Software sales represent 1.82% of the Uruguayan GDP and for 2020 the exports will sum 1000 million dollars. But the loss of workforce is a setback to keep growing. Because of that reason hiring foreign workers is an attractive option for an 83% of software companies.
From the outside it looks like the house of a powerful family, but inside there is a company where computers are scattered around game rooms, a Jacuzzi and a meditation corner. At a 15 minutes distance there is another company, which in its hallway has color lights and a mirror ball, like a discotheque. This is how the 450 Uruguayan software companies try not to look like a traditional industry, which in its case moves 1.82% of the country’s GDP. Or, in reality they are trying to retain workers in a staff shortage context.
Nicolás Jodal one of Uruguay’s technology gurus says that the workplace of a software developer has to be “more like an artist atelier than a traditional office”. But behind theories about stimulate creativity or improve productivity, all’s fair to retain talents. According to a Uruguay XXI estimate the industry has around 12,700 employees and needs to add 500 every year to support the expected growth in the next decade. Because of that, looking for foreign workforce is an extended option.
It didn’t take long to convince Carloluis Rodriguez. In Cuba, where he was born 26 years ago, he earned USD 15 per month and in Uruguay he was offered 2,000. Talks to hiring him started two years ago, after a friend suggested his name to the owners of the company UruIT. It was a phone and e-mail selection. The 14 megabytes allowed by the University where not enough for Carloluis to check his email in La Habana. The Uruguayan company paid in advance to buy the flight ticket to Montevideo and helped him to find a residence. Later, a Uruguayan girlfriend advised him to not take all his meals combined with rice and to switch Cuban salsa music to Uruguayan cumbia pop.
Carloluis is one of the 200 Cubans who arrived in the last three years to work in Uruguay. They are the larger foreign group in the software industry, representing the 28% of expatriates working in the area, according to a Uruguay XXI report. And, besides not being the first nationality that Uruguayan employers name, all agree that Cubans had a “solid training.”
In UruIT a company with 60 employees, there are 4 Cubans. The economic situation and the needs of professional growth are decisive to opt for the Uruguayan software industry. The “zero unemployment” from more than a five-year period and the economic growth at a 25% average, is rich soil to a constant salary increase.
The sales declared by the Uruguayan Chamber of Information Technology (CUTI), exceed 1,045 million dollars, USD 814 million if the state owned company ANTEL is excluded.
Since 2008 software exports are around 200 million dollars and in 2013 reached USD 300 million. For 2020 exports are estimated in USD 1000 millions.
But not all is peaches and cream. Uruguay has been ousted as the region’s main software exporter per capita. Chile and Costa Rica dispute the first place, but “the measurements vary and there are services, like games that are not measured”, says Jodal. “It could happen that others countries growth its exports or that Uruguay stopped selling licenses and focus in other uses like the platform Pedidos Ya”.
The exports reduced the impact of the economy deceleration the country is passing by. 23% of non-traditional exports are from Information Technologies. But the companies who work for the internal market are suffering the shock. The sale of IT services fell 11% in the first trimester of 2016, said the Chamber of Commerce.
The fame of soccer players Luis Suarez and Edinson Cavani and the image of former president José Mujica were a boost drive for the software industry, says Javier Peña economic consultant from the Chamber of Commerce. Without intending it, the football players and the former president “helped to make Uruguay more well-known”. But is not enough. “We have to impose our country brand more to compete with Costa Rica, Colombia and Chile, our main contenders”.
Those who came to invest in the Uruguayan software industry were attracted by the country’s legal certainty, and the economic stability, says an inquiry made by Uruguay XXI about foreign investments. The multinational company Globant present in 11 countries choose Uruguay because “there are people with strong gifts and an expansion potential”, explain Matías Boix one of Globant technical directors.
The free trade zone regime is not an incentive for the software industry. “For Uruguayan companies is the same because the are exonerated from export taxes”, says Andrea Mendaro CUTI’s general manager. According to the last reports the government resigned in 2013 USD 15 millions in taxes for that reason.
But besides incentives Mendaro says that there are other obstacles in the business development, such as deficient air transportation connectivity. “To visit a client in India means many hours in flight connections, which results in a project cancellation or on set up an office there”. The second and main obstacle is that students start to work before graduate and it’s hard to obtain new resources.
“In the last five years we have interviewed more than 5000 potential workers; I believe that we have saturated the offer, says Marcelo López from UruIT.
Carloluis has received “many work offers” in this year and a half. That friend who recommended him, was hired by another company. According to the Uruguay XXI report, the 83% of consulted business owners wish to have foreign workers. And 54% of companies already have employees form other nationalities.
One strategic solution suggested by some CUTI partners is trying to equate the number of women dedicated to technology to men. Today the relation is 7 to 3, and is more unequal in management positions.
In the 2800 IT profiles available at the job search website gallito.com only 18% are women. Increasing this percentage is one of the challenges according to María Simon, Dean of the Public Engineering University. But besides genre “in the short place we need to duplicate the number of engineers to fullfill the market needs”.
Engineers like data specialists and apps developers will have 744,000 new work places in the World in 2020, says a report from the World Economic Forum. Uruguay has one graduate engineer per 8000 inhabitants. In Chile the rate is one per 4500. In South Korea the rate is one per 625.
Today the enrolment is growing and surpasses 7,000 students, but graduates are 270 per year. From them 37% studied information technology and 18% electronics, the two closer degrees for the needs of the software market.
“There is a difference between the students of the public university, more proficient in hard science and the students of private universities more proficient in marketing”, says Javier Minhondo, another referent from Globant and an advocate of the software industry potential “for a small country like ours”.
With the same positive vision, Jodal points out that Uruguay has the chance to bet in “the changes that are happening today, like the internet of things”. Until now, the local industry stands out in software for banks and financial companies, games, logistics and healthcare.
To gain new opportunities is necessary to think in the next steps. “The software industry is like fashion”, concludes Jodal. “We need to know what will be trendy the next season”.
Source: El País