects a recognition of the potential these industries hold for driving economic growth.
**Interviewer:** It seems there has been considerable growth in the science and technology sector, with 12 “unicorn” companies emerging. What has fueled this growth?
**Dr. Gonzalez:** Indeed, the science and technology sectors are among the fastest-growing in Argentina. The government’s incentives have played a significant role, along with the country’s high level of technical talent. Additionally, Argentine firms are increasingly exporting their services, which has been crucial for companies looking to scale. Interestingly, Argentina is attracting considerable foreign investment as major global development companies wish to tap into local expertise.
**Interviewer:** However, you’ve raised some concerns about Argentina’s international competitiveness. What challenges does the country face in maintaining its status in the IT export market?
**Dr. Gonzalez:** Yes, when we compare Argentina’s growth with other regional players, it becomes evident that we’re lagging behind. Despite having the talent, the growth rate is lower due to several factors. We haven’t developed a coherent or sustainable export strategy that aligns with global trends, and this lack of strategic focus can make it less attractive for international businesses to invest further in Argentina.
**Interviewer:** What do you think is necessary for Argentina to fully capitalize on the digital transformation wave?
**Dr. Gonzalez:** To reach our full potential, a multifaceted approach is needed. This includes fostering stronger partnerships between the public and private sectors, improving access to venture capital, and providing better support for startups. Also, we must ensure that our educational institutions are aligned with market needs to prepare students for high-demand jobs in tech.
**Interviewer:** In the context of recent political changes in Argentina, how do you see the future of the knowledge economy in the country?
**Dr. Gonzalez:** Political stability and supportive policies are critical. We hope that incoming administrations will continue to prioritize the knowledge economy and understand its importance for sustainable growth. By doing so, Argentina can indeed position itself as a global tech hub and potentially become our own version of Silicon Valley.
**Interviewer:** Thank you, Dr. Gonzalez, for sharing your insights. It’s an exciting time for Argentina’s knowledge economy, and we look forward to seeing how it evolves.
**Dr. Gonzalez:** Thank you for having me. I share your enthusiasm and hope for a bright future in our tech sector!
