According to the latest report from the Observatory on the Knowledge Economy (OEC), Argentine exports in the sector reached an all-time high with $8.1 billion in 2023. The sector is thus positioned as the fourth export hub and will continue to expand this year.
According to INDEC data, in 2023, the main export complex was soybeans with 13,944 million dollars, followed by automotive with 8,900 million dollars and petroleum-petrochemicals with 8,439 million dollars. Unification of trade is essential for services to continue to gain weight.
In the new cycle that Argentina has started with the change of government, The sector attracts potential investment interest. This is confirmed by Olivia, a global company specializing in organizational transformation processes that operates in more than 10 countries.
“Fiscal 2023 left us a clear signal about the need for our consulting services in other markets a growth of approximately 30% compared to the previous year in terms of consultancy and projects” explained Jorge Gatto, partner and Global COO of Olivia.
According to the World Intellectual Property Organization, the knowledge industry employs around 50 million people worldwide. In Argentina the total number of employees registered in related activities has been reached 493,700 people in the first quarter of 2023, an increase of 3.5% year-on-year, according to OEC data.
Ezequiel Kieczkier, founding partner of Olivia, underlined that “the biggest challenge we have today in Argentina is generate export models that transcend the situation and generate long-term and sustainable business development over time, as in the case of knowledge industries, capable of absorbing macroeconomic variables more easily.”
“At Olivia we aspire to sustain our export-led model a level of specialization and differentiation that makes the dollar cost variable just another variable. Today, companies from different parts of the world come to us looking for us based on a very strong brand promise that guarantees the highest standards of consultancy in cultural transformation combined with a presence in more than 10 countries that allows us to deliver results on large scale,” he noted.
One of the major obstacles the industry has faced in recent years has been the exchange rate gap, which in 2023 it was above 100%, and restrictions on the withdrawal of foreign currency from the country, which have forced many Argentine professionals to work abroad outside the formal circuit to avoid obstacles. Now with the gap is around 20% and the nearest exchange rate unification on the horizon, there are chances that this landscape will change.
For Valeriano Guevara Lynch, Managing Partner of the Allende & Brea firm, “In the technology sector, Argentina has significant growth opportunities. First, because the human factor and technical knowledge of engineers and entrepreneurs in technology companies are very high in comparative terms in Latin America.”
“We are also competitive in terms of costs. Despite Argentina’s recent increase in costs compared to other countries, The Argentine cost in the technology sector remains favorable for attracting investments“said Guevara Lynch.
“In my experience working side by side with companies in this sector, Obstacles to growth are the exchange rate gap, high labor costs and high taxes. The exchange rate gap does not exist in other countries. Labor costs are lower, i.e. social contributions are lower in other neighboring countries. And taxes are lower too. We have to solve this problem and we will have high potential to increase technology businesses,” she emphasized.
In the service sector, software is one of the key segments. In terms of exports, Software accounts for 31.9% of foreign sales of knowledge-based services and 2.7% of total exports.
Industry sources estimate that IT services exports will grow to this year 3,000 million dollars.
Source: Clarin
