By Alexis Malure, Editor
If you follow international news, you probably know about the landmark peace agreement the Colombian government made with the country’s largest left-wing rebel group, the Revolutionary Armed Forces of Colombia (FARC), in September. The agreement ended a 50-year conflict that has claimed upwards of 220,000 lives, improving society immensely.
What you might not know, though, is life is booming for Colombians in other ways, especially economically through its fast-moving tech sector.
In the shadow of the Colombian conflict, the country’s government also has been waging another type of campaign — one to rebrand Colombia as a global technology leader and to incubate its burgeoning startup scene.
Colombia Bring IT On is one of many recent efforts to promote the growth of the country’s technology sector in the international market by focusing on the export of technology and services. ProColombia, the government agency charged with bolstering trade and investment, and Colombia’s Ministry of Information Technologies and Communications, partnered for the program, which hosts a range of events. Networking events for entrepreneurs as well as demo days, which connect Colombian companies with foreign investors, are helping to promote the startup community. Through these efforts, nearly 1,000 Colombian companies specializing in software and digital content have exported more than US $166 million in services to 60 countries since 2012. Moreover, between 2012 and 2014, Canada was among the top buyers of digital services, along with the U.S., Ecuador, France and Spain.
Meanwhile, other government-sponsored initiatives intend to disrupt the country’s social class structure by providing Internet access and educational opportunities to Colombia’s poorest areas.
“Technology is a great equalizer,” said Michael Puscar, founder and president of GITP Ventures, an early-stage venture capital firm based in Colombia. “Colombia is a country that has traditionally produced wealth from the export sector through petroleum, coal and gold. Therefore, land ownership is passed generation to generation, and wealth is concentrated in the hands of the very few.”
But, he continued, “times have changed, propelled by the technology sector. I’ve been witness to great stories of young Colombians from the poorest of barrios [neighborhoods] who studied technology and uplifted themselves and their families,” Puscar added.
The Colombian government intends to create more of these rags-to-riches stories by supporting technology-driven initiatives. For example, through the Live Digital Plan, the Colombian government aims to lift citizens out of poverty by connecting more than 27 million people to the Internet by 2018. This would equate to connectivity for 63 percent of the population, which has the potential to revitalize the nation’s economy even more.
“There is a very strong correlation between Internet penetration and the reduction of poverty,” Diego Molano Vega, Colombia’s former minister for information and communications technology, told The Washington Post. “When we connect a rural school to [the] Internet or when we connect a small school in the middle of the jungle to [the] Internet, those kids in the middle of nowhere have effectively the same opportunity to access the whole information society — just like any kid in New York, London or Paris.”
In addition to investments in Internet infrastructure, Colombia has also heavily invested in the country’s intellectual capital. Through its Digital Talent initiative, the government has earmarked $19 million for Colombians to obtain Information Technology-related postgraduate degrees for free, according to a ProColombia report. Consequently, the program has helped more than 342,000 students in systems engineering and other IT-related careers graduate in Colombia between 2001 and 2013. This represents 12.9 percent of new professionals.
Colombia’s support for the tech world
The economic result of the country’s investment in tech, a $6.8 billion industry, has taken root, attracting more than 1,800 software development and IT service companies to the Andean nation.
Across the economy, there are many early-stage, fledgling companies that have scalable global potential, such as Publicize, a PR startup founded by former tech journalist Conrad Egusa, and Aflore, a financial services company that makes loans accessible to the Colombian middle class.
“I arrived in Colombia to bootstrap my enterprise, Yuxi Pacific, which was acquired in June 2013,” Puscar said. “I stayed because of the enormous potential and have made 12 investments in the high-tech sector since 2011.”
The sector has been on the upswing ever since Puscar arrived.
“Just four years ago, there were only two early-stage high-tech funds in Colombia,” he said. “As of January 2015, there are now more than 40.”
According to the International Monetary Fund, Colombia’s economy is expected to triple in size from a decade ago. Meanwhile, a World Bank reportfound that the country’s middle class grew by 50 percent over the last decade. Additionally, The Economist positioned Colombia as the region’s fastest-growing big economy in 2014 while the country was experiencing its lowest annual unemployment rate average in the last 14 years.
Favorable domestic policies and economic conditions have spurred more than a dozen fair trade agreements with 50 countries, including the United States and the European Union. Consequently, the international spotlight caught the attention of Silicon Valley behemoths, such as Uber and Airbnb, which view Colombia’s highly connected society and favorable business climate as an untapped market.
Still, officials and venture capitalists are most excited for what native Colombian entrepreneurs have in store.
“While international entrepreneurs and investors are an important part of Colombia’s future success, it is domestic entrepreneurs who will define Colombia’s success story,” Puscar said.