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North American companies have increased remote hiring in South America by 70% since 2020. In particular, they are turning to LatAm to leverage its world-class tech talent.
Ultimately, nearshore technology services are the ideal solution to fill your tech teams in today’s competitive talent landscape. In turn, having first-rate experts at your side means you can boost your product quality, timeline and outcomes.
Fortunately, you have a wealth of superb options in LatAm. Two major destinations present the following dilemma: Colombia vs. Peru for nearshore technology outsourcing. Here we’ll analyze these countries in-depth, so you get full vision into your tech hiring decisions.
If you want to explore more nearshoring options, don’t forget to check out Argentina and Brazil as well!
Content Overview
Trends in Nearshoring to Latin America
IT outsourcing from Latin America is set to reach a whopping $27.57 billion in revenue by 2029. This region has become technology hotspot in recent years due to:
- Fast-growing IT infrastructure. Countries across LatAm have heavily invested in their technology facilities, educational programs and entrepreneurial scenes. This level of advancement means that LatAm is well-equipped to meet the rigors of U.S. companies.
- Top-notch talent. LatAm countries like Colombia and Peru have truly exceptional talent that’s well-educated, experienced, remote-savvy and career-driven. The sheer raw talent makes this region stand out from the others.
- Value-driven rates. Though talent in LatAm is among the very best, you won’t pay a premium. Competitive developer rates tend to be 40-50% lower than the U.S.
- Convenient teaming. Choosing to nearshore simplifies your team logistics, especially when using the agile method. You’ll enjoy streamlined, real-time collaboration through shared time zones, cultural proximity and English proficiency.
Nearshoring to Colombia
Deciding between Colombia vs. Peru for nearshore technology outsourcing can be difficult. Here we’ll go over nearshoring in Colombia, including its premier talent and rapidly maturing IT ecosystem.
Economic and Political Landscape
Colombia has one of LatAm’s fastest-growing technology markets. It’s ideal for outsourcing due to:
- A business climate score of A4
- An ease of doing business score of 67/190
- Government support such as the ICT Sector Modernization Law, which eases taxes and business processes
On the whole, Colombia has a strong, pro-business climate. That said, plan any in-person visits carefully, for this country has a few “Do Not Travel” zones. Cybercrime is also an issue to watch, with 9% of LatAm cyber-attacks happening here.
Technology Ecosystem
Colombia raises the bar with a rapidly expanding IT outsourcing market that experienced a 14.6% increase in 2022. In fact, revenue this year is estimated at $690 million.
As Colombia’s market matures, it’s building up state-of-the-art facilities, especially in top outsourcing cities such Bogotá and Medellín. Just consider that Colombia is listed 4th in LatAm on the 2023 Global Startup Ecosystem Index.
Talent Features and Availability
(Source: 2023 Global Skills Report)
Considering Colombia’s medium-sized population, this country also offers plenty of outsourcing options, including:
- 62,000+ developers
- 11,100+ software companies
- 350+ IT providers listed on Clutch
- Top programs through its IT Ministry (MinTIC)
In addition, the government has lent a strong hand of support to the tech industry. Colombia has invested significantly in tech parks, training programs and educational infrastructure.
Business Environment and Practices
Nearshoring in Colombia offers frictionless logistics when it comes to technology outsourcing, such as:
- Located in the GMT-5 time zone (same as EST)
- Track record working with U.S. companies
- Cultural know-how
- Solid English proficiency
Given these advantages, it’s easy to see why Colombia is ranked 11th globally on the Global Services Location Index.
Get an expert look into nearshoring to Colombia in our detailed report.
Nearshoring to Peru
Overall, Peru is an innovative and talent-rich destination with a strong tech education foundation.
Let’s go in-depth into the advantages of nearshoring to Peru, so you’re ready to choose between Colombia vs. Peru for nearshore technology outsourcing.
Economic and Political Landscape
Peru is an up-and-coming nearshoring destination with a solid business environment, including:
- 6th largest GDP in LatAm
- A business climate score of A4
- An ease of doing business score of 76/190
While nearshoring to Peru has great market potential, it’s suffered in recent years from:
- Economic fluctuations, including a -0.55% drop in GDP in 2023.
- Political turmoil, with six presidents in the last four years and a low democracy score of 5.8/10.
- So-so security if you’re keen to visit in-person. It has a handful of “Do Not Travel” zones due to crime and terrorism.
That said, these economic and political factors have steadied for the time being. The hope is that these events were a blip in an otherwise stable outsourcing destination.
Technology Ecosystem
(Source: 2023 Global Startup Ecosystem Index)
Lima’s IT outsourcing market is seeing excellent growth, with $551 million in revenue estimated for 2024, as well as a growth rate of 9.22%.
This country also has a rich tradition of innovation. Although it doesn’t yet have its first unicorn, it’s known for a culture of startups and entrepreneurship, such as:
- Lima is ranked 12th in LatAm for its startup ecosystem
- Peru is ranked 6th in LatAm by StartupBlink
- Peru is ranked 65th on the 2022 Global Innovation Index
- A network of 11 Science and Technology Parks (STPs) across Peru
- Robust investment programs including Startup Peru and UTEC Ventures
Talent Features and Availability
(Source: 2023 Global Skills Report)
Nearshoring to Peru connects you to a small yet well-educated talent pool:
- Between 38,000-50,000 developers
- #1 in engineering tertiary degrees
- 5th in LatAm and 20th globally for technology skills
- Participants in the MIT Regional Entrepreneurship Acceleration Program (REAP)
- 68+ IT outsourcing companies listed on Clutch
In particular, Peru has a reputation for exceptional tech education through its system of UTEC (University of Engineering and Technology) campuses.
What’s more, the Peruvian government supports training and investment programs via its Ministry of Innovation. This includes Plataforma Vincúlate and Startup Peru (which has financed 3,400+ projects to date).
Business Environment and Practices
(Source: Kearney Global Services Location Index)
Peru offers seamless logistics for nearshore technology services. To start, Kearney ranks it 43rd globally in outsourcing-friendliness. In addition, it’s:
- Located in GMT-5 (same as EST)
- Ranked 9th in LatAm and 51st globally for English skills
- Demonstrates top cultural proximity
Get the insider’s tour of Peru’s technology outsourcing market in our expert report.
Comparing Colombia vs. Peru for Nearshore Technology Outsourcing
Keep in mind that Colombia and Peru are both superb nearshoring destinations. Yet, when choosing between Colombia vs. Peru for nearshore technology outsourcing, you should weigh these potential differences.
Main Differences of Nearshoring to Colombia vs. Peru
Here’s how Colombia and Perustand apart as nearshoring destinations.
Nearshoring to Peru
Peru has huge potential in tech skills, education and innovation to become a top nearshore destination.
Pros
- Well-educated and skilled developers. Peru has first-rate STEM education. Developers here have a reputation for outstanding technical skills in various programming languages.
- Good IT outsourcing growth. While the rest of Peru’s economy has seen ups and downs, the IT outsourcing market is thriving.
- Culture of innovation. Lima is known as a startup hub and Peru as a whole is ranked high in LatAm for its startup system. Overall, innovation is a key value for tech companies here.
- Top English proficiency. Peru is within the top 5 South American countries for English, while Colombia is fairly low on the list. In turn, this also gives Peruvian developers closer cultural proximity to collaborate seamlessly.
Cons
- Smaller pool compared to other destinations. Peru does not stack with other countries in terms of the number of developers. This means you may have fewer options when nearshoring to Peru.
- Political turmoil. Peru has sworn in six presidents in the last four years, which is a sign of in-country political chaos.
Nearshoring to Colombia
Colombia has a powerful pro-business tech climate with innovative communities and elite developers.
Pros
- Strong business climate. Colombia rises to the top of rankings for outsourcing-friendliness and business climate. It also has special incentives available for tech companies. As a result, Colombia’s IT outsourcing sector is in a process of rapid growth.
- Top-ranked developer skills. Colombian developers have outstanding technology skills and educational backgrounds, ranking high on global and LatAm technology scorecards.
- State-of-the-art programs. Colombia is at the frontlines of creating innovative tech communities. Just consider that Medellín is known as the “Silicon Valley of Latin America.”
Cons
- Some security issues. Colombia has made major strides in improving security. That said, it has a few regions flagged as “Do Not Travel.”Like Peru, you should be cautious when planning in-person visits.
- Low cybersecurity. Colombia has high rates of cybercrime, so you’ll want to create a robust security plan with your nearshore outsourcing partner.
Average Nearshore Outsourcing Rates
The most significant item in your nearshore technology budget is labor. Fortunately, countries like Colombia and Peru offer affordable developer rates – nearly half that of U.S. developers!
- Similar rates by technology. Both Colombia and Peru have similar rates, though the latter has slightly lower rates for Node.js, Ruby, iOS and Android. (See our chart above for more details.)
- On-par cost of living. The cost of living is almost identical, which means the costs of tech infrastructure and other bills should be on par between Colombia vs. Peru.
- Tax incentives. While your exact tax scenario may vary, both countries offer special rebates and schemes for tech companies.
Plus, you can check out developer rates according to experience level by using our pricing tool.
Choose Colombia vs. Peru for Nearshore Technology Outsourcing
Choosing between Colombia vs. Peru for nearshore technology outsourcing can be a tough choice. With our in-depth guide, you can now identify the right destination for your specific goals and customer demands.
Once you’ve pinpointed location, it’s time to search for the right partner. The quality of technology outsourcing companies varies widely, so do your due diligence. Before reaching out to potential partners, prepare internally. For example, put your top KPIs on paper as a starting point to discuss your project scope, tech stack and talent needs.
At TECLA, we’re strong advocates of LatAm’s incredibly rich talent. Our developers come from 18+ Latin American countries and are at the top of their fields. Get in touch with our nearshore specialists to learn more!
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