Today’s rampant global developer shortage means that businesses are struggling to build in-demand digital products. As a result, companies could miss out on $8.5 trillion in tech-related revenue by 2030.
Fortunately, nearshoring is a promising solution to meet your long-term technology needs. Essentially, nearshoring can help fill your teams, elevate quality and innovation, and speed up time-to-market.
In particular, U.S. companies ready to reap these benefits are often choosing between Colombia vs. Brazil for nearshore technology outsourcing. Both countries boast of elite developers, advanced IT ecosystems and high-value rates.
To navigate these premier destinations, leverage our in-depth comparison below. We’ll analyze nearshoring to Colombia vs. Brazil in detail, so you're well-informed about your options.
Content Overview
Why LatAm Nearshore Technology Outsourcing?
The demand for remote Latin American developers has increased 70% since 2020. It’s no wonder why, considering that this region is well-suited to meet the needs of U.S. companies.
Here’s how LatAm stacks up to other regions:
- Mature IT ecosystems. LatAm tech infrastructure has seen major advancements, including investments, tech parks, government programs, new startups, developer communities and more.
- Exceptional talent. LatAm countries are some of the top-ranked in the world for tech skills. Overall, developers here are specialized, experienced and keen on long-term opportunities. What’s more, they have remote work ethic and understand U.S. workplace expectations.
- Affordable rates. Competitive salaries for this region are still 40-50% lower than the U.S., unlocking cost savings for your business.
- Seamless logistics. You can’t beat aligned time zones, cultural know-how and great English proficiency. For these reasons. collaboration with LatAm developers is smoother than in other regions.
Colombia for Nearshore Technology Outsourcing
Nearshoring in Colombia is a superb choice due to its talent-rich and fast-growing IT market. Let’s go through the details, so you can better choose between Colombia vs. Brazil for nearshore technology outsourcing
Overview of Outsourcing Climate
Make the most of Colombia’s steadily growing economy and strong outsourcing climate, involving:
- A business climate score of A4
- An ease of doing business score of 67/190
- Pro-tech regulations such as the ICT Sector Modernization Law, which eases restrictions for ICT services
While Colombia’s business environment is excellent, you’ll want to be cautious about security for in-person visits as a few regions of Colombia are flagged as “Do Not Travel.” Cybersecurity is also fairly high, with 9% of LatAm cybercrime occurring here.
Current State of the Technology Sector
Colombia’s tech sector sets the gold standard for growth. It saw a 14.6% increase in 2022 and is estimated to surpass $690 million in revenue in 2024.
Colombia is known for its cutting-edge hubs in Bogotá and Medellín. Here you’ll enjoy tech parks (such as Ruta N), startups, developer communities and more. In fact, Colombia is ranked 4th in LatAm on the 2023 Global Startup Ecosystem Index.
Analysis of the Tech Workforce
(Source: 2023 Global Skills Report)
Colombia’s tech workforce is highly skilled with a global ranking of 6th in technology skills by Coursera. Developers here are also well-educated, with the #2 engineering graduation rate.
While Colombia isn’t as immense as Brazil, it has a good-sized workforce that includes:
- 62,000+ developers
- 11,100+ software companies
- 350+ IT providers listed on Clutch
Key Government Tech Initiatives
You can expect a tech-friendly government when nearshoring in Colombia through their IT Ministry (MinTIC).
Initiatives are mainly focused on investments, tech parks and training programs. For example, Colombia recently spent $2.5 million investment to bring their tech education up to speed.
Insights into Business Practices & Logistics
Ranked 11th globally on the Kearney Global Services Location Index, Colombia provides a seamless outsourcing experience. It’s within the GMT-5 time zone, which is the same as EST, allowing for workday overlap.
Nearshoring in Colombia also offers solid cultural proximity and experience working with U.S. companies (as most of its IT exports go here).
Find out more about nearshoring in Colombia in our in-depth report.
Brazil for Nearshore Technology Outsourcing
Get the full picture on nearshoring to Brazil. Let’s discuss this country’s advantages and features, so you can choose between Colombia vs. Brazil for nearshore technology outsourcing.
Essentially, Brazil is a huge, fast-expanding market with a world-class startup scene and available developers.
Overview of Outsourcing Climate
Nearshoring to Brazil is a powerful choice for your technology needs, as it has:
- #1 largest GDP in Latin America
- 11th largest software services market in the world
- A business climate score of A4
- An ease of doing business score of 124/190
- A stable democracy score of 6.7/10
That said, security may be a downside if you’re keen on in-person visits, for this country has a few “Do Not Travel” zones due to crime.
Cyber-attacks are also the highest regionally, accounting for 22% of successful cybercrime in LatAm. In 2023 alone, 68% of Brazilian institutions faced ransomware attacks.
Current State of the Technology Sector
(Source: 2023 Global Startup Ecosystem Index)
Brazil’s IT outsourcing market is a force to be reckoned with, reaching $6.63 billion in revenue this year. It also has a solid growth trend of 9.38% yearly.
This country’s technology ecosystem is also highly innovative, as it’s:
- #1 in LatAm on the 2023 Global Startup Ecosystem Index, with 28 cities ranked
- 41% of total startup value in LatAm
- Host to 16 high-value unicorns
In Brazil’s most advanced developer hubs, you’ll find tech parks, startups and rich tech communities. Top startup cities include:
- São Paulo (1st in LatAm)
- Curitiba (6th in LatAm)
- Rio de Janeiro (7th in LatAm)
- Belo Horizonte (10th in LatAm)
- Porto Alegre (14th in LatAm)
- Florianopolis (18th in LatAm)
- Analysis of the Tech Workforce
Analysis of the Tech Workforce
(Source: 2023 Global Skills Report)
Nearshoring to Brazil gives you access to a massive, first-rate talent pool characterized by:
- 500,000+ developers
- 238,000 yearly STEM graduates
- 8,000 software development companies
- 13,400 registered startups (up 244% since 2013)
- 280+ IT outsourcing companies listed on Clutch
Brazilian developers have a reputation for top skills and innovation. Just consider that Brazil is 14th globally for technology skills and has a startup rate that rivals the U.S. In particular, Brazilian developers tend to specialize in JavaScript, HTML, SQL, Java, Node.js and Python.
Key Government Tech Initiatives
Brazil’s IT market is well-supported by government initiatives such as:
- 369 business incubators, 100 tech parks and 57 accelerators
- ABES programs, such as ABES Conecta!, the ReciTech Program and the ABES Startup Internship Program
- Anprotec workshops, programs and opportunities for tech students
- Estação Hack (Hack Station) offers free programming and training to young students and professionals
- “Lei do Bem” promotes tax incentives for tech innovation and R&D, including exemption for software/IT goods
Insights into Business Practices & Logistics
(Source: Kearney Global Services Location Index)
Overall, Brazil is rated 4th globally on the Kearney Global Services Location Index.
This country is ideal for U.S. companies seeking to nearshore, as its time zones GMT-3 and GMT-4 have all-day overlap with EST. Plus:
- 42.8% of Brazil’s software services are dedicated to outsourcing
- 65% of Fortune 500 companies are located here
Explore Brazil’s full software development market in our special report.
Comparing Colombia vs. Brazil for Nearshore Technology Outsourcing
Both Colombia and Brazil are first-rate options for nearshore technology outsourcing. Just consider that both are ranked within the top 12 outsourcing locations by Kearney!
During your decision-making process, you can have peace of mind that both these countries have:
- Robust IT ecosystems. Both top the charts for startup scenes, developer communities, government programs and more.
- Elite talent pools. Technology skills in Colombia and Brazil are world-class, ranking within the top 15 globally.
- Savvy for North American & European markets. Both countries provide seamless collaboration through overlapping time zones, cultural know-how and English skills.
- Value-first rates. Developer rates across LatAm are 40-50% lower compared to U.S. developers. (Get full details on rates below!)
Main Differences of Colombia vs. Brazil
Let’s take an in-depth look at the variations between nearshoring in Colombia vs. Brazil.
Brazil
Brazil is a technology outsourcing giant with top-ranked talent and a robust startup culture.
Pros
- Largest & fastest-growing talent market. Brazil has the largest talent pool in LatAm by far with 500,000+ developers and 230,000+ new graduates yearly.
- Top-of-the-line startup ecosystem. Brazil has a highly dynamic startup scene that’s rated #1 LatAm and home to countless unicorns. It has a whopping 13,400+ startups, which puts it within the top 10 worldwide for startup output.
- Excellent skills ratings. Brazilian developers are some of the best in the industry. They’re ranked 14th globally for technology skills, especially in databases and computer programming. Brazil’s also ranked 4th globally for outsourcing-friendliness.
Cons
- Low cybersecurity. Brazil has the highest cybercrime rate in LatAm at 22%. For this reason, you’ll want to address strong cybersecurity with your outsourcing partner.
- Some crime issues. On-site visits should be planned carefully when nearshoring to Brazil as it has a few regions listed as “Do Not Travel” due to crime.
- Low country-wide English. Brazil is poorly rated by the EF EPI English proficiency exam (70th globally). Even so, software developers tend to have top English skills compared to the country average.
Colombia
Colombia is a business-friendly destination with elite developers and innovative mindsets.
Pros
- Strong business climate. Ranked 11th in outsourcing-friendliness, Colombia makes it easy for businesses to find their footing here. Not only do they have a 67/190 ease of doing business score, but the government has passed laws to ease red tape and taxes.
- Growth exceeds larger countries. Colombia may have a smaller population, but its growth rate of 14.6% last year and 9.4% on average is #1 in LatAm. That makes this fast-growing destination ideal for future-thinking businesses.
- Exceptional skill rankings. Colombia has globally competitive talent, with 6th place in technology skills worldwide and #2 in engineering graduation rates in LatAm. Overall, Colombian developers are highly educated and well-versed in today’s in-demand programming languages.
- Recognized for innovation. Colombia is known for its state-of-the-art tech facilities and programs. Specifically, Medellín has been named the “Silicon Valley of Latin America.”
Cons
- Fewer developers & options. Colombia’s smaller than Brazil and Mexico, which means you’ll have a more limited talent pool and fewer software companies available.
- Some security issues. A few regions in Colombia are currently listed as “Do Not Travel,” so you’ll want to take precautions if you want to schedule in-person visits.
- Low cybersecurity. Like other LatAm countries, Colombia is experiencing heightened cybercrime. Discuss security protocols with your outsourcing partner to guarantee safety.
- Low English score. Colombia is ranked 75th globally for English skills by EF EPI (75th globally). Keep in mind these are country averages and software developers tend to have excellent English.
Average Nearshore Outsourcing Rates
As you estimate your nearshore technology outsourcing costs, you’ll want to thoroughly analyze rates. After all, developer rates are often the biggest expense of your budget.
Use the chart above to calculate nearshoring in Colombia vs. Brazil according to your tech stack. Both destinations give you access to top savings compared to U.S. developers, so you can’t go wrong.
If you want to look at rates according to seniority, check out our detailed pricing tool as well.
Hire the Right Outsourcing Partner for Your Business
With our guide, deciding between Colombia vs. Brazil for nearshore technology outsourcing should now be a trouble-free process. As you search for partners, keep in mind that the quality of software companies varies within countries as well.
To pinpoint the right partner in your chosen location, get a strong sense of your specific needs first. Define your business goals and customer pain points. From here, you can settle on your project scope, technology requirements and ideal developer profile.
Ready to nearshore to Colombia, Brazil or another LatAm country? At TECLA, our elite talent pool comes from 18+ Latin American countries. Contact our nearshore specialists to find the best developers for your needs!
LatAm Making?
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