Colombia Dominates the International IT Services Market

By: TEAM International | December 6, 2022 | 14 min

Even against heavyweights such as Brazil or Argentina, nearshore Colombia has opened up as a powerful IT destination for international companies. Back in 2014, the Medellin delivery center complemented our US and European operations, increasing our tech capacity and paving the way for TEAM International Portugal, Mexico, Argentina, and other offices.

TEAM didn’t choose this country randomly. After a thorough market and business analysis, multiple interviews, and consultations with experts, we could hardly ignore the promising features of the Colombian IT industry. As a result of our synergy and hard work, TEAM LATAM has welcomed its 500th employee and joined the ranks of the biggest local companies. So, looking back at our experience, why should you choose Colombia for nearshore IT services, and what opportunities in terms of technology and innovation does it have to offer? Let’s see.

1. Thriving tech infrastructure and vast startup scene

People often call Colombia the Silicon Valley of the LATAM region. Especially after the revitalization of Medellin and its acquisition of the title of Smartest City in the world, generally thanks to the wide use of artificial intelligence in software there.

The country leverages tech advancements to boost economic evolution by providing the proper infrastructure to innovative businesses to help them benefit from nearshore in Colombia. The government’s willingness to drive domestic entrepreneurial and technological development is evident. Below we list only a few of the biggest initiatives and programs aimed at fostering digital innovation:

  • Colombia 4.0 is the major annual technology summit in the country supported by MinTIC, which brings together digital and IT industries.
  • project helps startups validate their digital business ideas and develop sustainable financial models by providing critical tools and mentorship.
  • Free trade zones (FTZ) and tech parks Ruta N is a government-backed organization located in the heart of Medellin. It is the most popular center of business and innovation that promotes tech and entrepreneurial talent development.
  • ICT Modernization Law improves the digital landscape of nearshore Colombia by encouraging companies to develop top-notch digital projects and facilitating access to IT services. One of the recent ICT initiatives is aimed at educating 100,000 new programming specialists by 2022, which has been largely successful.
  • Top Gun Lab Colombia is a TEAM International program designed for technical university students to deepen their knowledge and gain vital practical experience with modern technologies. Our free IT courses aim to develop local talent and offer an internship working on real projects at our company.

Also, the country has become known for its robust startup scene and the rapidly growing local innovation ecosystem. Bogota and Medellin have become top locations for foreigners and digital nomads to launch their businesses. This, among other things, helped nearshore Colombia to become the fifth highest prospective South American country for startups. It’s why startup investments have grown from $188 million in Q1 2018 to $457 million in Q1 2022.

2. A robust and business-friendly economy

Notably, the economy of Colombia ranks fourth strongest in South America. Meanwhile, the economy of Bogota is larger than several LATAM countries, and it keeps growing. The country promotes Colombia nearshoring and ICT services while vigorously chasing foreign investments, establishing free trade zones, and providing tax incentives along with other incentives to attract international players.

As a result, nearshore in Colombia has attracted over $1 billion in investment from 60 countries in nearly two years.

3. Strong outsourcing performance

The country has done well to rise and position itself as a thriving software outsourcing provider and leading LATAM country for digital skills. Nearshore Colombia outsourcing has experienced colossal progress as global demand for app development and e2e nearshore solutions Colombia offers have increased.

As a rising IT outsourcing hub, it now hosts over 5,000 tech companies, including big-name brands such as Amazon, Rappi, Hubspot, Accenture, and TEAM international.. With the delivery center in Medellin, TEAM has expanded its software development outsourcing capabilities and facilitated access to the brightest talent in nearshore Colombia for many companies globally.

4. Growing pool of highly qualified IT experts and tech communities

The country spends 4.4 percent of its GDP on education, a fair share considering that the US spends 5 percent of its GDP on the same. Their education system has a strong technology focus and offers 30 award-winning tech centers and universities, with three listed in the top 20 in LATAM..

Moreover, nearshore Colombia IT specialists have the highest engineering tertiary degrees. They’re proficient, possess various skills, and have a decent level of English for seamless collaboration. With a robust labor pool of 60,000+ specialists and focus on nearshore software development, Colombia ranked eighth among LATAM countries in the Global Talent Competitiveness Index, surpassing Brazil. Also, local software engineers create popular JavaScript communities and hold specific meetups, including BogotaJS and MedellinJS, with a total of 3000 members.

5. Geographical proximity and time zone overlap

As the country is situated in the northwest, it’s easy for our LATAM software engineers to collaborate with most US-based teams. By operating on overlapping hours, you can maximize productivity and output of the e2e nearshore solutions Colombia outsourcing companies offer.

These facts offer many benefits to organizations that prioritize collaborative partnership and problem-solving, resulting in accelerated time-to-market. In the end, working in the same EST and CST time zones achieves smooth communication, better productivity, and improved engagement rates. An additional bonus of nearshore in Colombia is quick trips to and from business centers so you can visit teams regularly.

6. Same cultural values and language fluency

Western and northern business practices have heavily influenced LATAM business culture. Driven by an agile, enthusiastic approach to tackling issues, it’s identical to that of the US.

The cultural rapport between the continental Americas is an undisputable benefit of nearshoring Colombia you shouldn’t neglect. When outsourced teams share the same values and business methods, communication and mutual understanding will simplify and create a smooth collaboration flow. So, cultural relativity is one of the aspects that puts nearshore Colombia at the top of IT outsourcing destinations lists.

7. BPO and e2e nearshore solutions Colombia’s value propositions

IT services and BPO sectors are the major sources of investments in nearshore Colombia. Whereas ten years ago the companies there mostly offered customer service, they are now shifting to providing more value-adding services. As a leading provider of e2e nearshore solutions, Colombia’s delivery centers are good at software design, engineering, and maintenance. A skilled workforce and the country’s location result in a strategic source of BPO and IT services at a high level, boosting this sector significantly.

It’s among the top LATAM countries with a big number of IT service deals, which makes it an attractive destination for organizations seeking e2e nearshore solutions. Colombia’s tech specialists have the necessary knowledge and expertise in financial app development, intelligent business automation, blockchain, and data analytics solutions.

Key takeaways

As more US companies turn to nearshoring, Colombia is on the point of greater growth in the IT outsourcing sector. Apart from competent software engineers, the strong focus on IT infrastructure and tiny time zone difference makes it a perfect place for organizations to expand their operation.

When you have a complex project that demands real-time team collaboration, you will benefit from e2e nearshore Colombia offers and find the balance of convenience and high quality. Our LATAM teams allow us to ensure resilient processes and seamless, timely project delivery for our clients in the USA, South America, and Canada. Our deep expertise in professional IT consulting has also helped leading organizations access the talent they needed to build value-added digital products in record time.

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