I’m currently in the Dominican Republic to participate in the 8th annual convention of the Latin American Association of Service Exporters (ALES).
Yesterday I took part in the panel discussion, “What sectors and markets offer the best opportunities for the region?”. The theme of the discussion was to explore which sectors in Latin America are likely to see the most growth and have the most potential. We discussed the key strategies that businesses and executives will need to deploy to take advantage of these opportunities.
Data from the International Trade Center, shows that more than half of the global workforce is involved in services, with many emerging countries contributing to the sector’s growth. The moderator of the panel, David Edery, Services Export Manager from Promperú, highlighted how Latin America has become one of the regions with the greatest potential to develop service exports, after Asia. However, the challenge for the region is that for too long, it has exported primary products (think of Peru’s mining industry as an example), rather than services. We need to prioritize services in industries from insurance and finance, to software and business consulting.
I believe the crucial dynamic which will see us increase service exports from the region, will be improving the skills amongst our workforce. From governments and the public sector, through to private organizations, we need to recognize that the only way to compete at a global level is improving educational opportunities for people. Particularly in the hi-tech sector, organizations constantly require different skill sets, or people who understand the latest technologies. A recent report by the consultants at Bain for example, found that 73% of employers report a skills shortage in their industry. So we know companies in countries such as the USA can’t find the skills they are looking for – this opens the door for organizations throughout the Americas to export services. I spoke during the discussion about the potential presented by “digital transformation”- that in many ways has become a buzzword, but actually is much more than that. Digital transformation represents a fundamental shift in how businesses are operating and engaging with their customers.
However, during the discussion, we also spoke about the difficulties many businesses face when trying to export services. The challenge for many small and medium sized businesses (SMBs) in the region, in expanding beyond their national borders, is their lack of experience combined with a lack of a clear strategy. This often results in SMBs prematurely abandoning their internationalization efforts, and instead focusing on the domestic market.
During the discussion, I also spoke about Belatrix’s experience. Belatrix in many ways is quite unusual, because we started as an international company, delivering services to the USA. Only recently, in the past couple of years, have we also expanded to deliver services in Latin America. If organizations want to export more products and services, it means we need to have people with the skills and capabilities to compete on a global stage. For example, here at Belatrix, we found it difficult to hire the right talent when we were just starting our business – and that was one of the key drivers behind us investing significantly in training. Today, our training capabilities have become a competitive differentiator in a highly competitive market to hire technology graduates.
I greatly enjoyed the panel discussion yesterday, and hearing about the different experiences from across the Americas. Thank you to ALES, the Export and Investment Center of the Dominican Republic, along with the Services Coalition of the Dominican Republic (CSRD), for arranging the excellent event.