U.S. techies heading to Latin America
The exodus of young Latin American entrepreneurs to Silicon Valley and other U.S. technology centers might soon become a two-way street — growing numbers of U.S. techies are heading south to benefit from generous aid packages for high-tech startups.
Brazil, Latin America's biggest country, has followed the steps of Chile by offering domestic and foreign high-tech startups nearly $100,000 in government aid, plus free office space, business mentoring and legal and accounting services.
Under the public-private program, known as Startup Brasil, up to 25 percent of the selected companies will be from abroad and have to commit themselves to staying in Brazil.
Startup Brasil operations director Felipe Matos says 909 aspiring companies, including nearly 60 from the United States, signed up for the first round of applications for 50 slots, which closed on June 14. The United States led the foreign applications.
“We want to attract interesting minds and people who can help us become more competitive,” Matos says.
Separately, Brazil has announced plans to significantly increase work visas for foreign high-skilled workers and university graduates in an effort to solve the country's growing shortage of professionals.
Asked why U.S. entrepreneurs would want to move to Brazil, which according to World Bank studies is among countries with the most cumbersome red tape for new companies, Matos says there's much more room to grow in Brazil than in mature economies. “Brazil is Latin America's biggest consumer market and there are already 80 million Internet users who are only starting to buy things online.”
Chile began its Startup Chile program three years ago and more than 7,200 entrepreneurs from more than 50 countries have applied so far. Of those, 670 have already been selected and are receiving $40,000 each, plus free office space and work visas. The average applicant is 27 years old.
Unlike Brazil's program, Startup Chile is aimed at bringing mainly foreign startups and doesn't require them to stay in the country.
Executive director Horacio Melo says of the 670 startups that have been accepted, more than 160 are from the United States. After they spend six months in Chile and do their work, including networking with local entrepreneurs and lecturing at universities, they are free to go home, or wherever they want. About 30 percent of the foreign startups stay in Chile, he said.
As to why U.S. startups would be interested in going to Chile, he explains that “We accept startups at a very early stage, when they are seen by angel investors in the United States as too risky. So they come here, prove their hypothesis and then they can move on.”
Startup Brasil, Startup Chile and similar programs being contemplated in Colombia and Peru are great ways to help Latin America internationalize its high-tech industries and compete in the global knowledge economy. And such programs help generate the kind of circulation of talent that China, India, South Korea, Taiwan and other technological powers have been developing for decades.
Andres Oppenheimer is a Latin America correspondent for The Miami Herald.