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Latin America: cities for entrepreneurs

Learn about entrepreneurial cities poised for expansion, thanks to their growing technological and logistical ecosystems, as well as growing economic prosperity.

Woman in a business room

The year 2021 will continue to be a great year for those entrepreneurs who know how to identify and direct their attention to digital businesses. Photo: Freepik

LatiAmerican Post | Noris Lourdes Torres Guevara

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Leer en español: Latinoamérica: ciudades para emprendedores

Entrepreneurial youth has started many of the technological powers of this decade, such as Facebook, Twitter, Instagram, LinkedIn, among others. All these platforms were founded by young people under the age of 30. That means that 2021 will continue to be a great year for those entrepreneurs who know how to identify and direct their attention to digital businesses.

A study published by Oberlo revealed which are the main cities that offer entrepreneurship ecosystems, in order for entrepreneurs to turn their economic setbacks into great creative and innovative opportunities. That is why the index achieved shows the cities best prepared to provide an entrepreneur with what he may need to maintain and build a business from scratch: from bootstrapping to logistics details for the success of a company.

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The study was based on some factors that reflect its innovation, economic strength, and entrepreneurial spirit. In addition, the infrastructure required to start a business was analyzed, such as economic freedom, the deadline to create the company, women entrepreneurs, and the aid they provide from COVID-19. In the technology / digital category, ecosystems and technological capital were considered. In the import/export classification, logistics ecosystems, shipping cost deviation, and access to global markets were assessed. And finally, the funding categorization and bootstrapping looked at unemployment benefits, small business loans, business taxes, and venture capital.

The study generated quite an interesting result, where Santiago ranks first among the top 5 Latin American cities for entrepreneurial success, while São Paulo and Lima rank second and third respectively. For its part, Bogotá was ranked fourth, followed by Mexico City and Medellín in sixth place. Santiago has been carrying out entrepreneurial initiatives for a long time, due to factors that raise its position on the global stage, such as low business taxes and investment in human capital.

Other similar studies

On the contrary, a similar study called Entrepreneurship in times of pandemic 2021, carried out by Game Changers and published on the IPSOS web portal, shows that Colombia is in first place with 61% of the countries with the best entrepreneurial spirit index. The third place is occupied by Peru, the fifth place of Mexico, and Chile in eighth place.

The study showed that entrepreneurship has increased more among women, Generation Z, Millennials, and Generation X, with less education and income.

On the other hand, 3 out of 10 citizens in the world say they have started at least one business in the past. Another 3 in 10 say they haven't started a business but have seriously considered it. Several Latin American countries, such as Peru, Colombia, Mexico, Argentina, and Chile have the highest proportion of citizens who say they have started a business in the past.

Finally, 3 out of 10 citizens of the world say they are likely to start a new business in the next two years. The probability of starting a business is higher in many Latin American countries, such as Peru, Mexico, Colombia, and South Africa, India, and Saudi Arabia.

In short, both studies agree that Colombia, Chile, and Mexico are the best countries with their respective capitals to generate any type of entrepreneurship, especially for female entrepreneurs.

Undertaking the orange future in Colombia: one of the most entrepreneurial cities of 2021

The creative and innovative industry faces a great challenge but has the opportunity to transform the challenges that come their way. According to a study published on the website of the Inter-American Development Bank (IDB), called Undertaking an Orange Future, reveals that 58% of creative entrepreneurs in Latin America and the Caribbean are mostly young people who learned to do business during the very process of gestation of their companies, starting their businesses with their own money and claiming not to generate enough income to live from their business before the health crisis caused by COVID-19.

However, in Colombia, about 30 million dollars were allocated to cover the social security of artists and cultural managers through the Orange Periodic Economic Benefits (BEPs) program. Also, through the Performing Arts Public Shows Law, funds will be allocated for activities of creation, virtual training, production, and circulation of public performing arts shows during the next 18 months. In Chile, the Ministry of Cultures, Arts, and Heritage announced the distribution of approximately 17 million dollars to the creative sector and the extension of agreements. In Mexico, the Ministry of Culture announced the creation of a Bank of Functions, to pay the artists, creators, and lecturers hired between March 20 and April 20.

One of the challenges of 2021 is to recover from the hard blow that the COVID-19 pandemic has caused to the cultural sector. That is why Colombia has the "ReactivARTE Commitment Plan", with the purpose of recovering between 80 thousand and 100 thousand jobs in this sector. On the other hand, several countries have spoken out to provide access to culture through digital platforms. As is the case of Chile with "Choose Culture" and of Mexico with "Cultural Capital in Our House". However, these initiatives need to be carefully evaluated to make sure that copyright is being respected.