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A gold mine is under threat
Exports of knowledge-based services are booming and have already reached a level of close to US$72.7 billion. An explanation of the trend.
President Trump threatened Colombia with implementing restrictive measures under the IEEPA. The announcement brought to light a reality that is little talked about: many professionals were frightened because they thought that their income from abroad could be affected by restrictions on the flow of capital. Colombians are invoicing from their homes to many parts of the world and they are increasing in number. And all indications are that this is happening throughout the region.
According to the Inter-American Development Bank's Trade and Integration Monitor, released last November, "exports of Knowledge-Based Services from Latin America and the Caribbean grew 4.7% year on year in the last decade, a higher rate than that of goods (2.9%) and total services (4.3%). As a result, SBC exports amounted to US$72.7 billion in 2023."
This is what made many people panic with the announcement of eventual capital flow restrictions between the U.S. and Colombia. But the numbers show that the trend is widespread and Hispanic talent is transforming the global employment landscape thanks to technology and the rise of remote work. This shift allows thousands of Hispanic American professionals to access international markets and bill in foreign currency without leaving home. However, it also raises questions about the sustainability of this trend and the challenges associated with potential economic constraints between countries.
In recent years, remote work has gained ground due to technological platforms that facilitate remote collaboration. Tools such as PayPal, Stripe and TransferWise allow professionals to receive payments in dollars, euros or other currencies, eliminating geographical barriers. This model has been particularly advantageous for graphic designers, programmers, translators and consultants who find opportunities in foreign companies.
The trend of cross-border talent
According to World Bank data, remittance flows to Latin America have reached record levels in recent years, reflecting the impact of remote labor on the regional economy. In addition, the balances of payments of several countries have registered an increase in the export of services, particularly in sectors such as technology, design and professional services.
The Economic Commission for Latin America and the Caribbean (ECLAC) reports on its statistics page that other services represented total exports for all countries in the region of US$99.3 billion, a new record.
This growth is driven by the high demand for Hispanic talent in markets such as the United States and Europe, where companies are looking for skilled professionals at competitive costs, but in remote work mode.
In this context, specialized platforms have also emerged to connect international companies with remote workers in Latin America. Sites such as Workana, Toptal and Upwork have played a key role in facilitating these connections, allowing professionals to access global projects without the need to emigrate.
Challenges and opportunities
Although remote work offers significant advantages, it also poses major challenges. One of them is the lack of clear regulation in many countries on taxes applicable to income earned abroad. This can create uncertainty for workers who must comply with tax obligations both in their country of residence and in the country where the hiring company is located.
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In addition, the volatility of diplomatic and trade relations between countries can impact the flow of payments and the economic stability of remote workers. Economic sanctions or restrictions on payment platforms could hinder international transactions, limiting access to key markets.
On the other hand, governments' adaptation to this new reality could open doors to regularize and encourage cross-border remote work. Some countries have begun to implement digital nomad visas, which allow remote workers to temporarily reside abroad while working for international companies.
Impact on the local economy
The rise of remote work also has implications for local economies. On the one hand, it allows more people to generate foreign currency income, which can help stabilize the local currency and increase household purchasing power. On the other hand, it could also generate inequalities if only certain sectors or groups have access to these opportunities.
Governments should invest in education and training so that more citizens can take advantage of global market opportunities. Programs focused on technology, language and digital skills could bridge the gap and maximize the positive impact of remote work.
Hispanic talent is uniquely positioned to capitalize on remote work trends. With a combination of competitive skills, cultural adaptability and relatively low costs, the region's professionals have the potential to establish themselves as key players in the global services market.
However, long-term success will depend on how they manage the challenges associated with regulation, international relations and access to technology. Governments, businesses and workers have a crucial role to play in ensuring that this trend benefits not only individuals, but also local and regional economies.
Remote work is redefining the boundaries of the labor market and positioning Hispanic talent as an engine of economic growth and social transformation. The key is to seize opportunities, adapt to changes and face challenges with strategies that drive sustainable development in the region.
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