Argentina’s knowledge economy is growing at a rapid rate, adding value to the country’s exports. The software industry currently employs 120,000 people and the government hopes to increase that figure to half a million employees by 2030.
“The qualitative leap Argentina needs to make is to export intellectual property,” Knowledge Economy Under-Secretary María Apólito said in an interview.
In which areas of the knowledge economy does Argentina have the most potential to compete with the world?
We have great potential in the area of software. We are the leading software exporter in Latin America, [the] product of a law that lasted 15 years [2004-2019], placing the sector in a position of advantage compared to other areas of the knowledge economy that will need to be consolidated and supported.
Another area that seems to me to have a lot of potential is biotechnology. Argentina has great potential in the three main areas where biotechnology is applied: human and animal health and agriculture. In the satellite industry we are also now very competitive as we manage almost the entire value chain – the only piece missing is the launch pad but in everything satellite related from design to manufacturing from components and assembly, we have a very consolidated production line.
The common denominator across all three areas has been state policies transcending changes in government. When things are done well beyond political colors, Argentina has relevant comparative capacities. We had a major satellite plan that spanned several decades, a biotechnology law that began in 2007, and a software law that emerged in 2004.
Are human resources Argentina’s main asset for building knowledge-based businesses?
Yes, current and potential human resources are fundamental. We have a great public university system that is free and has always generated very good human capital. We have good infrastructure – almost 80 percent of Argentina’s territory is connected. For companies exporting knowledge-based services, the different time zone is also favorable to be able to work for countries requesting such services. And we have a consolidated science and technology system.
It is important not only to export working hours, development or consultancy, but also to export intellectual property and patents. The qualitative leap that Argentina must make is not to export more subcontracting to foreign companies and then to have to buy a software patent which contains an input of Argentinian knowledge and which has also been supported. by the state for years through public education and science and technology grants. The same could happen to us with drugs and vaccines.
In Argentina, poverty reaches 42 percent and six in ten children are impoverished. In the past three years, there has been an economic recession with the social crisis accentuated by the pandemic. This will have an impact on education. These human resources, these talents on which the knowledge economy feeds, are they in danger in the future?
I don’t think they are in danger but we have to do something urgently. The Ministry of Productive Development is deeply concerned that Argentina is coming out of this situation with more jobs and for that we need more production.
In the face of this, there are short-term strategies to address the pressing issues of inclusion of those who are not in the labor market today, especially young people. Last year we launched the ‘Plan Argentina Programa, which is free and gives everyone the opportunity to learn to program in the basic languages demanded by the software industry today. We said there were 10,000 openings. Right now we have 7,000 people taking the remedial course and next week we are launching the first cohort of those who will take programming languages. Last year 166,000 people were registered in just four days.
If we could get today’s unemployed youth to learn to program, they would have quality work. In this type of business, the starting salary is on average three and a half years of the minimum wage. It would be something really revolutionary because it would also motivate other kinds of neighborhood when they saw their friends making money without getting into trouble or waiting for a social plan. We have the opportunity to get them out of this situation and also provide the resources that the industry needs to continue to grow.
What is Argentina lacking to have more businesses – funding, deeper capital markets or regulations to create new industries?
Today we have 464 companies registered and awaiting final assessment for the Register [of the Knowledge Economy Law, Régimen de la Ley de Economía del Conocimiento] according to legal requirements, just over half of which come from the Software Law. Of these, around 280 companies are biotechnology, while there is also Industry 4.0, the satellite industry, audiovisual production, professional and geological services, and research and development services.
The Register is attractive because in a short time we will be granting services with a stability of 10 years. Once we stabilize the macro economy, the dollar, external debt and everything in between, Argentina’s context for attracting investment will be important.
We already have a good tax incentive program, a favorable exchange rate and human resources that are paying off – many companies have announced investments and have hired people in the provinces which is also one of our big objectives, have federal knowledge of economics.
The ban on salmon farming in Tierra del Fuego has sparked a heated debate. You mentioned on social media that the Argentinian biotechnology company Tecnovax has solved the health problems of Chilean aquaculture. How did they do it?
It is a company that manufactures biotechnology products for animal health in general. I don’t know if they started developing antibiotics which then turned into vaccines. The first treatment was against the ISA virus, which was then in Chile, and then they continued to make different types of biological formulas for other viruses that started to appear. They exported it to Norway, Denmark and other aquaculture countries. Our Minister Matías Kulfas fears that instead of banning, people think of a production where the environment is respected while diversifying the economy.
The global market is moving in a direction where companies are incorporating more technologies and production standards that protect the environment. Why does Argentina still have this tension between development and environmental thinking?
We must have had the same development model for years. We lack this debate to reconcile an economically valid industrial model for our country with environmental issues. This ministry is working on a law of electro-mobility to get out of the tracks to promote the energy transition to green hydrogen, there is a line of thought in this direction.
The software industry has 120,000 employees in Argentina, with an unmet demand of 10,000 jobs per year.
◆ At least 323,000 people are dedicated to professional export services.
◆ Before the pandemic, biotechnology employed 40,000 workers.
◆ The audiovisual industry creates 9,000 jobs.
◆ There are 464 companies registered in the Register of the Law on the Knowledge Economy (Régimen de la Ley de Economía del Conocimiento – certificate granting tax advantages for certain companies / taxpayers – according to the regulations, they must be registered ).