Uruguay and Costa Rica have historically advanced from different starting points with different strategic priorities. Costa Rica’s emergence as a destination for digital talent and investment has been more rapid and visible. On the other hand, Uruguay is engaged in a more deliberate, institution-led development of its own. This is a story of scale vs. depth, where political history, geography, and time zones play a decisive role — all of which shape the evolving digital economies of Uruguay and Costa Rica and are gradually redefining them for the next decade.
Uruguay’s Approach: Patient Digital Sovereignty in Small Scale
In Uruguay, efforts to develop a home-grown digital industry tend to be more gradual and institutional.
- Uruguay develops its digital ecosystem organically and incrementally.
- Public digital identity, eGovernment, telecom, data services, and open data are all areas of strategic focus for the state.
- Leaders see domestic development and economic sovereignty as prerequisites for deeper growth in the knowledge economy. “The data is our oil,” the former Vice President said in a public forum. In theory, this preference for control yields long-term advantages:
- Reduced dependence on outside leadership and decision-making.
- Domestic digital corporations add local content, innovation, and ownership into the value chain. “Uruguay owns its processes completely from soup to nuts,” one senior business leader told me in an interview.
- Room to establish strategic autonomy around technology, data, and education. The state controls the telecom network and data storage; generates its own data sets (census, health, education, tax, business registries) through extensive civil registration; and collects tax revenue with one of the highest digital penetration rates in the region.
In practice, the more robust the oversight, the more slowly the knowledge ecosystem develops — a recurring trade-off shaping the digital economies of Uruguay and Costa Rica and influencing how they evolve at home.
Uruguay’s big bet remains strengthening home-grown startups and attracting corporate development that can accelerate onshore capacity-building. A nascent but promising example is joint investment in higher education and cloud infrastructure between a major regional corporation (Grupo H y H) and a global cloud provider (AWS).
Costa Rica’s Approach: Integrated Operations with Scale
In Costa Rica, digital industry development has been relatively rapid and occurred with the strong participation of outside firms.
- Industrial policy aims at serving the needs of global supply chains through facilities with as few obstacles as possible, high predictability, and cost competitiveness.
- Infrastructure is state-of-the-art, including advanced telecom, cloud, and near-shore energy. Governance is aligned with the needs of global firms, often with a bottom-up prioritization of corporate rather than citizen needs.
This has established Costa Rica as a leading “plug-and-play” destination for digital work. Costa Rica has now closed the gap with India in employment for global call centers and back-office processing, and is better positioned to capture a share of global R&D. However, the heavy dependence on corporate leadership has limits: changing demographics, lower growth, and the movement of talent to less taxing, less expensive, or more innovative ecosystems could strain this business-friendly model. These pressures also highlight structural questions about the future digital economy in Uruguay and Costa Rica — and how they can remain competitive in an increasingly crowded landscape.
Speed and Scale: Convenience Comes at a Cost?
Historically, a premium has been paid for a plug-and-play digital economy in the region. Incentive structures and macroeconomic stability have been more or less successful in attracting large companies to use Costa Rica as a digital hub.
Costa Rica is among the top five technology exporters in the region in both total sales and value added in services and intermediate links, ahead of Colombia and Brazil.
However, the critical question for Costa Rica is whether its primary role as an operational hub can evolve toward greater value creation (technological authorship) and ownership. For Uruguay, the key challenge is maintaining its sovereignty without forgoing the scale that matters for earning its place at the decision-making table in global digital value chains. As AI and next-generation technologies shape new generations of productivity tools, large tech platforms, and connectivity infrastructures, the room to maneuver within a fixed digital specialization may narrow.
Where Do Costa Rica and Uruguay Meet?
Despite their different approaches, several common themes and strategic questions have arisen across conversations in both countries:
- Efforts to grow local digital capacity continue to be hampered by insufficient state investment in education and significant churn in the talent pool. Salaries and professional recognition are often low relative to the region’s primary talent markets (especially the U.S. for Costa Rica, Argentina for Uruguay). A lack of mid-career opportunities for advancing digital talent and burnout after a few years in core tech jobs are key challenges to retention and building critical mass locally.
- Costa Rica benefits from a longer runway to absorb labor force decline, especially in mid-sized corporate talent that is inexpensive to source from other Latin American countries.
- Uruguay’s institutional brand and less transient nature of knowledge work are also potentially competitive advantages in retaining its local talent base. Talent is not just a workforce issue — it is a matter of technological authorship, creativity, and innovation. Institutions and strategies of economic statecraft — both public and private — remain the competitive differentiators for retaining or building access to digital value creation.
Scaling the digital value chain in the Southern Cone is an ecosystem-building game — that is, establishing the right foundations to benefit from predictable processes and institutional support from government agencies, telecom and data providers, capital, and a predictable social environment. These factors matter more than business incentives in the short term. In the long term, they are also key to the extent to which domestic innovation can emerge in these ecosystems, enabling both more complex operations and exports of digital services with higher levels of national ownership.
Emerging Technologies as a New Generation of Development Strategy
AI, hybrid cloud, and connectivity are the next frontier in technological specialization in Southern Cone economies. While strategies will vary, all countries in the region are seeking to develop a position that gives them room for maneuver as larger economies and actors shape the next generation of digital productivity and technology platforms:
- Brazil, Argentina, and Mexico have the most potential to play a more significant role in setting strategic standards for these sectors globally.
- Uruguay’s emphasis on data, digital identity, and eGovernment could allow it to punch above its weight, especially with a mix of public and private champions in the regional market.
- Costa Rica’s agility, responsiveness, and corporate experience are the competitive factors that could allow it to integrate itself more deeply into emerging technology platforms — if strategic autonomy can also be carved out at the company and ecosystem levels.
New technologies hold the key to structural change in the digital economy in Uruguay and Costa Rica. Skills are at the heart of strategies in both countries, whether in business development, eGovernment, telecom, innovation, or tax revenue generation — reinforcing how central the digital economy in Uruguay and Costa Rica has become to their long-term development visions.
Do Costa Rica and Uruguay have the Willingness and Capacity to Work More Closely Together?
Costa Rica and Uruguay are natural regional peers in seeking to position themselves in global digital value chains. However, direct competition for investment and talent acquisition, weak regional ecosystems, and a reliance on U.S. markets and cloud infrastructure have precluded deeper collaboration to date.
Digital ID, connectivity, cloud services, data generation, and education each present an opportunity to do things together at a regional level, leveraging scale and learning from differences.
Collaboration on new technologies and more complex digital exports can be a two-way street, with advantages in different areas for each country. Strengthening these partnerships could accelerate the digital economy in Uruguay and Costa Rica in ways neither country could easily accomplish alone.
For Uruguay, areas of possible partnership include telecom (Uruguay is developing an ambitious plan to manufacture equipment using OSM, which Costa Rica can also participate in), cloud sovereignty, cybersecurity, startups, and foreign direct investment. Costa Rica could support regional priorities in data sovereignty, cybersecurity, and education, as well as in attracting international trade and investment to scale digital capacity. Costa Rica has many of the elements needed to be a technology hub for Costa Rican-based and Uruguay-based enterprises. At the same time, in other areas, the country has proven that it can do things on its own: eGovernment, content creation, data generation for enterprises, state-funded broadband, free education, and telehealth. There is still much to be learned, and areas in which both countries can expand their cooperation for mutual benefit — especially as the digital economy in Uruguay and Costa Rica becomes even more interconnected.