Global transformation and the nearshoring opportunity
In a global context marked by geopolitical tensions, supply chain disruptions, and a growing need for business resilience, nearshoring in Latin America is positioned as a key strategy for North American companies. According to the Inter-American Development Bank (IDB), nearshoring could generate an additional $78 billion in annual exports to Latin America and the Caribbean, including technology services, demonstrating its transformative impact on the regional economy.
Factors driving the shift to Latin America
Faced with new global challenges, the traditional offshoring model to Asia has lost appeal due to:
• Rising logistics costs: Long distances and wait times negatively impact operational efficiency.
• Cultural and time zone barriers: Time zone and cultural differences hinder real-time collaboration.
• Geopolitical risks: Trade tensions between the US and China have generated uncertainty about the stability of trade relations.
This has led to nearshoring with Latin America becoming a solution with multiple advantages, including:
• Geographic proximity: Proximity reduces transportation costs and facilitates in-person meetings.
• Time zone compatibility: Improves communication and coordination between teams.
• Qualified talent: Latin American countries like Bolivia have a growing population of highly skilled bilingual developers in emerging technologies.
Strategic benefits of nearshoring
Nearshoring is not only a response to global challenges; it also offers competitive advantages:
•Operational agility: It allows technical teams to scale quickly and adapt resources according to project needs.
•Cost reduction: Although not as economical as offshoring with Asia, it is still more affordable than hiring local talent in the US.
•Technological innovation: The integration of Latin American talent encourages the adoption of emerging technologies like AI and blockchain.
Furthermore, the nearshore model facilitates the implementation of agile methodologies thanks to fluid communication between teams located in similar time zones.
Economic and Social Impact
The increase in foreign direct investment in technology is transforming Latin American economies. According to the IDB, this trend could boost key sectors such as renewable energy, advanced manufacturing, and digital services. On a social level, Latin American developers have access to more favorable job opportunities than in their home countries. This translates into better incomes and quality of life, while stimulating local economies. For their part, North American companies are leveraging accessible talent without compromising quality, thus generating a win-win relationship.
The Time Is Now
The post-pandemic era has accelerated the adoption of nearshoring as a smart strategy to ensure operational resilience. Latin America is poised to become the preferred partner for North American companies seeking geopolitical stability, operational efficiency, and access to qualified talent. With growing demand for technology services, investing now in nearshore partnerships can be decisive before resources become saturated or even more expensive. Nearshoring is not just a fad; it's a strategic response to global challenges. Latin America offers a unique combination of geographic proximity, skilled talent, and technological innovation that positions the region as a key player in today's geoeconomic landscape.
If you would like to learn how this practice can benefit your company, please do not hesitate to contact us. We are ready to advise and support you in your digital transformation process.