Latin America is a vast region that covers every country below the US southern border, formed by 20 developing economies led by Brazil and Mexico, both with a GDP of over a trillion dollars. Most of these countries share the same language (except Brazil) and have similar traditions tracing back to their history as Spanish colonies. Latin America is one of the most promising developing regions, and its proximity to the US provides a privileged advantage in business given that both regions share time zones.
For decades, economic growth in the region kept a steady pace that depended mainly on traditional industries such as mining and agriculture, becoming well known in developed countries for providing low-cost manufacturing. However, in the last few years, Latin America experienced an exponential technological growth that propelled its software and hardware industries to unimagined levels, becoming the preferred region for venture capitalists (VCs) from all over the world seeking to invest in new local tech companies.
Back in 2017, Latina America had only two unicorns: Mercado Libre and Despegar. Four years later, in 2021, that number jumped to 34. By the end of february 2022, it rose to 42. Brazil leads the board with 21, followed by Argentina (8) and Mexico (7).
According to Crunchbase, in 2021, VC investors poured an estimated US$19.5 billion into Latin American technology startups and late-stage companies, helping some reach unicorn status and enter hyper-growth mode. Experts believe that VCs are becoming better at identifying tech companies tackling very specific but impactful pain points in Central and South American society. VCs are pursuing new opportunities outside of traditional markets, and Latin America is becoming a center of gravity for them, with 2022 aiming to break the previous year’s record.
Latin America experienced an exponential technological growth that propelled its software and hardware industries to unimagined levels
One of the main results from this wave of VC investments is a significant rise in technical talent, specifically in software development. Year over year, the number of software engineers in Latin America grows at a faster rate. Brazil alone produces 227,000 STEM graduates per year, while Mexico provides 130,000 engineers and technicians each year.
According to Stack Overflow, there are over 1 million senior software engineers in the region, with a high number of them having previous experience working remotely for US companies. In parallel, the number of junior and mid-level developers is quickly becoming the main pool of software talent, creating a new era in the nearshore industry.
One of the most impressive aspects of this new tech revolution is the diversity of technologies and specializations we see from these talented engineers. You can find developers on virtually every technology there is. From well-established languages to top-end new tech stacks, you’ll find the person you are looking for.
The software industry allows everyone to participate, no matter their background or location.
The connected world we live in today equalizes access to the newest technologies allowing people to learn from where they are and at their own pace. Software developers are not limited to traditional education; and although computer science programs at top universities are greatly valuable, software developers are also acquiring and growing their coding knowledge through software, developer communities, mentoring, online learning, collaboration and real life projects. The software industry allows everyone to participate, no matter their background or location.
A way to find these developers across the region is by looking at software development agencies. These agencies are constantly hiring and training developers to assign them to remote projects, mainly in the US, but also locally. The agency provides them with office space and equipment, as well as constant training on new technologies; they even offer English courses.
Software development agencies have become tech hubs that allow developers to help each other and share knowledge while helping US clients find great talent quickly and without dealing with overhead expenses. We call software developers that are part of an agency “Agency Developers”, as they separate themselves from freelancers and independent contractors given the factors mentioned above, as well as the commitment and accountability of being part of a company.
These agencies can be located in every Latin American country. They range from small to midsize companies, with 5 to over a 100 developers working in-house as specialists on specific technologies or a wide open tech stack. Most software developer agencies are founded by technical entrepreneurs that chose to start their own businesses and hire more developers as they grew. They are used to handling all the aspects of a project, building a product from scratch or assigning their developers to full-time remote positions to be managed by the client directly.
High-paying jobs generate a huge positive economic impact on the life of these developers, their families and their communities
Some of these agencies have grown to have over 500 developers and are well-positioned as leaders in the nearshore industry. In this particular parameter, Mexico has an advantage over other countries in the region, as business trips are faster and meeting the team in person is less complicated.
Costs are another solid advantage of hiring developers from Latin America. Agency Developers in the reigion work for a salary around 50% lower than an American developer with similar experience. While this might sound like they’re underpaid, such salaires can be double or even triple the average wage in Central and South America. These high-paying jobs generate a huge positive economic impact on the life of these developers, their families and their communities while incentivizing more people in the region to pursue technical careers.
To provide an example of the rates that you can find for Agency Developers, here are some average monthly salaries in Latin America:
- Senior Developer (5+ years of experience): US$6,000-US$8,000 a month, or US$37.5-US$50 USD an hour.
- Mid-level Developer (3+ years of experience): US$4,000-$6,000 a month, or US$25-US$37.5 an hour.
- Junior Developer, Integrations or QA: US$2,500-$4,000 a month, or US$15.6-US$25 an hour.
These ranges also apply for multiple other roles such as UX/UI designers and Scrum Master, according to their level of seniority.
So, what’s the best way to find and connect with these developers and their agencies?
One option is to use Google to do some scouting work across Mexico, Colombia, Argentina or Brazil; reach out to them, schedule calls and compare their offers. Another option is to request feedback and opinions from other companies in the US that have scouted before and could recommend a good agency to work with. Both options are viable and are the most frequently used.