Empowering Youth Employment through Nearshoring in Latin America

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Students Conalep Atizapan

(En Español)

Latin America has seen a surge in employment opportunities in the Information and Communication Technology (ICT) sector due to nearshoring—the practice of outsourcing business processes to nearby countries. Global technology companies are turning to Latin America as a solution to labor shortages and to benefit from proximity and shared time zones. This shift has not only attracted major players to hire talent from countries like Guatemala to the Southern Cone but also holds significant promise for young people seeking employment opportunities in the region.

The Emergence of Nearshoring in Latin America

Nearshoring has gained substantial momentum in Latin America due to several factors. According to the article "Nearshoring Push Fuels Tech Job Demand in Latin America" from Bloomberg (2023), the labor shortages experienced in the United States due to the pandemic have pushed companies to seek alternative talent sources in Latin America to fill their workforce gaps. Additionally, hiring in Latin America presents a financially attractive option for companies, offering cost-effective alternatives compared to hiring workers from the US or Asia. Furthermore, the region boasts a pool of experienced professionals who were previously laid off from startups, further enriching the talent pool available for recruitment.

Challenges and Opportunities for Latin American Youth

Nearshoring has provided global companies with the opportunity to recruit and employ young individuals from Latin America, particularly within the ICT sector. The advantages of geographical proximity and shared time zones have made remote work viable, thereby expanding employment prospects for the region's youth. This is significant as young people in Latin America face high rates of unemployment and often resort to informal work. According to the International Labour Organization (ILO), the projected youth unemployment rate for Latin America in 2022 was 20.5%, with even higher rates anticipated for women.

Latin American youth encounter various challenges that hinder their development and access to opportunities. Limited access to quality education, healthcare, and a mismatch between formal education and the skills demanded by employers are major barriers for young people seeking to enter the job market. Most available jobs for youth are informal, characterized by low wages, precarious conditions, and a lack of social protection. The absence of decent employment opportunities and limited prospects for economic growth perpetuate the cycle of poverty and exclusion.

To address these challenges, it is crucial to prioritize programs and initiatives that empower young people and enhance their employability. Organizations like the International Youth Foundation (IYF) have played a pivotal role in bridging the skills gap and promoting social and economic inclusion among young individuals in Latin America and the Caribbean.

Through technical training and life skills development, 15 IYF programs in Latin America, including initiatives such as Google Colombia, Google LAC, and Networking Mexico, have equipped over 35,500 young people with the necessary technology skills. Moreover,  79% have increased their knowledge in a variety of ICT topics, such as cyber security, programming or IT support, and fostered gender equality. Notably, a significant percentage of beneficiaries (51%) are women and young people from vulnerable groups.

A Promising Future

The growth of employment opportunities in the ICT sector through nearshoring presents promising prospects for the employability of Latin American youth. With the support of training and empowerment programs, young individuals are acquiring the necessary skills to access these opportunities and contribute to the region's economic and technological development. It is essential to foster collaboration between the public and private sectors, as well as nonprofit organizations, to further strengthen the employability of young people and ensure a prosperous future for them in the ICT industry in Latin America.

Nearshoring has opened up significant employment opportunities in the expanding ICT sector in Latin America, transforming the employment landscape for young people in the region. By leveraging the advantages of nearshoring, Latin American youth can overcome unemployment and poverty, ultimately contributing to the region's overall growth and prosperity in the ICT industry.