In recent years, with the acceleration and mass adoption of internet access, and availability of smart mobile devices by the global population, we have witnessed a gigantic wave of advances in the provision of technology-based services, innovation development, emergence of new needs and ventures that, little by little, are shaping new ways of doing business for new generations.
These new business modalities and markets are no longer exclusive to places like Silicon Valley – and not even to the world’s great economic powers. The development of these ventures has a great niche throughout the world, and Latin American countries are no exception.
Cities such as Mexico City and Medellín are very important technological hubs for the local and international market of this type of business. Additionally, fast-developing countries like Ecuador that are catching up to the region’s top performers project positive growth in technology development and entrepreneurship in the coming years.
Business-driven country lures investors and innovation
At a glance, Ecuador’s 0.6% GDP growth rate doesn’t necessarily steal the spotlight in the same sense that booming neighbouring markets do. However, the country boasts one of the most consistent, steady growth rates in the continent. Successive governments have taken forward-thinking steps to draw in foreign investment. In combination with supporting a dominating oil export scene, these actions have driven positive GDP statistics since 2000.
Ecuador continues to invest in its people, infrastructure and facilities to capture foreign investors, such as free trade zones. Improved national security levels have also boosted the country’s reputation and market viability with commercial actors abroad.
Technological ecosystem in Ecuador
According to recent studies, the ecosystem of technological entrepreneurship in Ecuador has increased substantially. Growth statistics in mid-2019 indicate around 159 technological ventures or national startups have surfaced across Ecuador.
The significance of this number grows when one considers that more 5 years ago, the vast majority of these companies neither existed, or were even in demand.
Ecuador’s technological landscape consists of ventures or startups that can be divided into the following categories, according to the service they are focused on: fintech, healthtech, legaltech, agritech, edtech, tourism, e-commerce, human resources, business solutions, logistics, real estate, collaborative economics, among others.
A field for local and international players
Although Ecuador’s technological innovation has only sprouted within the last 5 years, that isn’t to say that international actors aren’t already considering opportunities in the market.
Many world-famous technological ventures such as Cabify, Uber, Rappi and Glovo are already consolidating in the Ecuadorian market. Therefore, there is not only an environment conducive to national startup success, but also for international companies too.
The technology entrepreneurship market in Ecuador is still small compared to other countries in the region. This means there’s ample potential for growth and investment support for the aforementioned ventures by local and foreign companies. It also represents an opportunity to explore new projects or businesses from the beginning and play a part in shaping the future of the tech scene in the country.
Support from the government for technological entrepreneurship
Helpfully, the current Minister of Telecommunications and Information Society in Ecuador, Andrés Michelana, has committed to a new incentive project for the digital economy. In the next 3 years, this project seeks to promote and enable new technological advances for Ecuador.
It also implies the adoption of transcendental implementations of public policies. These will be aimed at the joint exploitation of education and technology, and the generation of new jobs in these fields.
In addition, the Foreign Trade Committee (Comex) of Ecuador confirmed a few weeks ago that the government is taking steps to reduce tariffs of at least 15% on stationary and portable computers, and additionally for mobile phones. The drive behind this move is to further generate a more competitive market in the region for technological uptake, education and innovation.
This measure seeks to align with the aforementioned technology adequacy policy and further facilitate a blossoming technological services sector.
Finally, through a joint statement between the Minister of Telecommunications and Information Society in Ecuador and the new Mayor of the capital of Ecuador, Quito, a project was established to place Quito as the first 100% smart city in Ecuador, to the same standards of important technological cities in the world.
Take up tech opportunities in Ecuador
This is an opportune moment in Ecuador’s development for national and foreign investors who want to undertake technological ventures in Latin America, whether existing or new.
Knowing that they have government backing and a largely untapped market is ample incentive to consider an expansion into this foreign investment-friendly country.
The government and its commercial landscape for tech are calling out for innovators in a number of sectors, including health, education, agriculture, urbanism and sustainability. This offers a diverse market for foreign actors.
Additionally, Ecuador’s skilled workforce, strategic position and proximity to both North and South American neighbours, and free trade zones offer further incentives to move businesses across its broders.
Due to the above considerations, if you or your company is dedicated to the provision of technological services, Ecuador can become an attractive destination to expand or strengthen your business.
If you are interested in investing in a technology venture or creating a new one and need assistance to comply with the processes derived from these legal and administrative activities, do not worry. Contact one of our country managers in the different jurisdictions of Latin America at [email protected] and we will see how we can help you and your company in Ecuador and throughout Latin America.