BMI acknowledges Chile as Latin America's strongest IT marketPublished: February 11, 2009
The Chilean IT market is one of the most developed in Latin America, according to Business Monitor International. On their "Chile Information Technology Report Q1 2009", BMI highlights the fact that Chile enjoys some of the best telecommunications infrastructure in South America. The World Economic Forum ranked Chile 31st in the world in its most recent survey regarding the "degree of preparation to participate in and benefit from information and communications technology", this is the highest ranking in the Latin America region.
According to the BMI report, Chile's IT market is projected to grow at a compound annual growth rate of 10% over the 2008-2013 period. At the same time, the agency predicts that the economic slowdown should increase US companies' demand for Latin America-based outsourcing solutions.
The total value of Chilean domestic spending on IT products and services should surpass US$ 2.2 billion in 2009 and reach US$ 3.4 billion by 2013. The Chilean government aims to reach a target of US$ 1 billion in IT services exports by 2010.
Despite the global financial crisis, there is plenty of room for organic growth of the PC penetration rate, which now is at 18%. BMI acknowledges Chile as one of the fastest growing PC and laptop markets in Latin America. Projections for Chile's hardware market foresee an 8% growth rate for 2008-2013, and predict that the US$ 1 billion level will be surpassed by 2012. The software market is expected to reach US$ 164 million in 2009, while its projected growth rate for 2008-2013 will be around 11%. Estimated growth for Chile's IT services market in 2008 is 15%, with sales of US$ 828 million.
The competitive Chilean IT market was very appealing to global IT vendors in 2008. Dell pursued an aggressive expansion policy in retail, through new partnerships and expansion of local distribution agreements, while SAP's "Business All-in-One Fast Start" online delivery solution growth was driven by SME's. IBM won a US$ 30 million, five-year contract from Chilean Universidad de Los Andes to provide IT architecture implementation services. The company also extended its contract with telecoms operator Telefónica Chile to operate and provide technical support, back-up and disaster recovery until 2011.
With regards to government IT policies, the BMI report draws particular attention to the fact that the Chilean government, led by Chile's Economic Development Agency, CORFO, invested US$ 11.7 million in 2008 to help establish Chile as an offshoring services location. The National Innovation Council identified the offshore industry as one area with high growth potential for the next decade.
In 2008, the Chilean government launched a major programme to promote IT use among small-to medium-sized enterprises (SMEs). The BMI reports that the programme, supported by the Economy Ministry, was budgeted at US$ 4.8 million; central government will provide US$ 2.9 million and the remainder will come from regional governments. The programme is particularly targeted at SMEs which operate in the food, agriculture and tourism industries. It is designed to help these companies raise their productivity levels and compete in export markets. The government is also allocating US$ 80 million to support projects aimed at boosting internet coverage during 2008-2009. According to BMI estimates, internet penetration reached 35.5% in 2008; by 2013 it is expected to surpass 40%.
A summary of the report can be found at
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