Executive Briefings

Forget 'Chindia.' Latin America is Where the Action Is.

China and India continue to attract foreign investment, but a growing number of entrepreneurs are rejecting "Chindia" in favor of Latin America as a great place to sell, source, and outsource. U.S. companies with fewer than 100 employees exported $25.8bn in goods to Latin America in 2006, up 30 percent from five years earlier, according to the U.S. Census Bureau. Direct investment by U.S. companies there was up 12 percent in 2006 to more than $170bn, says the Bureau of Economic Analysis. And the National Venture Capital Assn. says that after coming down in recent years, investments in Latin America are climbing: 20 deals--a total of $350m--were completed in 2007, vs. 8 in 2006. "The interest has really soared," says Franklin Vargo, vice president for international economic affairs at the National Association of Manufacturers. Some small companies are exporting products there, while others are sourcing materials, finding lower-cost manufacturing options, and hiring well-educated staff at bargain salaries. Consulting opportunities are also cropping up, particularly those that improve the efficiency of manufacturing operations there, says Tom Johnston, managing partner of Business Development Partners, a Mexico City-based trade consulting firm.
Source: Business Week, http://www.businessweek.com

China and India continue to attract foreign investment, but a growing number of entrepreneurs are rejecting "Chindia" in favor of Latin America as a great place to sell, source, and outsource. U.S. companies with fewer than 100 employees exported $25.8bn in goods to Latin America in 2006, up 30 percent from five years earlier, according to the U.S. Census Bureau. Direct investment by U.S. companies there was up 12 percent in 2006 to more than $170bn, says the Bureau of Economic Analysis. And the National Venture Capital Assn. says that after coming down in recent years, investments in Latin America are climbing: 20 deals--a total of $350m--were completed in 2007, vs. 8 in 2006. "The interest has really soared," says Franklin Vargo, vice president for international economic affairs at the National Association of Manufacturers. Some small companies are exporting products there, while others are sourcing materials, finding lower-cost manufacturing options, and hiring well-educated staff at bargain salaries. Consulting opportunities are also cropping up, particularly those that improve the efficiency of manufacturing operations there, says Tom Johnston, managing partner of Business Development Partners, a Mexico City-based trade consulting firm.
Source: Business Week, http://www.businessweek.com