Three-and-a-half years ago, Ernesto Krawchik was working out of
his house, debugging code on a single computer that he shared with
his business partner, while his 1-year-old son tugged at his pant
Coming on the heels of the country's economic collapse, it was a
far cry from his days as president of Oracle-Argentina during the
tech explosion of the 1990s. "At the time our company was formed, no
one took us seriously," Mr. Krawchik says.
Today that company, Idea Factory Software (IFS), employs 90 tech
professionals and will add another 100 over the next year. At IFS's
office in the San Telmo neighborhood, known for its tango shows,
dozens of 20-somethings punch away at their keyboards, solving the
software needs of major international corporations.
Welcome to what could be called "El Barrio Silicon" - Argentina's
version of Silicon Valley. Since Argentina's $142 billion debt
default in 2001, the largest by any country in history, dozens of
software start-ups have sprouted, and existing tech firms have seen
unprecedented growth. Ironically, it was the disaster that spawned
the boom. From the ashes of the crisis, businesses, universities,
and the government began working together for the first time to
cultivate the information-technology industry. Though relatively
small in size, it is one of the unsung heroes of the country's
"The idea for this newfound collaboration is modeled on the
technology hubs in the US such as Research Triangle Park and the
Route 128 corridor in Boston," which revolve around Duke University
and MIT, says Alejandro Prince, president of Prince and Cooke, a
research firm based here.
Going strictly by numbers, the IT industry barely registers in
Argentina, accounting for less than 1 percent of an economy fueled
by soy and beef exports. But its growth rate is one of the highest.
According to the Argentine Software Chamber of Commerce, industry
revenue grew 45 percent in 2004, compared with 2002. Tech exports
climbed 83 percent.
Outsourcing is key
One reason for the growth has been the recent outsourcing
phenomenon that has spotlighted India in particular. EDS Inc., the
computer-services firm founded by Texas billionaire Ross Perot,
forecasts having 1,750 employees here this year, up from 1,250 last
year, and more than double the 700 employees of 2000.
Argentina has long had the potential to develop an IT industry.
According to the United Nations Human Development Report 2004,
Argentina ranks first among Latin American countries in number of
Internet users per capita. It is also No. 1 among Latin American
countries for research scientists and engineers, with 684 per 1
million people, according to the same report.
Still, Krawchik says, until now, "Argentina has never seriously
worked to convert its intellectual talent into a competitive