California’s Silicon Valley has long been the epicenter of global technological innovation, drawing much of the world’s top tech talent and giving rise to many of the titans of the Internet age. Yet in recent years, tech hubs have been springing up around the world that are challenging the status quo, in turn keeping hold of some of the best national talent and nurturing innovation often intended to benefit local populations. Among them, a number of new “Silicon Valleys” have been declared around Latin America.
While it will be a long time before any of these tech hubs could hope to come close to the scale of the original – which is estimated to contribute $275 billion to the US economy annually – these epicenters of innovation offer hope for the future development of the region, with local governments increasingly throwing support behind tech and innovation.
Perhaps unsurprisingly, the biggest tech clusters have emerged in some of the largest economies of the region, as governments have been able to call on greater resources to establish the necessary infrastructure, while already highly developed education systems have been able to pivot to adopt more tech-based educational options.
Below, some of those hubs from the region – each of which has been declared a new “Silicon Valley” — are highlighted, with tech epicenters in Argentina, Brazil, Chile, Colombia, and Mexico included.
Argentina’s second-largest city has long been considered the nerve center of tech innovation in the country, with the Cordoba Technology Cluster established as far back as 2001. That has been reinforced by the support and promotion from local and national governments, as well as a regulatory regime that allows entrepreneurs to go through company formation in just 48 hours.
Cordoba’s reputation as a major regional tech hub was bolstered in 2016 when the Founder Institute – a major startup launcher based in the real Silicon Valley – announced the establishment of a new startup program based in the Argentinian city, which sits 700 km north-east of national capital Buenos Aires.
Today the Cluster boasts more than 230 associated companies, and takes a highly proactive approach to promoting collaboration and finding ways for members to add value to their operations based on building relationships with other associates.
Meanhwile, the Founder Institute actively participates in driving the Cordoba startup scene, with a mentor program seeing around 50 mentors – largely C-suite executives or professionals of equivalent status – visit the region each year to offer in-depth coaching to early-stage entrepreneurs.
Salvador de Bahía is not Brazil’s biggest tech hub – that title belongs to the country’s sprawling metropolis São Paulo, while the likes of Belo Horizonte and Recife also boast highly developed technology sectors. However, the rise of the tech sector in Salvador has seen it declared Brazil’s “black Silicon Valley”, with that name a reference to the fact that the region is characterized by its predominantly Afro-Brazilian population, as well as the work being done to specifically promote Afro-Brazilian entrepreneurs and thought leaders.
While Salvador is perhaps not as famous as other cities in Brazil, it is well-known among Brazilians as one of the country’s most significant cultural centers, and is becoming increasingly known as a hub of innovation.
The Vale do Dendê accelerator is a driving force in Salvador’s tech revolution, working with local authorities and entrepreneurs to incubate tech-based startups, and nurture local talent. With backing from Google for Startups, and a Black Founders Fund that has already successfully boosted a number of Afro-Brazilian entrepreneurs on their journeys to success, the incubator promises to continue driving innovation in the region.
In 2021, twelve new startups were announced to have been accepted into its Technology Acceleration Program – an intensive three-month training and consultancy program that will see each firm be assessed as a potential beneficiary of the Black Founders Fund, including access to a funding pot of 5 million reis (around $880,000).
While it perhaps seems a little excessive for an entire country to be declared a new Silicon Valley, Chile has achieved just that by earning the moniker “Chilecon Valley” thanks to the rise of tech hubs in neighboring cities Viña del Mar and Valparaiso, but most importantly in capital city Santiago.
One of the flagships of Santiago’s tech scene is Startup Chile, which refers to itself as “the leading accelerator in Latin America”. There is no doubt that Startup Chile has made an impressive contribution to innovation in the country since being founded by the Chilean Government in 2010, boasting a portfolio of close to 2,000 enterprises with a valuation of $2.1 billion. As the organization proudly states, today Startup Chile is considered among the top 10 startup accelerators globally, with its success inspiring dozens more countries to follow suit with similar initiatives for bootstrapping local entrepreneurs.
Meanwhile, Concepción’s “Biobío Scientific and Technological Park” promises to convert that city into a reference point for innovation. The 91-hectare plot, based on the campus of the University of Concepción, and receiving significant backing from the Biobío regional government, will host companies dedicated to sustainability and scientific developments, with the stated aim to “improve the quality of life in Chile and the whole world.”
For a number of years now, Medellín has been heralded in the international community for its transformation from the drug violence-racked homicide capital of the world in the early-1990s to a city of innovation replete with pioneering infrastructure designed to promote social inclusion.
Today, Colombia’s second-most populous city is widely touted to emerges as the Silicon Valley of South America, thanks in part to a dynamic startup scene that is being driven by the Ruta N incubator, based near the public University of Antioquia.
Ruta N has succeeded in linking up local entrepreneurs with international capital, with investors from dozens of foreign countries investing since the incubator was founded by the local government in 2009.
The fact that Medellin has managed to earn such a reputation is all the more impressive given the significant innovation witnessed in capital city Bogotá, where Rappi – one of Latin America’s most heralded tech firms, and Colombia’s first $1 billion-valued “unicorn” – is based.
The success of both cities, as well as increasing support for tech firms in cities such as Barranquilla and Cali, bodes well for the future of innovation in Colombia.
It would be impossible to discuss Latin America’s new “Silicon Valleys” without mention of Mexico’s impressive tech-hub Guadalajara. The home of mariachi music and tequila has emerged as a bustling epicenter of innovation in Latin America’s second-largest economy, and today is home to more than 600 tech companies ranging from budding startups to established major players.
Over the past 15 years, the city’s tech sector has drawn more than $4.5 billion in investment and created 100,000 jobs — with 77% of the total $1.22 billion entering the city in 2014 directed at the tech sector. Before the pandemic, the city expected to create another 6,000 jobs per year — a potential that will likely be realized once the global health crisis subsides, given the importance the tech sector should play in bolstering post-pandemic economic recovery.
With almost 80,000 IT professionals and 100,000 higher education students living Guadalajara during normal times, the city boasts a large pool of talent for companies to draw from that bodes for a highly productive and competitive future. In that context, it is little wonder that Guadalajara is considered Mexico’s Silicon Valley.
While Latin America has a long way to go to overcome some serious ongoing social challenges, it has shown great progress in recent decades. With governments increasingly waking up to the role tech can play in future development, and with some of the region’s new “Silicon Valleys” already making a mark on the global stage, the future of startups and innovation in the region looks bright.
*Andrea Piccinelli contributed to this report