Chile - Country Commercial Guide
Information Technologies

This is a best prospect industry sector for this country. Includes a market overview and trade data.

Last published date: 2022-01-25

Overview

Chile’s Information Technology (IT) sector is estimated to be one of the emerging sectors in the future, which requires hardware, software, and other IT services. IT is now used in hospitals, banks, shops, prisons, hotels, airports, libraries, and others. Chile is the second country in Latin America in digital growth, reaching 71 percent growth behind Colombia at 74 percent. The total market in 2020 was $6.4 billion, which represents 2.5 percent of Chile’s GDP, showing strong growth potential when comparing the market size percentage of GDP to other markets. In the U.S., the IT market represents approximately 10 percent of U.S. GDP, and in other European countries, IT market represents between 5 and 10 percent of those countries’ GDP.

The industry grew by 6.3 percent in 2020 and is expected to grow by 5.5 percent in 2021. This growth is due to the accelerated transition that companies are making towards digitization due to Covid-19 pandemic. Experts have a positive outlook for future growth from 2022 to be sustained by modernization and cloud service adoption that was created by the pandemic experience.

Chile also has the highest penetration of mobile connections in the region at 138 percent. Currently 3G and 4G connections dominate the market. However, Chile is planning to launch the region’s first 5G network in 2022. Internet penetration in Chile as a percentage of the total population is the highest in Latin America at 76 percent of permanent users.

Several U.S. multinationals companies have established offices in Chile. Companies such as Google, IBM, Cisco, Microsoft, and Oracle have invested in data and innovation centers. There are an estimated 4,000 Chilean companies in the IT sector, however, many these companies are very small and focused on software development and services (B2B). Between 250 and 300 companies are medium to large size companies.

The Chilean Government has developed Matriz Digital 2018-2022, a roadmap on national connectivity priorities. This plan seeks to reduce the technological gap in Chile to promote the development of the country. Matriz Digital has three areas of focus. First, to define and respect the rights of digital citizens; second to stimulate investment and infrastructure including the implementation of 5G; and third to promote digital development. 

One of the challenges of the sector is the lack of IT professionals, which has worsened due to the Covid-19 pandemic. Chilean companies import talent from Argentina, Peru, Colombia, Venezuela, and Ecuador, making Chile one of the top ten countries in the world to import IT professionals. In January 2019, Talento Digital was created to develop new capacities in training people to meet the demands of the digital economy through the integration of training institutions and government resources. In September 2019, Talento Digital pledged to train 16,000 people over the next several years through a bootcamp format.

Total Market Size

 

2018

2019

2020

2021 estimated

Total Exports

4.84

6.57

4.86

2.25

Total Imports

83.02

61.63

83.02

125.00

Imports from the US

28.85

17.25

28.85

60.00

Total Market Size

6,985.00

6,180.00

6,407.00

6,759.00

Exchange Rates

641

770

790

 

Total market size is an estimate that includes hardware, software, and IT professional services
Units: US$ Million
Source: Thompson Reuters Checkpoint/Chilean Customs Data, and IDC

Leading Sub-Sectors

  • Cloud Computing and IoT:  Chilean firms are shifting to cloud services and this drives to a huge potential for industrial growth.
  • Software and software services:  This segment experienced the fastest growth in the last years, which has strengthened by strong government support.
  • Cyber Security:  The demand of cybersecurity services and software is growing. Chile led Latin America in cyberattacks in 2020 with approximately 2.3 million attempted attacks reported.
  • Artificial Intelligence: With the challenge of the technological revolution, the need of a policy on artificial intelligence to proactively react in the face of the changes produced by the massive use of technologies.

Opportunities

5G Deployment: Chile is the first country in Latin America to award spectrum completing 5G spectrum auctions in February 2021 and is expected to launch 5G services in 2022. Implementation of 5G network and services will lead to lower delays for cloud and edge computing solutions, among others.

Artificial Intelligence: Artificial Intelligence has potential to solve many of the great economic, social, and environmental challenges. AI researchers and developers in Chile are focused on promoting the use of these tools for collective well-being.

IoT: With the arrival of 5G, the possibility of sensorization and data collection will be enhanced. According to IDC, spending on IoT will increase between 8 percent and 11 percent in 2021.

Data Centers: Along with 5G will come a series of new technologies and industries, such as Big Data, AI, Machine Learning, among others. This will cause the arrival of thousands of technology startups, who make use of the cloud creating demand for new data center facilities.

Cyber Security: Chile has one of the highest levels of internet penetration in South America, with 76 percent of the population connected, and leads the region in eCommerce sales on a per-capita basis. Cybersecurity continues to be an important issue for regulators and corporations alike following recent high-profile attacks on public and private financial institutions. Chile led Latin America in cyberattacks in 2020 with approximately 2.3 million attacks reported, an increase from the 1.5 million cyberattacks reported in 2019. Analysts attribute this increase to the combined impacts of the October 2019 social unrest and the transition to telework during the covid-19 pandemic. As a result of this increase in cyberattacks, President Sebastian Piñera signed a bill to allow the arm forces to protect the national critical infrastructure, including telecommunication and IT infrastructure. In July 2020, the Chilean Commission for the Financial Market (Chile’s SEC equivalent) published a regulation to establish cybersecurity and information security management procedures.

Resources

7th Congreso Latinoamericano Tecnologia y Negocios America Digital 2022, September 7-8, 2022: XVII Congreso Internacional de Tecnologia y Conocimiento Chile

Chilean Association of Information Technology Companies, ACTI

Chilean Government´s Computer Security Incident Response Team, CSIRT: Under the Chilean Ministry of Interior, CSIRT protects the free and reliable use of digital systems and platforms.

Chilean Registry of Identification and Civil Status: Maintains the records of births, marriages, divorces, and deaths in the country.

Financial Market Commission, CMF: The CMF publishes regulations for Information Security Management and Cybersecurity. This applies to banks, bank subsidiaries, bank line support companies and issuers and operators of payment cards.

Investigation Police, PDI, and Chilean Police (https://www.carabineros.cl/): Cybercrimes reporting

For additional information, please contact CS Chile Commercial Specialist Macarena Marin, macarena.marin@trade.gov.