Doing Business in Latin America
Daniel Garcia
Issue date: 3/10/08 Section: Features
As we depart business school and move into the next stage of our "corporate" careers, our training has left us constantly seeking new opportunities. The companies we work for operate on a global scale with multinational commitments driving new areas of growth. And while the "World Economy" class may or may not have sparked your interest or magnified the importance of having a global perspective on business, "Doing Business in Latin America" surely will.
As with any region, Latin America does have its own business challenges. Even though Colombia showed the biggest improvement in the annual "Doing Business" database rankings, no Latin American country exists in the top 20 for ease of doing business. Locally sourced production and a limited supplier base results in strong competitive advantages for Latin American firms. In addition, infrastructure (telecom, roads, etc.) may not be up to par with what multinational firms are used to. And finally, though improving, Latin America still experiences currency fluctuations and economic volatility.1
When we consider the two great emerging markets, Asia and Latin America, most of the press harps on the sheer size of the Asia giants, India and China. However, individuals and companies increasingly recognize that he ease of doing business in Latin America more than compensates for its smaller population. An abundance of non-stop flights, a general understanding of the English language and North American life, and a region free of nuclear weaponry, rearmament, and ethnic/religious tensions that plague so many other parts of the world create an attractive business environment.
Hopefully, I've sparked some interest. You can make it a priority to become a regional specialist in a growing and lucrative Latin American market and differentiate yourself within your respective industries. To do so, however, requires time and commitment; and I believe that there are eight critical items that should be on everyone's checklist who intends to do business in Latin America2:
As with any region, Latin America does have its own business challenges. Even though Colombia showed the biggest improvement in the annual "Doing Business" database rankings, no Latin American country exists in the top 20 for ease of doing business. Locally sourced production and a limited supplier base results in strong competitive advantages for Latin American firms. In addition, infrastructure (telecom, roads, etc.) may not be up to par with what multinational firms are used to. And finally, though improving, Latin America still experiences currency fluctuations and economic volatility.1
When we consider the two great emerging markets, Asia and Latin America, most of the press harps on the sheer size of the Asia giants, India and China. However, individuals and companies increasingly recognize that he ease of doing business in Latin America more than compensates for its smaller population. An abundance of non-stop flights, a general understanding of the English language and North American life, and a region free of nuclear weaponry, rearmament, and ethnic/religious tensions that plague so many other parts of the world create an attractive business environment.
Hopefully, I've sparked some interest. You can make it a priority to become a regional specialist in a growing and lucrative Latin American market and differentiate yourself within your respective industries. To do so, however, requires time and commitment; and I believe that there are eight critical items that should be on everyone's checklist who intends to do business in Latin America2:
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