Betting on Argentina has already become a real possibility for Spanish companies, who see this country as a suitable place to expand their business. First, because of the size of its market, since it has almost 45 million inhabitants. And second, because of its position as the gateway to Latin America, for which it has several characteristics that give it an advantage over the rest of the countries on the continent.
In this sense, Argentina has a large number of highly qualified professionals, a much higher percentage than the rest of the region, “especially in what has to do with STEM training -Science, Technology, Engineering and Mathematics, due to its acronyms in English-, which play a key role in the digital world”, explains Andrés Saborido, director of Wayra, Telefónica’s open innovation hub, which is of Argentine origin. “In Argentina you can find talent, you can find a market and, in addition, especially for the last 15 years, it has had an important development in the digital sector,” explains the expert.
As an example of this last characteristic, Saborido points out that Argentina continues to be the only country in Latin America that has four unicorns -startups with a valuation of more than 1,000 million dollars-: MercadoLibre, Despegar, OLX and Globant. “This not only generates business opportunities, but also represents a mirror for the rest of the entrepreneurs who are born and want to do business in the region,” he highlights.
equity support
In this sense, it is also worth noting the approval in 2017 of the Law to Support Entrepreneurial Capital, which “favors the development of the industry through different tools, such as Matching Funds -co-investment of the State together with private funds-, and tax incentives that allow business angels and organizations to deduct up to 85% of their investment”, says Agustín Rotondo, Country Manager of Wayra Argentina.
“The impact of this Law is already reflected, since in the first six months of 2018 the investment of all of 2017 was exceeded,” says Rotondo, citing a report by the Argentine Association of Private Entrepreneurial and Seed Capital (ArCap).
Another aspect that favors Spanish companies making the leap to Argentina is the presence of multinationals in the region for many years, which exert a driving effect and serve as support for entrepreneurs who want to do business.
And, of course, the importance of sharing culture, language and past cannot be ignored. “The cultural relations and the links that have historically been created between the two countries favor understanding, relations and business between the two,” insists Saborido. “The way of thinking of an Argentine and a Spaniard have many points in common, which facilitates the creation of businesses,” he concludes.
Disadvantages and opportunities
However, not everything is rosy when companies arrive in Argentina. Beyond the registered success stories, there is still a long way to go in the development and scale of their businesses in an uncertain macroeconomic context, as Rotondo recalls. “Successful entrepreneurs are those who know how to take advantage of the context to their advantage, turning it into a competitive advantage; a mission that is not easy, but not impossible either,” he points out.
As for the sectors in which it may be easier for Spanish companies to jump, experts agree that the most appropriate would be agriculture. “It is a segment with great opportunities, due to the magnitude of the local industry and its relevance worldwide,” says Rotondo. “Any agribusiness that wants to play in the big leagues has to be in Argentina,” he concludes.
“The products developed for agriculture in Spain, especially the digital ones, work very well in Argentina,” insists Saborido, along the same lines as his successor.
Tourism and renewables
Another segment of activity that the director of Wayra Spain highlights is renewable energy, which is growing a lot, and in which national companies have “quite a lot of experience”.
And finally, the situation of tourism stands out, “one of the strongest sectors of the Spanish economy and with a lot of potential in Argentina.” “It still has a lot to develop, with the problem of being very far from the big markets, such as Europe or the US,” he warns, although he points out that “it has significant natural wealth that has not yet been exploited.”
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