Latin American countries out-perform on digital development worldwide, according to Telefónica’s recently released Index on Digital Life. Colombia and Chile, along with predictable countries like the UK and Australia topped the index of 34 countries, relative to GDP per capita, ranked using these three criteria:
Latin American countries showed great progress in relation to economic performance, whereas Italy received the lowest score for a G7 country.
Historically, Latin American startups have struggled with funding, but that’s changing. Take a look at these three examples of funding success stories:
Brazilian Fintech Nubank – $53m
Mexican Online Micro-lending Kueski – $10m
Mexican-Chilean On-demand Grocery Delivery Cornershop – $6.7m
The index suggests Western countries can learn a few things from Latin American governments who have embraced digital development as the key to a sustainable economy.
Chile out-performs all of the countries in the index when it comes to digital entrepreneurship. To understand how and why the country’s young ecosystem is thriving, I spoke to Rafael Lopez, co-founder of Smartbox TV, based in Santiago, which provides interactive applications for pay TV platforms and television stations in ten countries across Latin America. Lopez credits former President Sebastian Pinera, a billionaire businessman who ended 20 years of center-left rule when he took office in 2010, with encouraging men and women to pursue entrepreneurship and instituting multiple policies to support them. Six years later, Lopez says founders in Chile are benefitting from the continuation of Pinera’s vision for digital development.
Amy Guttman: How much have things changed in Chile?
Rafael Lopez: Former President Pinera began a number of initiatives to help startups. We applied for everything – every single program we could. We won entry into 4-6 different programs. It was perfect timing for us. Pinera believed that entrepreneurship and startups are the engine of different economies. Just five or six years ago, people would graduate from college to pursue a job at a big company, rather than consider starting a business of their own. They began weekly meetups and many other programs.
Guttman: What policies and initiatives make Chile, in particular, a great place to start a business?
Lopez: I participated in Global Connection, which allowed me to travel to Silicon Valley and work with an incubator for four months, developing my business. There are programs for every stage of development. The government established Startup Chile to attract early-stage entrepreneurs to startup in Chile, and get involved with the ecosystem providing them a lump sump with the agreement they stay in the country for six months. The idea is to cultivate an environment of entrepreneurship and encourage new ideas.
Startup Chile is the government’s accelerator with three distinct programs – one for pre-acceleration, another for those with a functional product focused on seed funding, and the third concentrating on scale and getting a startup incorporated. There are many other programs.
The government has been very vocal and active in marketing programs.
Guttman: What other factors have helped Colombia compete against its neighbors?
Lopez: We have the best growth rate among the three countries: Chile, Colombia and Peru, and the most stable politics and economies. We also have economic treaties with several countries in Europe and Asia.
Guttman: How has your own startup grown in the last five years and how active are you in the ecosystem?
Lopez: We helped build a university program and curriculum for a design career. I teach a course on entrepreneurship for engineers.
We’ve been growing 80 percent in revenue every year and generated sales of more than one million dollars last year. We started with just the two of us, and now we’re 32 people. We recently opened a representative office in Oakland and we’re working with big clients; we broadcast MLB from the US, the football league in Chile, Colombia and Peru, the baseball league in Venezuela, and others.
Guttman: Apart from the fact that Chile and the rest of Latin America are still challenged by the lack of early stage investors and advisors, are there any downsides to the government’s efforts?
Lopez: One negative consequence is that young people now think being an entrepreneur is easy and cool – that we work whenever we want, wear whatever we want, and do whatever we want. Every month, I receive ideas from people who want to be founders. They don’t realize you have to eat, sleep and drink it to be successful.
This article was written by Amy Guttman from Forbes and was legally licensed through the NewsCred publisher network.
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