Overview
The Information Technology (IT) sector is one of Chile’s most promising sectors with the highest growth potential in the region. According to Technavio, the IT market is expected to grow by $3.9 billion from 2022-2027, at a compound annual growth rate (CAGR) of 8.55 percent. This growth is influenced by integration of artificial intelligence (AI) by Chilean companies, the rise of digital information, and the IT services segment that includes education and training, consulting, development and integration, and hardware and software support. According to International Data Corporation (IDC), IT spending was $8.2 billion in Chile in 2022 and it is expected to grow 5.5 percent by 2024.
Chile has the highest penetration of mobile connections in the region at 147 percent or 28.84 million cellular mobile connections. The transition to 5G is still increasing due to the expanding to new networks and increasing the demand for high-speed connectivity services. Internet penetration in Chile, as a percentage of the total population, is the highest in Latin America at 91 percent with 17.7 million permanent users.
In May 2022, the Chilean Government presented Chile Digital 2035, a new strategy focused on reducing digital inequality and guiding the digital transformation of the country by promoting digital rights, infrastructure development, cybersecurity, and digitalization of the public sector. As of 2022, 86 percent of public services are digitalized with the goal of achieving 95 percent by 2025 and 100 percent by 2035.
The big challenge to the IT sector continues to be the lack of specialized professionals. According to the National Training and Employment Service (SENCE), by mid-2022 in Chile, there was an annual deficit of about 6,000 IT professionals. According to a study carried out by Fundacion Pais Digital and Accenture, Chile could miss out on nearly $13 billion in growth by 2030 if the Chilean population is not prepared for the market skills needed in the sector. On March 15, 2022, the Cybersecurity and Critical Infrastructure bill was introduced in the Chilean Senate. The comprehensive cybersecurity bill aims to improve security structures and measures in public and private institutions. The bill outlines regulatory standards to prevent cyberattacks and protect public and private institutions targeted by cyberattacks. The bill also aims to increase cooperation between different government agencies. In October 2022, the Chilean Senate approved the bill that is now being discussed in the Chilean Chamber of Deputies.
Leading Sub-Sectors
Cloud Computing and Internet of Things (IoT): Cloud services have made it possible to accelerate digital transformation in Chile and is an most important ally of companies, to have continuous mobility in their data flow and increase productivity. According to IDC, 53 percent of companies in Chile will increase their budget in cloud migration in 2023.Software and software services: According to IDC, this segment will have an annual growth of 9.4 percent, reaching a total value of $1.4 billion in 2023.Cybersecurity: According to Fortinet, Chile had approximately 14 million attempted cyberattack in 2022. Between January and June 2023, 37,000 ransomware attacks were recorded, an increase of 208 percent from the same period last year.Artificial Intelligence: The Chilean Ministry of Science, Technology, Knowledge, and Innovation released an Artificial Intelligence National Policy in 2021, which outlines the strategic goals for the next ten years. The policy has three pillars: fostering necessary elements for the development of AI, promoting the development and adoption of AI, and ethics and security. This policy has been updated by the Ministry and will be presented during the Artificial Intelligence Summit, to be held in Chile on October 23-24, 2023.
Opportunities
Digital Transformation: In December 2022, the Chilean government announced a 64 percent increase in the budget allocated to the digitalization of the State in 2023. This translates into an investment of almost $10 million for the optimization of services and functions of government offices. Full digital transformation is expected to be achieved by 2027.Big Data/Analytics: Big data is already an objective to be implemented in Chilean companies. Achieving high levels of data analysis to improve decisions that affect the results of both private and public companies will be a reality for this market.5G Deployment: As 5G adoption grows, demand for new IoT solutions is expected to increase and require the construction and implementation of new networks and systems. According to the Undersecretary of Telecommunications (SUBTEL), 5G coverage should reach 90 percent of the population by 2025.Cybersecurity: In terms of cybersecurity, Chile has a level of maturity that stands out in the region. According to the IDC Cybersecurity Forum, the cybersecurity market in Chile is expected to grow at a CAGR of 10.5 percent for the 2022-2024 period. As the cybersecurity market evolves, companies invest more and are more aware of its relevance. At the same time, 5G deployment and adoption brings new vulnerabilities and risks.Artificial Intelligence: According to the National Center for Artificial Intelligence, Chile leads the development of AI. Accenture has noted that 70 percent of local companies already use AI tools to improve their processes.Data Centers: The rise of digitalization and online commerce have driven a strong increase in the development of datacenters, where Chile is positioned as the main hub of Latin America. According to Colliers, in the next three years it is estimated that the area occupied by datacenters will increase by 400 percent.
Trade Shows
Summit Pais Digital, October 3-4, 20239th Congreso Latinoamerican Tecnología y Negocios America Digital 2024, April 3-4, 2024
Resources
Asociación Chileana de Empresas de Tecnología de Información (Chilean Association of Information Technology Companies, ACTI)International Data Corporation (IDC): Global provider of market intelligence for the IT, telecommunications, and consumer technology marketsStatista: Online platform specialized in data gathering and visualizationEquipo de Respuesta ante Incidentes de Seguridad Informática (Computer Security Incident Response Team, CSIRT): Under the Chilean Ministry of Interior, CSIRT protects the free and reliable use of digital systems and platforms.La Comisión del Mercado Financiero (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.Policía de Investigaciones (Investigation Police, PDI) and the Carabineros (Chilean Police): Cybercrimes reportingLa Alianza Chilean de Ciberseguridad (Chilean Cybersecurity Alliance, ACC)
For additional information, please contact U.S. Commercial Service Chile Commercial Specialist Macarena Marin.
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