Hiring in-house engineers. Yep, it’s still as expensive as ever - especially in the US. Did you know the average salary of an entry level software engineer in the USA is $72, 790?

1. Latin America:
The Future of
US Nearshoring.

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Digital Knights is a Berlin based tech concierge service
connecting startups, corporates, and entrepreneurs
with pre-screened tech resources.
Because the right team is everything.

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Hiring in-house engineers.
Yep, it’s still as expensive as ever
- especially in the US.

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Did you know the average salary of an entry
level software engineer in the USA is
$72, 790?

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Not to mention how
long it takes to hire one...

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… it can take years.

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And even then, how do you stop
your team getting bored or turning
down an offer from a larger company?

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So, what are businesses doing to
overcome these hurdles?

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Outsourcing.

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Or, more specifically: nearshoring

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Nearshoring is becoming a super attractive
option for American software companies who
need extra resources for their digital needs.

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For the US, Latin America is becoming
a logical destination for this outsourced
development.

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Quality engineers, English proficiency, and
governmental assistance are helping transform
Latin America into a nearshorers’ paradise.

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In fact, according to the A.T. Kearny Global Service
Location Index, 5 Latin American countries now
rank in the top 20 for offshore partnerships.
Brazil - 4th
Mexico - 8th
Chile - 9th
Costa Rica - 19th
Columbia - 20th
2016 GSLI Rankings

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Not to mention the average corporate tax
rate is a full 12.71% lower than the USA.
Latin America: 27.29%
US: 40%
EU: 22.09%

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And Latin America’s Ease of Doing Business
Index has been increasing year on year:
Mexico: 73.72 (38th)
Peru: 71.33 (50th)
Costa Rica: 68.55 (62nd)

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On StackOverflow, Latin American Programmers
rank very highly, so it would appear the
knowledge is there.
But what about practical application?

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Locations
Country Profiles and Competencies

19. Brazil’s Tech scene is booming despite a tough economic recession.
The Brazilian software and IT services industry reached $22.4 billion in
2009, and the government offers incentives for offshore work, such as
income tax breaks for spending on workforce training and R&D.
Brazil
19

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Guadalajara, Mexico’s ‘Digital Creative City,’ is being dubbed
‘The next Silicon Valley,’ thanks to government subsidies and
affordable talent which is attracting foreign tech giants.
Remote teams in Mexico are 20% cheaper than their US counterparts.
500,000 professionals within IT (2014) and established Universities
producing plenty of new computer science graduates each year.
Mexico

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Costa Rica’s IT labor force has been growing 6.5% every year since 2005
and 6000 IT literate students graduate every year, adding to an already
impressively educated population.
IBM runs a program to help universities shape their courses specifically
for the IT sector.
All this has added to an active developer community, regularly hosting
hackathons and encouraging women’s involvement in tech.
Costa Rica

22. The software development sector has shown an average growth of 11.5 %
annually, becoming one of the most solid and reliable economic sectors of the country.
However, changing fiscal policies can still make it difficult to invest in Argentina,
and has put off a lot of potential investors.
Argentina
22

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A growing economy, initiatives such as The Jala Foundation, and
governmental support are making Bolivia pretty attractive for outsourcing IT.
Bolivia

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$6.8bn software and IT services industry.
13,000 IT Graduates each year.
A key market for the Latin American outsourcing operations of several
multinationals, including HP (NYSE: HPQ), Citibank (NYSE: CB) and Siemens,
as well as BPO firms such as Teleperformance and Capgemini.
ITO represented ~40% (37.9%) of the outsourcing industry.
Colombia

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Start-Up Chile, an investment program in the country lets you apply for
$30,000 to start a business.
Chile also has investChile, which operates to increase foreign direct investment
in Chilean companies.
Chile

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Quality of teams
Many Latin American teams that
specialize in mobile app development
and web development have strong quality
ratings and impressive testimonials on Clutch.

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Industry Improvements - Internet Acccess
9 million 4G lines are in Latin America
75% of the region will be covered by 2020
High-speed mobile broadband accounted for 32% of mobile
connections in 2014, set to rise to 68% by 2020
Satellite and telecommunication providers will start deploying
resources to allow remote wireless access to rural communities in
Latin America
Telefónica group has invested $6 million and is about to invest a
further $30 million for satellite receivers and other equipment to
provide connectivity on aeroplanes.

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Time Zones
Overlapping time zones mean:
Better daily communication and Agile
methodologies such as SCRUM can be
utilized effectively.
This is a lot better than the 13.5 hours
difference for India and 7-8 hours
difference for South East Asia

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Culture similarities and differences
The continent shares many similarities with
European culture and has more in common with
the US and Europe than India and China.

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Latin American countries have improved their
national English proficiency rating according to EF
English Proficiency Index 2015
Latin America now lies on the global average for
English proficiency
This is a significant improvement from when the
index began back in 2011
English Proficiency

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Argentina
Colombia
Costa Rica
Brazil
$25 - $49/hr $50 - $99/hr $100 - $150/hr
Mexico
Uruguay
Pricing for Teams

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Argentina
Colombia
Costa Rica
Brazil
$25 - $49/hr $50 - $99/hr $100 - $150/hr
Mexico
Uruguay
Chile
Pricing for Teams - Web Development

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Sources
US Software Engineer Salaries https://goo.gl/BYtx65
Talent Acquisition Timeline https://goo.gl/U91Uxa
A.T. Kearny Global Service Location Index https://goo.gl/EizHOU
Ease of Doing Business Report 2016 https://goo.gl/4Ebj7g
StackExchange Users https://goo.gl/26thcR
Brazilian Software and IT Services https://goo.gl/bFs3UE
Guadalajara, Mexico. https://goo.gl/zXN6dE
Costa Rican IT Education https://goo.gl/1Y1M1I
Costa Rican Hackathons https://goo.gl/RbhXOx
Bolivia’s Economy https://goo.gl/5CEeFw
The Jala Foundation https://goo.gl/s9Rq8m
Bolivian Government Support https://goo.gl/a0z5P8
Colombia https://goo.gl/hbhjed
Colombia’s ITO https://goo.gl/M8oI6x
StartUp Chile https://goo.gl/ffnRjR
investChile https://goo.gl/RqdSxb
Clutch https://goo.gl/nte7Z0
Industry Improvements https://goo.gl/gpdwyO
English Proficiency https://goo.gl/hg80T3
Freelance Pricing https://goo.gl/vmGsDu