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The Leading Country in Latin American Software Development: Exceeds US$ 1 Billion in Exports, Representing 4.3% of GDP

by | Jul 7, 2024

Uruguay has become one of the leading software exporters in the region, with 85% of its exports going to the United States.

Information technologies (IT) are crucial to a country’s economy and influence multiple aspects of economic and social development.

This nation has become one of the leading software exporters in Latin America. Despite being a small country with a population of approximately 3.5 million, it has developed a robust and dynamic technology sector. As a result, GDP has increased exponentially, and it is one of the few countries in the region with significant software exports to the United States.

What is the leading small country in Latin America regarding Latin American software development exports?

Uruguay is a small country in Latin America with 3.5 million inhabitants that experiences faster growth than the average economy. Its share in the Gross Domestic Product (GDP) doubles every decade. These data come from an impact study by the consulting firm CPA Ferrere for the Uruguayan Chamber of Information Technologies (Cuti).

Uruguayan software companies, such as GeneXus and dLocal, have gained international recognition. The country stands out for its high level of Internet connectivity and advanced digital infrastructure. This transformation has positioned Uruguay as a technological hub in the region, attracting investments and talent in the information technology sector.

The report concludes that this sector generates more than 22,000 direct and “quality” jobs.

How has this development influenced Uruguay?

The technology sector has become a “crucial component” of the Uruguayan economy, representing 4.3% of GDP and consolidating itself as one of the five main export sectors. In 2022, exports reached 1.8 billion dollars, equivalent to 65% of the country’s total turnover of 2.8 billion dollars. This value has multiplied by a factor of 13 since 2000. In 2010, sales abroad were 225 million dollars. 85% of exports were destined for the United States.

The business model in Uruguay’s information technology (IT) sector mainly focuses on companies dedicated to developing and maintaining systems, known as “software factories,” representing 70% of the sector’s activity and 80% of exports. The industry has more than 500 companies offering an average salary of 91,157 Uruguayan pesos (approximately 2,300 US dollars), according to data published by the newspaper El País.

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This remuneration is more than double the average salary in Uruguay, just over 1,000 US dollars (41,805 Uruguayan pesos). It exceeds other activities with comparatively high salaries, such as financial and insurance activities (about 2,000 dollars), professional and scientific activities (approximately $1,700), transportation and storage (roughly $1,200), and teaching (approximately $1,100).

Although this industry still has tremendous growth potential, it has already established itself as one of the most relevant sectors of the Uruguayan economy. In 2022, it was ranked fifth in the export ranking, behind the meat sector, the forestry industry, soybeans, and tourism, with a share of 9.3%.

Who are some of the major players in the Uruguayan software industry?

Uruguay’s software industry is home to several prominent players that have gained international recognition. Among them, GeneXus stands out for its innovative software development platform that allows for the rapid creation of applications. Another key player is TATA Consultancy Services, which operates a major delivery center in Uruguay, serving clients around the globe. Meanwhile, the company Bantotal has become a leader in banking software, providing core solutions to financial institutions across Latin America. Mercado Libre, although primarily known for e-commerce, has a significant software development presence in Uruguay, contributing to the country’s robust tech ecosystem. These companies, among others, highlight Uruguay’s software industry’s dynamic and growing nature.

Uruguay’s ascension as a leading software exporter in Latin American Software Development highlights the country’s strategic investments in technology and innovation. With significant contributions from companies like GeneXus, dLocal, and Bantotal, Uruguay has cultivated a vibrant tech ecosystem that supports substantial economic growth and provides high-quality employment opportunities. The sector’s impressive export figures, particularly to the United States, underscore its global competitiveness and pivotal role in the national economy. As Uruguay continues to enhance its digital infrastructure and foster a conducive environment for tech enterprises, its software industry is poised to remain a critical driver of economic development and an exemple for other nations in the region. Latin American Software Development plays a pivotal role in driving economic growth, and Uruguay’s success serves as a model for other countries aiming to strengthen their position in this sector. The country’s commitment to advancing its digital infrastructure and supporting innovative tech companies underscores its leadership in Latin American Software Development.

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