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Why is Argentina a Regional Hub for Entrepreneurship?

Discussing last Friday's forum on Entrepreneurship, Technology, and Innovation.

By | [email protected] | December 3, 2018 12:27pm

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When Nicolás García Mayor, CEO and Founder of Cmax, was asked how he made it as a successful entrepreneur at last Friday’s forum on Entrepreneurship, Technology, and Innovation in Argentina in Washington, DC, he paused. What does it mean to be successful? Before acknowledging his wealth, fame, or social status in a way that would seem appropriate in a forum surrounding “success in business,” he encouraged the audience to reconsider their use and definition of the word in light of the current global economic climate. He addressed the disparity of wealth in the world and asked whether we are able to recognize ourselves as “successful” individuals if we are thriving in a world where nearly half of its population lives in poverty.

This is the voice of an entrepreneur. An individual who does not give into a simple question with a predictable answer, but rather offers an alternative, a frame of mind that seems to have led Argentina into being a rapidly expanding hub for social innovation. Its astute minds have paved a way for “out of the box” thinking, and have succeeded year after year in facing the challenges and benefits that social innovation carries.

Friday’s forum on ‘Entrepreneurship, Technology, and Innovation in Argentina’ in Washington DC. (Photo via Julian Ortiz, Embassy of Argentina in Washington, DC)

As Argentina became the first Latin American country to join the G20, a movement central to its reinsertion into the global economy, last Friday YPA (Young Professionals of the Americas), a member initiative of Council of the Americas, showcased Argentina’s entrepreneurial potential to key stakeholders in Washington, DC, and identified its policies that foster innovation.

Sharing stories of success and failure, and exchanging ideas as to how best promote Argentina as a regional hub for entrepreneurship, YPA strives to “connect and inspire the future generation leaders in the Americas,” accepting and encouraging failure to build up the confidence and skill necessary to create a successful business. Guest speakers Facundo Martín Diaz, Irene Hofman, Ady Bietler, Nicolás García Mayor and Guillermo Areas  took to the panel to discuss some of the most pressing topics which develop, affect and promote entrepreneurship around the country.

“Entrepreneurs generate incredible economic value and are key drivers in creating employment from their creativity and talent. They are transforming theArgentine economy.”
Gerry Bartolome, Deputy Chief of Mission, Embassy of Argentina.

The Advantages of Technological Development

Acknowledging the “rebel spirit” in Argentina and the country’s ability to confront situations that arise from both an unpredictable government and economy, Facundo Martín Diaz (Managing Partner and Cofounder of Playonholo) was first to start the discussion, expressing the opportunities that technological advancement brings to the interior of Argentina.

Discussing Argentina’s path towards a more progressive country, he argued that while government policies and the private sector can encourage the development of technological opportunity, it is more often than not, something that happens naturally. “Many companies and developers that are working globally need to expand to other cities like Salta, Córdoba and Rosario. The companies’ needs are making this growth across Argentina, despite positive action from the government.” 

He went on to recount the role of technology in breaking down borders and fighting the boundaries that isolate and prevent us from sharing ideas and spreading success to the rest of the world, stating “we live in a world with endless opportunities, where we can change the lives of many through our screen. All you need is an idea and the courage to move forward.”

Irene Arias Hofman, CEO of IDB lab. (Photo via Julian Ortiz, Embassy of Argentina in Washington, DC)

Policies that Help Foster Innovation

Taking this topic for her own, Irene Arias Hofman (CEO of IDB lab) was the first to bring to light the success of Argentine start-ups, without a myriad of government-led policies that perhaps other countries have. She reiterated the importance of creating a conducive environment where policies and the ecosystem are compatible to develop in a way that facilitates enterprise.

But why have Argentine start-ups in particular seen such success? Nicolás García Mayor pointed to the strength of the Argentine education system, highlighting the effective and powerful role that the public university service plays in Argentina. Teaching its students the importance of building something from nothing, he argues that Argentines have the power and knowledge to fight for their ambitions, and it is through this drive that they are able to achieve great things.

But they do not completely push aside government action to inspire and empower these entrepreneurs, highlighting the Buenos Aires City Government’s efforts to provide mentorship and access to government resources through its programs such as BA Emprende and Incubate.

Guillermo Areas (Head of Government Relations and External Affairs in Latin America and the Caribbean, The BMW Group) also turns to the changes seen during Macri’s administration in developing and supporting businesses. “The last years of the Macri administration, for us, have been the difference between night and day,” he said, offering his BMW’s personal experience of going from selling over 5,000 vehicles to less than 200 during Cristina Fernández de Kirchner’s last administration. He explained that due to high taxes and difficult importation rules, BMW was forced to reduce its presence in Argentina, but with the new administration, it’s experienced a positive business environment, and have since renewed and increased investments.

“To go back to the question about policies that governments need to have in place to encourage entrepreneurship,” he stated, “I think we have to build a strong base. If you have economic stability, you have predictability for investors, it’s a simple rule of law that an entrepreneur needs to build into the future.”

Nicolás García Mayor, CEO and Founder of Cmax. (Photo via Julian Ortiz, Embassy of Argentina in Washington, DC)

“Necessity is the Mother of Invention” & Gaps in the Argentine Market

While Irene Hofman stood in agreement with Areas’ claim that economic stability is crucial to success, she also developed on the idea of uncertainty, arguing that with uncertainty we can build opportunity, where people who are not traditional players are able to come up with solutions.

Ady Beitler (President and CEO of Nilus, a non-profit organization that applies technology and collaborative economic models to reduce food waste) is a prime example of this. In a country that throws away 16 million tons a year (the equivalent to over 100 River Plate stadiums), it has 6,000,000 undernourished children, with nutrition being the main cause of inequality. With food being 60 percent more expensive to buy in Villa 31 than it is in Palermo (due to the number of hands it passes through to arrive at the Villa), Beitler saw a gap in the market and sells food to villas at 10 percent of the market rate.

“In every program where there are people with low-income populations, there is a secondary market to do many things; affordable health care, affordable education – the only thing we are lacking is ideas.”
Ady Beitler, Nilus

Clearly, there is a huge opportunity for social sectors that address the economic issues of the health and education services in Latin America. Yet this is not all. According to Areas, renewable energy is also an upcoming area for new entrepreneurs and offers an abundance of opportunity. Acknowledging the emergence of electric cars into Argentina, Guillermo uses alternative energy as a clear example of how developing technology offers new opportunity and encourages young entrepreneurs to explore the market.

Ady Beitler, President and CEO of Nilus. (Photo via Julian Ortiz, Embassy of Argentina in Washington, DC

Where Can Argentina Improve?

With all panelists in agreement, these top entrepreneurs highlighted the importance of creating global relationships and connections with the rest of the world; a concept predominantly formed through trade. Trade agreements prevent entrepreneurs from being locked within a local market, stating that while the government is on the right path, it will be interesting to see if it keeps moving forward.