Argentina: Passion and Innovation in a Troubled Economy

By:      Michael Hansen, Jacob Sloan, Anthony Pappalardo

After arriving in the busy city of Buenos Aires, it was clear that this experience would be one to remember. The planned company visits would be very insightful regarding the entrepreneurial atmosphere of the country. During our first visit to the US Embassy, a general overview the economic conditions was discussed. Specifically for entrepreneurs, certain conditions either were not as intense as we thought, but others were much more of a burden. For instance the actual process of starting a business is not all that difficult, however gaining access to funds is what tends to be a problem. Mortgages and leases are nonexistent, so very large capital investments are required to even get started. Also, once in business, governmental restrictions hinder many small businesses from exporting goods and importing supplies. These restrictions are not easy to get around and can discourage citizens from starting their own businesses. One example of the effects of these regulations was witnessed directly during our visit to an Argentine ranch where we met with a family of farmers. Not only is it difficult to export their crops to foreign buyers, but the government also takes a large portion of their profits in the form of a tax. Margins become thinner, and the necessity to produce more increases.

Although maintaining a business is far from easy in Argentina, the resilience of the entrepreneurs is evident. The economic conditions are extremely volatile and unpredictable. Both past and present economic crises have spurred drastic levels of inflation and have weakened the value of the peso, the distrusted national currency. Fluctuation in the business cycle happens much more often in Argentina than most other parts of the world, but Argentina has had a pattern of bouncing back from economic troubles in the region. The Argentine people have become somewhat accustomed to the unpredictability, so their underlying passion for what they do ultimately strengthens them and their businesses.

Our company visits in Buenos Aires gave us the chance to see firsthand how a multitude of Argentine business operated. From vast, multinational manufacturing corporations like Ball Corp to the MALBA, a privately-held art museum in the heart of downtown Buenos Aires, we not only covered a vast number of industries, but we experienced many different styles of business.

During our initial research of entrepreneurship and innovation in Argentina, we put some focus on Argentine technology startups, as they appeared to be one of the fastest growing entrepreneurial sectors in the region. One of these companies, Globant, is an example of an entrepreneurial success story. Beginning as a software development startup in Buenos Aires in 2003, Globant has since grown throughout Latin America, North America and Europe, employing over 3200 employees known as “Globers”. We had the chance to visit Globant’s Buenos Aires headquarters and to speak with Axel Abulafia, the company’s executive vice president. Although Mr. Abulafia did not touch much on Globant’s history, he focused heavily on the current state of the company, and the success they are having in many different parts of the technology industry. A significant milestone in Globant’s history came just a year ago, when Globant became the first Latin American technology company to be listed on the New York Stock Exchange. Mr. Abulafia connected the company’s IPO to its philosophy. When asked why Globant decided to become a publicly traded company, he responded, “We love challenges at Globant. We wanted to become the first.” Globant’s services are divided up into 12 studios ranging from cloud computing, to mobile application development, to big data analytics. Globant works today with a number of large corporations, including Electronic Arts, Southwest Airlines and LinkedIn, as well as a group of smaller startups, even including clients here in Colorado. Each client works with a “pod” of Globers who use their talents to build the best possible product. Globant places a lot of value on each individual team member as well. “Our most valuable asset is our people,” said Mr. Abulafia. “We are successful because of what comes in at 9am and leaves at 6pm.”

Along with the innovative products being built at Globant, a second company that we visited had the goal of creating more innovation as a whole. Areatres, located in the Palermo neighborhood of the city, is the first co-working space opened up in Latin America. We visited Areatres and met with Mr. Martin Frankel, an American expatriate who founded the company. Although co-working spaces have become common in the United States, especially Boulder (with options like Scribd, Spark Boulder, and The Hub), Mr. Frankel had the vision of bringing this type of workplace to Argentina. Areatres provides flexible working environments where which entrepreneurs and small businesses can work and collaborate with others. Areatres creates an energetic, interactive workspace that differs greatly from a traditional office. This concept provides a great opportunity for entrepreneurs and innovators in Argentina to get their ideas off of the ground. Not only is Areatres founded and run by an entrepreneur, but the company has the goal to accelerate entrepreneurial development as a whole in the community. These two company visits allowed us to experience entrepreneurship in a large-scale setting, but we also experienced it on a much smaller scale through street vendors and small business owners.

Buenos Aires features a number of open-air markets, packed full of stalls of street vendors. These people would spend their entire days in parks selling their beautiful goods. Passing by however, you would hardly know that they were driven to earn money. They spent much of their time talking to their neighbors or enjoying a cup of mate. When a customer came their way, they would not only show off their goods with pride, but they would also try to get to know the person. However, these people still had to support themselves. These entrepreneurs, with their small businesses, did their best to attract customers to their stands. When a customer was ready to buy, they would also ask for dollars before pesos to avoid Argentina’s high inflation. Most of the restaurants, shops, and vendors, constantly seemed to demand dollars as a means to protect their assets and save for the future. It appeared that this type of Argentine entrepreneur has trouble thriving in their economy, but they continue to do so because they love what they do.

One of the most passion driven businesses we visited during our stay in Buenos Aires was La Bioguia, an NGO. The NGO founder had quit his stable job in the United States because he felt like something was missing in his life.  He saw his calling in helping to foster sustainable businesses and moved to Argentina to focus on this new passion.  His organization works to create spaces where entrepreneurs can enjoy their work and develop practices that will help foster a better world.

During our visit with La Bioguia, we met with Rocío González, the founder of Greca, a company that uses the resin from old and misshapen buttons to create pieces of art. She decided she wanted to use her passion for art with her drive to help create a sustainable business. She does it not because she is driven by profits, but because she loves what she is doing. She has to deal with the inflation in Argentina by constantly adjusting her prices, but she is focused on the future of her business and the world rather than instant gratification.

Passion is everything in the Argentine culture. It is a driving force behind many entrepreneurs. In a troubled economy that is constantly changing drastically and with no certainty of success, the entrepreneurs there must love what they are doing to push onward. Entrepreneurs in Argentina must adapt quickly and often in order to keep their passions alive, which makes them some of the most highly sought after people in business. All along the way it is their passion that keeps them going. They will persevere through economic hardships and adapt because they are not willing to give up on their dreams and passions. They love what they do and it shows in their businesses.

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