Outsourcing of Creative Work is to Argentina what Outsourcing of Programming is to India and Outsourcing of Production is to China

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Creative Outsourcing is becoming more and more common place for companies and clients in the developed world. The Internet, email, and lately collaborative applications like Skype, ClockingIT, Basecamp, and WebEx have made it easier to outsource work that can be sent digitally. Creative Work has long been considered difficult to outsource since it needed close contact between client & provider and is often culture specific. Creative work is now the new outsourcing threshold. Where can you best outsource Creative Work? To India where the majority of programming is going, or to China, the manufacturing giant? What about Eastern Europe or Mexico? Finally all water flows to the lowest point. The lowest point is defined as the place where we find the best price and quality relationship. We have reason to believe that Argentina will become the global center for Creative Outsourcing. The abundance of creative talent, highly educated specialists, Western culture and low cost make Argentina ideal for the outsourcing of Web Design, Graphic Design, Flash, 3D, Games and Video.

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Exporting Argentine creativity will enforce our commitment to create the best content for our audience

What makes Argentina so well suited for creative outsourcing?

1. Economic setting

Companies in Argentina only started to export services after the big depreciation of its currency at the end of 2001. Let me explain why. Up until the late 1980s telecoms companies were monopolies or state owned and famous for their inefficiency. It took the average Argentinean citizen up to 15 years to get a telephone land line connection. Then, in 1989 President Menem came to power. He did two things that eventually turned Argentina into an export country for services. First, he freed up the telecoms market. The state owned companies were sold to European buyers. Companies like Telecom from Italy and Telefonica from Spain invested heavily in a modern telecoms infrastructure. They placed fiber optic lines throughout Buenos Aires and connected the major urban centers. Within a few years people had easy access to modern telephone systems. This alone, however, did not turn Argentina into an outsourcing power house. Menem's second priority was to curb the country's endemic inflation. The Argentine government attached the value of the Argentine Peso to the US Dollar in equity of 1 Peso to 1 Dollar. This meant that, by law, the Peso could not decrease in value more than the Dollar. Hyperinflation came to an immediate standstill but prices kept rising, albeit at a slower pace. Soon a Coca Cola cost more in Buenos Aires than in New York. Argentina started to import more and more and its local industry began to perish. Argentina could not compete with the modern and highly capital intensive industries of Western Europe and the United States. To matters worse, Menem was unable to balance the books. The government spent more money than it received. The holes were filled with loans which resulted in an ever growing debt burden. Finally, at the end of 2001 the system collapsed. The country defaulted on its loans and its currency depreciated 3 to 1 to the dollar. This left Argentina with a modern telecom infrastructure, a competitive telecom market, highly skilled labor and wages that could be compared to India, but no one to benefit from these enormous opportunities. The first players to jump into the market were international call center giants like Teleperfomance and Teletec. Soon after, companies that included services like programming and web development were investing time and resources into Argentina. Everything that could be sold digitally prospered. You might wonder where this new situation will lead. What is the comparative advantage of Argentina over the rest of the world? While browsing local web pages and observing the quality of local television ads you will find that Argentina has an excellent price and quality for creative services. Creativity or Western culture cannot be taught in a university. It is something deeply ingrained into a country's genes. Where India and China can beat the world in programming and manufacturing, Argentina can be best at providing high quality creative services with a Western style. Let's look a bit more into the elements that make Argentina well suited to deliver creative services.

2. Abundance of Creative talent

When hiring creative talent in Argentina you will be surprised at the number and quality of people that apply for a creative position. The abundance of highly qualified people that look for work as a web designer, graphic designer, 3D specialist, animator and video developer is just stunning. Upon a closer look to the existing creative outsourcing industry you will find a plethora of very professional companies with great design capacity that you will not see in other countries like The United States or Europe. Digging deeper, you will find that Argentina has always had the highest cultural standing in South America. Buenos Aires is the center of South America for cabaret, cinema and TV productions. Recently MTV decided to move their regional head quarters to Buenos Aires. As one can guess, MTV is one of the most creative companies worldwide. MTV Networks' CEO Robert Bakish commented that "Exporting Argentine creativity will enforce our commitment to create the best content for our audience".

3. Highly Educated Population

Historically, Argentina has the best educational system in South America. There is great availability of highly skilled professionals, especially in the field of IT, as this sector has developed significantly in Argentina over the past few years. Argentineans have always been very successful abroad and are well-known for their professionalism.

4. Western Style favors Argentina

98% of Argentineans are of European descent with the majority being a mix between Italians and Spanish immigrants. Argentina has always looked at Europe as their point of reference, and this resulted in Buenos Aires claiming the title of the "Paris of South America". Visitors are unanimously enthusiastic about this cosmopolitan city with its architecture, night life, cultural activity, tango, and fashion industry with its creative flair and international style.

5. Wage prices can be compared to India

Since the end of 2001 the country has recovered most of the jobs that were lost and some of its purchasing power. Salaries for highly qualified creative people still run at around 700 USD per month. Due to the abundance of people aspiring to work in the creative sector the wages remain stable. Exceptional people accept relatively low wages just to be able to work and gain experience in the industry. Furthermore, Buenos Aires is one of the cheapest capitals in the world. Salary costs in Argentina are 60% lower than the average salary costs in Eastern Europe, which are 15% higher than the average wages in India.

6. Creative Outsourcing Market booming

Argentina has seen an enormous boom in its outsourcing industry since 2001. Companies like Connaxis (http://www.creative-outsourcing.com); Latin3 (www .latin3.com), WebAr (www .webar.com), WUNDERMAN (www .wundermandigital.com.ar), crossmedia (www .crossmedia.com), Boogie Man Media (www .boogiemanmedia.com), XAGA (www .XAGA.com), 451 (www .451.com), Bridger Conway (www .bridgerconwayinteractive.com), Group94 (www .group94.com), and Gameloft (www .gameloft.com) have experienced significant exponential growth over the past 6 years. Lately, companies like MTV made Buenos Aires its local Latin American hub to produce all creative work for the Latin American Market. Connaxis is the first company to recognize Creative Outsourcing as one of the countries greatest strategic long term opportunities. Connaxis CEO, Peter van Grinsven, commented that "The strength of Argentina lies in its abundance of creative talent, highly educated specialists, Western culture and low cost". Latin3 is the premier provider of "Exponential Marketing" services in Latin America and the U.S. Hispanic markets. This company is a creative outsourcing giant, employing 120 professionals and developing creative work for companies like Cisco Latin America, Dell Latin America, Lexicon, Microsoft Latin America, Nextel International, Pepsi Latin America and many more. Gameloft has been developing mobile games in Argentina since 2001 and expanded its staff to over 400 professionals in 2008. Recently, MTV has announced its plan to create 200 new full time work positions. MTV Buenos Aires will become the creative center of Latin America for MTV, Vh1 and Nickelodeon, with the responsibility of creating a portion of all the creative work done for cinema.

The success of these companies is only the beginning. It is a story in the making. Argentina is transforming itself to be the creative outsourcing center of the world. It is already a success story for the first mover companies described in this article. These companies are experiencing exponential growth and worldwide recognition for creative skills delivered to their international clients. It is not a story of selling web design but one of 'creativity'; it is something more abstract that originates from deep within a country's culture and history. The mix of citizens with western European dissent, the particular history, and the recent introduction of email and the Internet is generating a new industry of Creative Outsourcing in Argentina.

Argentina is about to become the Creative Outsourcing Workshop of the world.

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Peter van Grinsven
Connaxis
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Rebecca Deering
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