Why be an Entrepreneur in Colombia?
Entrepreneur in Colombia – Colombia a member of the ‘CIVETS’, which are the next ‘layer’ of ‘BRIC’ countries, demonstrating its impressive economic recovery in the past decade. Great prospects are expected for Colombia, and here are ten reasons why you would be very happy having a business here.
Colombia has Low Living Costs
Every entrepreneur knows the importance of costs, and living costs are definitely one to look out for. Colombia has low living expenses, with an average apartment in the City Centre costing just $245 a month. This means that you could, in fact, rent three apartments in the City Centre for under the price of an apartment in the U.S. (Numbeo, 2013). Transport is also less of an issue, as you can grab a taxi at just $1.50 per 1 km journey (less than 1 mile).
The Early Mover Advantage
The early mover advantage is becoming increasingly important in business today. Colombia is still relatively undiscovered, as it was since only a decade ago that the economy has been on the rise; whereas, economies in countries such as the BRIC (Brazil, Russia, India and China) are considered ‘too little, too late.’ Gaining this advantage will yield great benefits for ambitious companies, such as customer loyalty and less competition.
Colombia’s Population is Relatively Young
Colombia has a grand population size of ‘over 45 million,’ the third largest in Latin America. The population is also quite young, with a median age of 28 (CIA World Factbook, 2013). Knowing how our young generation can’t let go of gadgets nowadays, the opportunities for technology-based businesses will be endless. The large population size also brings about an enormous labor force, which will grant entrepreneurs many opportunities for cheap skilled labor.
Colombia’s Economy is Fast Growing
As mentioned, Colombia is not just in the CIVETS for the ‘C’ in its name. Colombia has maintained an impressive GDP growth rate over the past few years, reaching an all-time high of 7.7 percent in March 2007 (Trading Economics, 2013). Thanks to a push from foreign investment and government policies (Financial Times, 2013), the economy is showing great promise. Increasing consumer income and demand, combined with a growing tertiary sector will open up many opportunities for international entrepreneurs in business.
For a country that has been on an economic roller coaster in the past, a stable inflation rate won’t hurt at all. Colombia manages a modest and steady inflation rate of 2.6 percent, giving investors a great level of reliability and encouragement. Colombia has managed to avoid hyperinflation, keeping rates below double digits since 1999 (Search Engine Watch, 2013).
Strong Trade Links
Over the past decade, Colombia has created several important trade links, with well-developed countries such as the U.S. and EU (Foreign Trade Information System, 2013). The free trade agreement with the U.S. has recently come into force, which will no doubt have a huge boost on the Colombian market. Just this year, Colombia signed an FTA with South Korea, a country soon to be one of the world’s wealthiest major economies (Citibank, 2012).
While it may take some time to come into effect, South Korea is expected to surpass the GDP per capita of even the U.S. by 2050, highlighting how promising the linkage sounds.
It would be an understatement to say that the current government has not assisted Colombia to get back on its feet after its long period of instability, violence and corruption. The country has had a phenomenal 90 percent drop in kidnappings, and a 46 percent fall in murders over the past decade (WSJ, 2011).
Things only continue to improve, as Colombian President Juan Manuel Santos was honored with the Shalom Prize for his ‘commitment to seeking peace in his country and worldwide’ (JTA, 2013). Falling crime statistics are a giant leap forward, ensuring that the country will only continue to improve in the future.
Colombia is one of 17 ‘mega-diverse’ countries of the world, owing part of its title to its abundance of commodities. Colombia has an incredible amount of non-renewable resources that have had a substantial impact on its economic rise. Colombia boasts the largest coal reserves, second largest oil and third largest natural gas reserves in Latin America (CIA Factbook, 2013). As the prices for important resources, such as coal, continue to rise thanks to manufacturing driven countries, such as China and India, Colombia will continue to become more important in the global economy.
Colombia is also known for its precious stones and metals production. Being the world’s leading producer of emeralds, second largest producer of gold in Latin America, and the lone producer of platinum in Latin America, the country is a treasure trove of exports (Cuoro Resources, 2013). Great trade links will tie in well with Colombia’s abundance of resources, building upon their GDP. From this, entrepreneurs can gain excellent trading opportunities with reduced costs, and it makes outsourcing a greatly worthwhile option.
Large Amount of Internet Users
The amount of Internet users in Colombia stands at 22.5 million (CIA World Factbook), larger than the whole population of Chile. As it stands, this is just half of the country’s population and is likely to increase due to rising innovation and infrastructure. The opportunities for online companies are endless here, as the shifts to online utilities and programs are likely to occur and create demand for many web-based businesses.
Unlike some nations in South America and Africa, Colombia is a developing nation and much of it’s population has access to the internet. Whereas an entrepreneur coming from Kenya or Ghana would probably have to use an international calling service to make calls to their loved ones and/or business contacts in their home country, most entrepreneurs from developed countries can use VOIP, Skype, Google phone, WhatsApp, etc. to make and receive international calls.
Easy To Do Business in Colombia
According to its ‘Doing Business’ profile by The World Bank, Colombia is the third easiest country in which to do business in Latin America (The World Bank, 2013). The country stands out with the best investment protection in Latin America and the sixth best in the world. The ease of starting a business continues to increase, and this should boost entrepreneur confidence in delving into Colombian markets.
Colombia’s rate of innovation is phenomenal and amazing business opportunities are due to follow. Medellin, once home to the infamous Pablo Escobar and his multi-billion dollar drug trafficking network, has now taken a fantastic turn for the best, being labeled as the most innovative city by Citigroup. This position puts them ahead of New York and Tel Aviv in innovation, some of the most popular global cities. The city has been cherished with government spending over the past few years, building public libraries, park and schools in the poor areas. New modes of transport have been built, such as the cable car system, capable of transporting people to different areas at great speeds (WSJ, 2013).
A country once overshadowed by conflict is now showing promise in many aspects. Colombia is a country that hope has greatly paid off for. Perhaps we can all learn from this optimism, entrepreneurs, in particular, in searching for international markets. Colombia is bountiful of business opportunities, which will continue to grow. Be sure not to miss out on Colombia when you are mapping out your business, and perhaps Colombia can share some of its newfound happiness with you.
Written by Jibola Babatunde. He is also a writer at Career Hack. Career Hack is a portal that helps Gen-Y destroy student loan debt, escape unemployment, and adapt to and thrive in the 21st century economy.
About the Medellin Buzz
The Medellin Buzz is a practice resource for English as a Foreign Language students in Medellin, Colombia. The Medellin Buzz is a great way to practice English because it is written in a way that is easy to understand. If you have questions feel free to write them in the comments below or contact me.