Overview

The Information Technology (IT) sector is one of Chile’s most promising sectors, with the highest growth potential in the region. According to IDC, the total market in 2021 was $8.7 billion, a 35 percent increase from 2020, and is expected to grow five percent in 2022. This growth is due to the accelerated transition towards digitalization during the COVID-19 pandemic, pension fund withdrawals, and government fiscal stimulus. In 2021, the IT market accounted for 2.7 percent of Chile’s GDP.

Chile has the highest penetration of mobile connections in the region at 137 percent or 26.32 million cellular mobile connections. Currently, 3G and 4G connections dominate the market, however, Chile launched the region’s first 5G network in December 2021, a $3.5 billion investment that will create new business opportunities in the sector. Internet penetration in Chile, as a percentage of the total population, is the highest in Latin America at 92 percent with 17.7 million permanent users.

IDC estimates that there are 8,000 Chilean IT companies. However, many are very small and focused on software development and B2B services. Between 400 and 500 companies are medium to large size companies. In a survey of IT decision-makers at 424 Chilean companies with 100 or more employees, IDC reported that 43 percent expect the IT spending at their company to increase, 51 percent said that it will stay the same, and 6 percent believe it will decrease in 2022. The industrial sectors with the highest IT investment are the retail, manufacturing, and banking and financial services sector, which is one of the largest and most consistent IT investors.

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.

Chilean IT associations, Asociación Chilena de Empresas de Tecnología de Información (ACTI), Chiletec, and Asociación de la Industria Eléctrica- Electrónica (AIE), launched Tecnología Chilena to promote Chilean technology and Chile as a leader in technology development and production. The initiative’s website showcases successful Chilean technology to demonstrate the benefits of the Chilean technology sector.

One challenge to IT sector growth is the lack of specialized professionals. According to data from Fundación Chile, there is a 25 percent deficit per year of IT professionals, and 95 percent of them are employed. In Chile, there is a need for an estimated 5,000 IT professionals and technicians per year. A survey by SENCE and Pulso Digital showed that 70 percent of companies planned to hire IT professionals in the short term.

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.

*Total market size is an estimate that includes hardware, software, and IT professional services
Units: US$ Million
Source: Global Trade Atlas and IDC

Leading Sub-Sectors

• Cloud Computing and Internet of Things (IoT):  Chilean companies are transitioning to cloud services. The public sector will account for 17 percent of total IT business spending in 2022.

• Software and software services: This segment experienced the fastest growth, reinforced by strong government support. IDC estimates that the software segment will grow by 8.5 percent in software and IT services will grow by 4.9 percent.
• Cybersecurity: During 2021, Chile had approximately 9.4 million attempted cyberattacks, driving growth for cybersecurity software and services.

• Artificial Intelligence: The Chilean Ministry of Science, Technology, Knowledge, and Innovation released an Artificial Intelligence National Policy, 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.

Opportunities

• Big Data/Analytics: Financial services, mining, and industrial production are expected to be the primary users of big data and analytics. Services that specialize in the implementation of flexible, scalable, and modern data architectures, as well as data management models are in high demand.

• 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. Personal data security is a key challenge, and the Chilean government will need to update security policies and procedures. Telecom operators are looking for new revenue streams to help offset the $3.5 billion investment to deploy nationwide 5G service.

• Cybersecurity: With an internet penetration rate of 92 percent, Chile quadrupled the number of cyberattacks attempted in 2021 reaching 9.4 billion. 5G brings new vulnerabilities and risks.in

• Artificial Intelligence: AI is gaining an important place in organizations due to its ability to utilize machine-learning to automate tasks, anticipate trends, and reduce time implementing solutions. IDC estimates that the public sector will invest $26 million in AI technologies.

• Metaverse: The convergence of the physical and virtual worlds will change the behavior of users and companies. This will create opportunities for companies to create customized and interactive experiences for consumers, especially in the banking and retail industries. However, Chile lacks regulations applicable to metaverse activities.

Trade Shows

• 7th Congreso Latinoamericano Tecnologia y Negocios America Digital 2022, September 7-8, 2022
• Cybersec 2022, October 6-7, 2022

Resources

• Asociación Chilena de Empresas de Tecnología de Información (Chilean Association of Information Technology Companies, ACTI)

• Equipo 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.

• Servicio de Registro Civil e Identificación (Chilean Registry of Identification and Civil Status): Maintains the records of births, marriages, divorces, and deaths in the country.

• 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 reporting.

• La Alianza Chilena de Ciberseguridad (Chilean Cybersecurity Alliance, ACC)

For additional information, please contact U.S. Commercial Service