Outsourcing of Creative Work is to Argentina what Outsourcing of Programming is to India and Outsourcing of Production is to China.
The abundance of creative talent, highly educated specialists, Western culture and low cost make Argentina ideal for the outsourcing of Web Design, Graphic Design, Flash, 3D Animation and development of Games and Video.
Creative Outsourcing is starting to become more and more common place for companies and clients in the developed world. The Internet, email, and lately collaborative applications like Skype, ClockingIT, Basecamp, WebEx have made it easier to outsource creative work as long as it can be send digitally. Creative Work has long been considered difficult to outsource since it needed close contact between client & provider and is often culture specific. Creative work is now the new outsourcing threshold. Where can you best outsource Creative Work? To India where the majority of programming is going or to China, the manufacturing giant? What about Eastern Europe or Mexico? Finally all water flows to the lowest point. The lowest point is defined as the point where we find the best price & quality relationship. We have reason to believe that Argentina will become the global center for Creative Outsourcing. The abundance of creative talent, highly educated specialists, Western culture and low cost make Argentina ideal for the outsourcing of Web Design, Graphic Design, Flash, 3D, Games and Video.
What makes Argentina so well suited for Creative Outsourcing?
1. Economic setting
Companies in Argentina only started to export services after the big depreciation of its currency at the end of 2001. Let me explain why. Up until the late 1980s telecoms companies were monopolies or state owned and famous for their inefficiency. It took an average citizen in Argentina up to 15 years to get a telephone land line connection. Then, in 1989 President Menem came to power. He did two things that eventually turned Argentina into an export country for services. First, he freed up the telecoms market. The state owned companies were sold to European buyers. Companies like Telecom from Italy and Telefonica from Spain invested heavily in a modern telecoms infrastructure. They placed fiber optic lines throughout Buenos Aires and connected the major urban centers. Within a few years people had easy access to modern telephone systems. This alone however did not turn Argentina into an outsourcing power house. Menem's second priority was to curb the country’s endemic inflation. The Argentine government attached the value of the Argentine Peso to the US Dollar in equity of 1 Peso for 1 Dollar. This meant that, by law, the Peso could not decrease in value more than the Dollar. Hyperinflation came to an immediate standstill but prices kept rising, although it was at a slower pace. Soon a Coca Cola cost more in Buenos Aires than in New York. Argentina started to import more and more and its local industry started to perish. Argentina could not compete with the modern and highly capital intensive industries of Western Europe and the United States. To matters worse, Menem was unable to balance the books. The government spent more money than it received. The holes were filled with loans which resulted in an ever growing debt burden. Finally in the end of 2001 the system collapsed. The country defaulted on its loans and depreciated 3 to 1 to the dollar. This left Argentina with a modern telecom infrastructure, a competitive telecom market, highly skilled labor and wages that could be compared to those in India. The first market players to jump to the opportunity were international call center companies like Teleperfomance and Teletec. Soon to join these companies were companies that offered services with a higher added value like programming and web development. Everything that could be sold digitally prospered. You might wonder where this new situation will lead to. What is the comparative advantage of Argentina over the rest of the world? While browsing local web pages and observing the quality of local television ads you will find that Argentina has an excellent price & quality for creative services. Creativity or Western culture cannot be taught in a university. It is something deeply ingrained into a country’s genes. Where India and China can beat the world in programming and manufacturing; Argentina can be best at providing high quality creative services with a Western style. Let's look a bit more into the elements that make Argentina so suited to deliver creative services.
2. Abundance of Creative talent
When hiring creative talent in Argentina you will be surprised about the number and quality of people that apply for a creative position. The abundance and high quality of people that look for work as a web designer; graphic designer; 3D specialist; animator and video developer is just stunning. While taking a closer look at the existing creative outsourcing industry you will find a plethora of very professional companies that have great design capacity you will not see in other countries such as The United States or Europe. Looking further you will find that Argentina has always had the highest cultural standing in South America. It is the country of tango and theater shows. Buenos Aires is the center of South America for cabaret, cinema and TV productions. Recently MTV decided to move their regional head quarters to Buenos Aires. MTV Networks’ CEO Robert Bakish commented that “Exporting Argentine creativity will enforce our commitment to create the best content for our audience”. MTV is one of the most creative companies world wide.
3. Highly Educated Population
Historically, Argentina has the best educational level of South America. In Argentina there is great availability of highly skilled professionals. Argentinians have always been very successful abroad and are well-known for their professionalism. The IT sector is well developed.
4. Western Style favors Argentina
98 % of Argentinians are of European descent with the majority being a mix between Italians and Spanish immigrants. Argentina has always looked at Europe as their point of reference. Buenos Aires is known as the Paris of South America. Visitors are unanimously enthusiastic about this cosmopolitan city with its architecture, night life, cultural activity & fashion industry with its creative flair an international style.
5. Wage prices can be compared to India
Since the end of 2001 the country has recovered most of the jobs that were lost after the collapse of 2001 and some of its purchasing power. Salaries for highly qualified creative people still run at around USD 700 gross per month. Due to the abundance of people aspiring to work in the creative sector the wages remain stable. Exceptional people accept relatively low wages just to be able to work and gain experience in the industry. Furthermore, Buenos Aires is one of the cheapest capitals in the world. Salary costs in Argentina are 60% lower than the average salary costs in Eastern Europe, whereas these are 15% higher than the average wages in India.
6. Creative Outsourcing Market booming
Argentina has seen an enormous boom in its outsourcing industry since 2001. Companies like Connaxis (www.creative-outsourcing.com); Latin3 (www.latin3.com), WebAr (www.webar.com), WUNDERMAN (www.wundermandigital.com.ar), crossmedia (www.crossmedia.com), Bougie Man Media (www.boogiemanmedia.com), XAGA (www.XAGA.com), 451 (www.451.com), Bridger Conway (www.bridgerconwayinteractive.com), Group94 (www.group94.com), Gameloft (www.gameloft.com) have experienced exponential growth over the past 6 years. Lately companies like MTV made Buenos Aires its local Latin American hub to produce all creative work for the Latin American Market. Connaxis is the first company to recognize Creative Outsourcing as one of the countries greatest strategic long term opportunities. Connaxis CEO, Peter van Grinsven, commented that "The strength of Argentina lies in its abundance of creative talent, highly educated specialists, Western culture and low cost". Latin3 is the premier provider of "Exponential Marketing" services in Latin America and the U.S. Hispanic markets. Latin3 is a creative outsourcing giant, with 120 professionals, developing creative work for companies like Cisco Latin Ameria, Dell Latin America, Lexicon, Microsoft Latin America, Nextel International, Pepsi Latin America and many more. Gameloft has been developing mobile games in Argentina since 2001 and grew its staff to over 400 professionals in 2008. MTV is planning to create 200 new full time work positions. MTV Buenos Aires will become the creative center of Latin America for MTV, Vh1 and Nickelodeon, with the responsibility of creating a portion of all the creative work done for cinema.
The success of these companies are only the beginning of the story. It is a story in the making. Argentina is converting itself in the creative outsourcing center of the world and it is already a success story for first mover companies described in this article. Companies mentioned in this article experience exponential growth numbers and worldwide recognition for creative skills delivered to their international clients. It is not a story of selling web design but one of 'creativity', which is something more abstract which originates from deep within a country's culture and history. The mix between Spanish and Italian descent in a new and vast country like Argentina, its particular history and the recent possibilities of email and the Internet are creating a new industry of Creative Outsourcing. Argentina is about to become the Creative Outsourcing Workshop of the world.
Managing Director
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Connaxis Creative Outsourcing Specialist www.creative-outsourcing.com
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