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Fintech in Uruguay is an emerging sector with an annual growth rate of 44%

Fintech in Uruguay is an emerging sector with an annual growth rate of 44%

Fintech is gaining relevance worldwide, and Uruguay is consolidating itself as an emerging sector market. According to a joint report by the Inter-American Development Bank (IDB) and Finnovista, Fintech in Uruguay has experienced an average annual growth of 44% between 2017 and 2023.

The survey highlighted the implementation of innovation hubs. It noted that the fintech ecosystem is developing with “remarkable dynamism” in the country, as well as in Peru, Ecuador, the Dominican Republic, Costa Rica, and Guatemala. The joint report specified that the countries went from representing just 7% of the regional total in 2017, with 48 ventures, to adding almost 15% with the 455 surveyed in 2023.

This improvement is associated with the regional situation since technological finance startups grew more than 340% in the last six years, going from 703 to 3,069 throughout the region during that period under examination.

As for the big players in the region, Brazil continues to have the most significant number of fintechs, with 24% of the total, followed closely by Mexico (20%) and Colombia (13%). Argentina and Chile are further behind(both with 10%), while fintech in Uruguay represents 1.69%.

What segments do fintechs target?

The report investigated the segments that lead the number of platforms in the region, and once again, at the top of the list are payments and remittances, with 21% of the total companies, among which is the Uruguayan fintech unicorn dLocal.

Loans, with 19%, and business finance management, with 13%, complete the fintech offerings. The three items have experienced average annual increases of 24%, 31%, and 28%, respectively.

As for the public, more and more regional ventures focus on underbanked or unbanked people and companies, the IDB and Finnovista observed, highlighting that this “shows the positive impact of this sector on financial inclusion.”

Currently, 57% of fintech companies target this population group; in 2021, that percentage was 36%. Specifically, the loan segment leads in serving unbanked people, while payments and remittances represent the segment that most serve underbanked small and medium-sized businesses.

Technology and financial inclusion

Anderson Caputo, head of the IDB’s connectivity, markets, and finance division, said the report designs public policies and “reaffirms the enormous potential of financial technology to close financial inclusion gaps in the region.”

Meanwhile, Fermín Bueno, co-founder and Managing Partner at Finnovista considers fintech as “a key driver for innovation and economic growth in the region, but also for financial inclusion and accessibility to financial services for millions of people and small businesses.”

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A promising future

The future of fintech in Uruguay and Latin America appears promising, driven by a convergence of factors fostering innovation, financial inclusion, and economic growth. With its robust digital infrastructure and favorable regulatory environment, Uruguay is emerging as a critical player in the Latin American fintech ecosystem.

In Uruguay, the government’s proactive stance on digital transformation and financial inclusion has created a conducive environment for fintech startups. Initiatives such as the Central Bank of Uruguay’s e-peso pilot program, which explores digital currencies, demonstrate the country’s commitment to embracing fintech advancements. Moreover, Uruguay’s high internet penetration rate and well-educated workforce provide a strong foundation for developing and adopting fintech solutions.

Across Latin America, the fintech sector is experiencing exponential growth. The region is characterized by a large unbanked population and a high reliance on cash transactions, presenting a significant opportunity for fintech companies to provide accessible and affordable financial services. Digital banking, mobile payment solutions, and blockchain technology are gaining traction, driven by the increasing smartphone penetration and a young, tech-savvy population.

Brazil and Mexico lead the charge, with vibrant fintech ecosystems supported by substantial investment and regulatory support. Brazil’s open banking regulations and Mexico’s fintech law are pivotal in fostering innovation and competition. Other countries, such as Argentina, Chile, and Colombia, also witnessed a surge in fintech activities spurred by supportive regulatory frameworks and entrepreneurial dynamism.

The COVID-19 pandemic further accelerated the region’s adoption of digital financial services. Social distancing measures and the need for contactless transactions have highlighted the importance of fintech in ensuring financial continuity and resilience.

Looking ahead, the fintech landscape in Uruguay and Latin America is poised for continued growth. Collaboration between governments, regulatory bodies, and private sector stakeholders will be crucial in addressing cybersecurity, data privacy, and financial literacy challenges. As fintech continues to evolve, it has the potential to transform financial services, promote economic inclusion, and drive sustainable development across the region.

The future of fintech in Uruguay and the broader Latin American region is exceptionally bright, with significant growth driven by innovative technologies, regulatory support, and a strong focus on financial inclusion. The impressive annual growth rate of 44% in Uruguay’s fintech sector underscores the country’s emerging status as a key market within the region. As fintech companies expand their reach and services, targeting underbanked and unbanked populations, the potential for transformative economic impact becomes even more pronounced. By fostering collaboration among governments, regulatory bodies, and private sector stakeholders, fintech in Uruguay and Latin America can achieve its full potential, ensuring sustainable development and enhanced financial accessibility for millions of people and businesses.

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Technology jobs in El Salvador represent 20% of the region’s total

Technology jobs in El Salvador represent 20% of the region’s total

According to the World Bank, technology jobs in El Salvador represent 20% of the region’s total. More than 32,000 Salvadorans work in the technology sector. 

Technology jobs in El Salvador play an increasing role in the national economy

According to the World Bank (WB), El Salvador accounts for 20.8% of the employment in Central America’s information and communications technology (ICT) sector. The report “Digital Trends and Progress Report,” published last March, indicates that in 2022, some 32,000 people were employed in technology jobs in El Salvador out of the more than 154,000 who worked in the Central American region.

According to the World Bank, 13,000 jobs were added in technology manufacturing, including personnel dedicated to working with electronic components, computers, peripheral and communications equipment, and the electronic devices sector. More than 141,000 Central Americans remained in the ICT services sector, working in publishing, audiovisuals and radio broadcasting, telecommunications, data centers and cloud computing, artificial intelligence, and “big data” analysis.

This group also includes information technology (IT) consulting and outsourcing services and operational and application software, including information platforms, search engines, and social networks. The World Bank noted that although the ICT sector does not represent a relatively large portion of workers in Central America, it has maintained an increase in employees in recent years, driven by information technology services. According to the World Bank, more than 68 million people will work in ICT companies by 2022, exceeding the 37 million reported in 2000.

“The contribution of the ICT sector to the share of global employment grew modestly from 1.3% in 2000 to 2% in 2022, with the majority of new jobs added in IT,” the document highlighted.

ICT in the Central America region

El Salvador is the third country in Central America where the highest proportion of employment was concentrated in the ICT sector. It is surpassed by Costa Rica, where more than 50,000 people worked in companies of this type, and Guatemala, which covered some 37,000 and represented 24% of the entire region.

In detail, the ICT services sector added more than 20,000 employees in Honduras, 13% of the total in Central America, while ICT employed 15,000 people in Panama, 9.7%. Belize and Nicaragua were the only countries in the region that did not report employment in the ICT sector. Furthermore, Guatemala and Honduras did not have collaborators in the technology manufacturing sectors.

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Employment in the Salvadoran market

Although hundreds of Salvadorans work in the ICT sector, the commerce and restaurant sector drives more than a third of formal employment in El Salvador. In February, the Ministry of Labor and Social Welfare (MTPS) reported that El Salvador exceeded one million workers in 2023. Of this number, 32% worked in the commerce, restaurants, and hotels sector and in transportation, storage, and food services.

The manufacturing industry came second, while 21% worked in professional, scientific, technical, and administrative services. For their part, 9% worked in the services sector and 4% in financial activities and insurance. Technology jobs in El Salvador continue to play a significant role in the country’s employment landscape.

The growth of technology jobs in El Salvador signifies a pivotal shift in the country’s economic landscape, aligning it with global digital trends. The data reveals that El Salvador holds a substantial share of the region’s ICT employment, underscoring its strategic importance in Central America’s technological advancement. The 32,000 individuals employed in technology jobs in El Salvador represent not just numbers but a skilled workforce driving innovation and economic growth. This sector’s expansion is bolstered by the increasing demand for ICT services, including IT consulting, outsourcing, and software development, which collectively enhance the country’s competitive edge.

The potential for growth in technology jobs in El Salvador is immense

Moreover, diversification within the technology sector, encompassing areas such as technology manufacturing and ICT services, provides Salvadorans with a broad spectrum of opportunities. The addition of 13,000 jobs in technology manufacturing highlights the sector’s capacity to absorb various skills, from engineering to technical support, further solidifying the importance of technology jobs in El Salvador. This diversification is crucial for fostering a resilient economy adapting to global market fluctuations and technological advancements.

The steady increase in ICT employment, as highlighted by the World Bank, is a testament to the sector’s robust growth and potential for future expansion. With more than 68 million people globally working in ICT by 2022, El Salvador’s participation in this sector is a significant player in the international arena. The ongoing rise of technology jobs in El Salvador creates immediate employment opportunities and lays the foundation for long-term economic stability and prosperity.

As El Salvador continues to develop its ICT infrastructure and invest in digital education, the potential for growth in technology jobs in El Salvador is immense. This sector’s evolution promises to elevate the country’s status as a technological hub in Central America, attracting investments, fostering innovation, and ultimately improving the quality of life for its citizens. The future of technology jobs in El Salvador is bright, and their impact on the nation’s economy and society will be profound and enduring.

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Foreign investment in Argentina and the role of some key sectors

Foreign investment in Argentina and the role of some key sectors

The UN trade division analyzed the dynamics of foreign direct investment during 2023. An examination of foreign investment in Argentina was included among the countries that, despite the global decline, saw an increase in capital inflows.

According to the Global Investment Report prepared by the UN, foreign direct investment in Argentina was US$23 billion in 2023. Argentina was thus among the countries that saw an increase in asset arrivals compared to the previous year when it was the destination of US $15 billion in investments. In addition, it was among the top 20 global recipients, with an average contraction of investments in the world and Latin America.

Growing demand for critical minerals, including lithium, rare earth or cobalt, and raw materials partly explains this increased foreign investment in Argentina.

Investments in the region: the weight of extractive industries

In 2023, Latin America and the Caribbean attracted 19 mega projects valued at more than US$ 1 billion each, 17 of which were led by investors outside the region, particularly from the United States, Spain, the Netherlands, and Luxembourg.

According to the report, large projects in Chile and Brazil boosted the region’s values, which channeled the increase in global demand for raw materials and minerals essential for the energy transition. The primary sector, strongly extractive, represented 23% of the value of new regional projects in the last two years.

The particularity of these industries is that they are subject to changes in commodity prices.

However, investments in renewable energies stood out: Four of the ten projects with the highest investment amounts were in this segment, particularly in green hydrogen and green ammonia.

When observing the evolution in the different sectors in the region, there were registered declines in areas such as infrastructure (-30%) and public services (-23%), as well as in renewable energies (-40%), followed by information technologies and chemical products. In the opposite direction, the increases were seen in the base metals and metal products industry.

The place of foreign investment in Argentina

Although foreign direct investments had a cut of 2% in South America and totaled 143 billion dollars, the acceleration of foreign investment inflows to Argentina, along with Chile and Guyana, compensated for the lower values registered in Brazil and Peru. Despite the decline, Brazil remained the most significant attractor of investments.

Argentina was ranked fifth as a destination for the highest-valued projects, which are estimated to exceed one billion dollars and are vectors of international financing, particularly in extractive sectors.

In a scenario of contraction of foreign investments globally, those made by multinationals from emerging countries chose to expand towards the financing of new projects over the purchase of assets. It is in that sense, and crossed with critical minerals, that Argentina was included in the investments of the Chinese Zijn Mining Group in mines and Kazakhstan.

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Disputes between investors and states

During 2023, UNCTAD reported 60 new investor-state dispute resolution processes, also known as arbitration processes.

The new cases in 2023 were initiated against 37 countries, 70% of which were against developing countries. Mexico alone had ten new cases. They were followed in the ranking by Honduras, with 5, Argentina, and Venezuela, with 3 each. Latin America and the Caribbean represented 50% of the claims. Most of the claims originated from actors from the United States, the United Kingdom, and Switzerland.

2023 was a good year for foreign investment in Argentina

In 2023, foreign investment in Argentina showcased a significant surge, positioning the country among the top global recipients of capital inflows. This notable increase, from US$15 billion in the previous year to US$23 billion, highlights Argentina’s growing attractiveness to international investors. A significant driver of this growth is the heightened demand for critical minerals such as lithium, rare earths, and cobalt, essential for the global energy transition. The extractive industries, prominently represented in Argentina’s investment portfolio, align with the broader regional trend in Latin America and the Caribbean, where extractive projects dominated the scene, particularly in countries like Chile and Brazil.

Despite a global contraction in foreign direct investment, Argentina’s robust performance, alongside Chile and Guyana, helped offset declines in Brazil and Peru. This resilience underscores Argentina’s strategic importance in the global investment landscape, particularly in sectors like mining and energy. The presence of large-scale projects exceeding one billion dollars further cements its position as a critical destination for international financing. The focus on new project financing over asset acquisition by multinationals from emerging economies, including significant investments from China’s Zijin Mining Group, highlights Argentina’s pivotal role in the critical minerals sector.

However, the investment landscape is challenging. Investor-state disputes remain contentious, with Argentina being one of the countries involved in arbitration processes in 2023. Such disputes underscore the complexities and risks associated with foreign investment in Argentina and other developing nations. Nevertheless, the country’s ability to attract substantial foreign direct investment amidst a global downturn reflects its potential and strategic significance. As global demand for essential raw materials continues to rise, Argentina’s position as a key player in the extractive and renewable energy sectors will likely strengthen, paving the way for sustained foreign investment in the coming years.

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Foreign Investment in Queretaro Sets the Pace in Mexico

Foreign Investment in Queretaro Sets the Pace in Mexico

Foreign Investment Propels Queretaro to the Top

Queretaro has been buzzing with foreign investment activity, with 28 projects worth over 6.3 billion dollars completed between January and May this year. The Ministry of Economy reports that this rapid pace of investment has positioned Querétaro as the entity with the highest rate of foreign direct investment in Mexico.

Querétaro, a state with immense potential, has concentrated 16% of the 39.2 billion dollars announced as investments in Mexico between January and May. This places Querétaro above entities such as the State of Mexico, Nuevo León, Coahuila, and Sinaloa, showcasing its significant role in Mexico’s overall foreign investment landscape.

In this regard, the Secretary of Sustainable Development, Marco Del Prete, communicated that Querétaro remains a national leader in investment projects completed this year. He also highlighted that these investments would create 7 thousand direct jobs in the medium term.

“According to the Ministry of Economy, more than 6 billion dollars have been announced for the State of Querétaro. As of last week, we were the first place in foreign direct investment announcements, more than 6 billion dollars. That is good news; many of them will be materializing and have already started, but it is good news that in investment announcements, Querétaro is occupying the first place,” he said.

Key Investments in Queretaro: Microsoft’s New Data Center and Amazon’s Upcoming Installation Notable Investments from Tech Giants in Queretaro

“Recently, I had the opportunity to speak with Amazon executives; we continue working with them; the project is progressing according to schedule, and we estimate to be able to lift the switch of this Amazon Web Services data region for next year,” he said.

According to the Ministry of Economy, 127 investment projects were announced nationwide in the year’s first five months. Of these, 56% correspond to manufacturing companies, 13% to transportation, 13% to commerce, 13% to mass media, and 3% to energy.

A Thriving Hub for Diverse Industries

Queretaro, a prominent state in central Mexico, plays a crucial role in the nation’s economy due to its strategic location, robust industrial base, and dynamic economic policies. In recent years, foreign investment in Queretaro has emerged as one of Mexico’s fastest-growing economic drivers, fueled primarily by its diverse industrial sectors and significant foreign investment presence.

The state’s economy is characterized by a balanced mix of manufacturing, aerospace, automotive, and agriculture industries. Manufacturing is a cornerstone, contributing significantly to the state’s GDP. Queretaro hosts major automotive production facilities, with companies like General Motors and Bombardier operating substantial manufacturing plants, reflecting the state’s pivotal role in Mexico’s automotive sector.

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Aerospace is another critical industry, bolstered by Queretaro’s Aerospace Park, which has attracted global giants such as Airbus, Safran, and Bombardier Aerospace. These companies leverage Queretaro’s strategic location and skilled workforce, making it a hub for aerospace manufacturing and engineering in Latin America.

Queretaro’s agricultural sector also remains vital, producing various crops, including maize, beans, and vegetables. The state’s agricultural output supports local consumption and contributes to Mexico’s food supply chain.

Foreign direct investment, particularly from the United States, Canada, and several European nations, has been instrumental in Queretaro’s economic growth. This investment has expanded industrial capabilities and fostered technological advancements and job creation within the state.

Investing in the Future: Education and Workforce Development

The Mexican state of Queretaro boasts a highly skilled and adaptable workforce supported by robust educational infrastructure. Its workforce is renowned for its technical proficiency and expertise across various industries, including manufacturing, aerospace, automotive, and technology. Queretaro’s educational system plays a pivotal role in nurturing this talent pool, with institutions such as the Autonomous University of Queretaro (UAQ) and the Technological Institute of Queretaro (ITQ) offering specialized programs in engineering, IT, aerospace sciences, and business management. These educational institutions collaborate closely with industry leaders and government agencies to tailor curricula that meet the evolving demands of the job market.

Furthermore, Queretaro benefits from initiatives like dual education programs, which integrate classroom learning with practical work experience, ensuring graduates are well-prepared for the demands of modern industries. The state government and private sector actively support vocational training and certification programs, enhancing the employability and competitiveness of the local workforce.

Queretaro’s workforce is technically proficient, culturally diverse, and multilingual, reflecting its attractiveness to multinational corporations seeking talent with global perspectives. The state’s strategic location and skilled labor force continue to attract foreign investment and foster innovation. However, Queretaro’s unwavering commitment to advancing its educational infrastructure and workforce development initiatives truly sets it apart. This commitment ensures that the state sustains its leadership in critical sectors and drives future prosperity, even as industries evolve and new technologies emerge.

Foreign investment in Queretaro: A Beacon of Opportunity in Mexico

The state’s economic ascent, fueled by robust foreign investment in Queretaro, underscores its pivotal role in Mexico’s economic landscape. With over 6.3 billion dollars in investments announced by mid-2024 and a national leadership position in foreign investment rates, Queretaro exemplifies dynamic growth and resilience. The state’s strategic focus on diverse industries such as manufacturing, aerospace, automotive, and agriculture solidifies its economic foundation and promises sustained development and job creation. As global giants like Microsoft and Amazon expand their operations in Queretaro, leveraging its skilled workforce and strategic location, the state is poised to continue attracting significant foreign investment in Mexico. Moving forward, Queretaro’s proactive economic policies and thriving industrial ecosystem are set to enhance further its stature as a cornerstone of Mexico’s economic vitality and a beacon of opportunity in the region.

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The pharmaceutical industry in Colombia: an engine of innovation and development

The pharmaceutical industry in Colombia: an engine of innovation and development

Foreign Investment Propels Queretaro to the Top

Queretaro has been buzzing with foreign investment activity, with 28 projects worth over 6.3 billion dollars completed between January and May this year. The Ministry of Economy reports that this rapid pace of investment has positioned Querétaro as the entity with the highest rate of foreign direct investment in Mexico.

Querétaro, a state with immense potential, has concentrated 16% of the 39.2 billion dollars announced as investments in Mexico between January and May. This places Querétaro above entities such as the State of Mexico, Nuevo León, Coahuila, and Sinaloa, showcasing its significant role in Mexico’s overall foreign investment landscape.

In this regard, the Secretary of Sustainable Development, Marco Del Prete, communicated that Querétaro remains a national leader in investment projects completed this year. He also highlighted that these investments would create 7 thousand direct jobs in the medium term.

“According to the Ministry of Economy, more than 6 billion dollars have been announced for the State of Querétaro. As of last week, we were the first place in foreign direct investment announcements, more than 6 billion dollars. That is good news; many of them will be materializing and have already started, but it is good news that in investment announcements, Querétaro is occupying the first place,” he said.

Critical Investments in Queretaro: Microsoft’s New Data Center and Amazon’s Upcoming Installation Notable Investments from Tech Giants in Queretaro

“Recently, I had the opportunity to speak with Amazon executives; we continue working with them; the project is progressing according to schedule, and we estimate to be able to lift the switch of this Amazon Web Services data region for next year,” he said.

According to the Ministry of Economy, 127 investment projects were announced nationwide in the year’s first five months. Of these, 56% correspond to manufacturing companies, 13% to transportation, 13% to commerce, 13% to mass media, and 3% to energy.

A Thriving Hub for Diverse Industries

Queretaro, a prominent state in central Mexico, plays a crucial role in the nation’s economy due to its strategic location, robust industrial base, and dynamic economic policies. In recent years, foreign investment in Queretaro has emerged as one of Mexico’s fastest-growing economic drivers, fueled primarily by its diverse industrial sectors and significant foreign investment presence.

The state’s economy is characterized by a balanced mix of manufacturing, aerospace, automotive, and agriculture industries. Manufacturing is a cornerstone, contributing significantly to the state’s GDP. Queretaro hosts major automotive production facilities, with companies like General Motors and Bombardier operating substantial manufacturing plants, reflecting the state’s pivotal role in Mexico’s automotive sector.

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Global Trends and Local Contrasts

“This contrasts with the global trend, where it is observed that the majority of patent applications are related to the field of computer, electronic, electrical, and computational technology. This is also because the main interested parties in obtaining patents in these technological fields are companies from China, Japan, and Korea,” Patiño said. Indeed, the World Intellectual Property Organization (WIPO) revealed that between 2011 and 2021, patent applications from the international pharmaceutical sector registered an annual growth of 3.2 percent, ranking 29th out of the 35 technology fields analyzed by the global intellectual property body.

Leadership in Patents

Juan Pablo Concha, Intellectual Property partner at Baker McKenzie, highlights the pharmaceutical industry’s leadership in using patents in Colombia as a “legal tool par excellence” when promoting research and development of new products and medicines. Likewise, he added that this fact becomes more relevant in a country with no deep-rooted culture in this field. “It denotes the importance of this industry and, simultaneously, the effectiveness of the industrial property system for inventors and consumers in general. Colombia is a country that has unmatched human talent, and being able to enhance that talent by promoting research and development is the ultimate goal that industrial property should pursue,” he assured.

Challenges and Uncertainty

Despite the above, the pharmaceutical industry in Colombia has “an uncertain outlook” due to the recent declaration of the compulsory license of the drug Raltegravir. According to his view, this factor may be detrimental to the promotion of development because it ignores the incentives for developing new medicines. Along the same lines, María Clara Escobar, executive president of the Association of Pharmaceutical Research Laboratories (Afidro), raised the importance of intellectual property and framed it as one of the sector’s short—and medium-term challenges. “Ensuring legal security in the pharmaceutical industry in Colombia requires respect for intellectual property rights, which are key to encouraging innovation. Patents support the investments of effort, time, money, and human resources so that these innovative solutions can be reached that change the course of a disease,” he assured.

The pharmaceutical industry in Colombia holds immense potential as a driver of innovation and development despite the challenges it faces. The significant investments in research and development and the increasing number of patent applications underscore the sector’s growth and its importance in the national economy. Protecting intellectual property rights is crucial to sustaining this momentum, as it incentivizes the creation of new medicines and supports substantial investments. While the recent declaration of a compulsory license for Raltegravir introduces some uncertainty, the overall trajectory of the industry remains promising. By fostering a robust intellectual property framework and leveraging human talent, the pharmaceutical industry in Colombia can continue to thrive and contribute to global advancements in healthcare.

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