The growth of the Uruguayan knowledge economy exceeds the world average, reaching 53.6% in 2022

The growth of the Uruguayan knowledge economy exceeds the world average, reaching 53.6% in 2022

The knowledge economy in Uruguay had a great year during 2022, and reached a growth of 53.6%. While this number is already significant on its own, it is even more impressive when compared to the regional and global average. In Latin America, growth was 19.3% on average, while in the world it was only 5.4%.

It is no secret that the Uruguayan government is strongly committed to the knowledge economy and the information sector. information technology (IT) for the development of the country in the new era of products and services. Even so, the important growth experienced by the item during the past year does not go unnoticed, reaching 53.6%, well above the world average which was a long way from reaching double digits.

The data is from Argencon, the Argentine body that brings together service providers from all verticals of the knowledge economy in the neighboring country, which presented its latest survey on the area. And Uruguay was a topic of conversation during the event.

This is because, in Argentina, the “brain drain” worries that the country is suffering, with professionals who choose Uruguay as a place of residence and work, mostly in the IT sector. For the executive director of the entity, Louis Galeazzi, it is about “resources that are shipped in Uruguay but are Argentine, it is a flight of Argentine talent to Uruguay“.

For the official, the great growth of exports from the Uruguayan knowledge economy is leveraged on the Argentine talent that increasingly crosses “the pond”. According to Galeazzi, the leakage not only occurs in freelance workers, but also there is a strategy on the part of Uruguaywhich saw an opportunity for growth in the IT sector and took advantage of it, unlike Argentina.

Record exports for the IT sector and the software industry

The growth of the Uruguayan knowledge economy does not come out of nowhere: in 2022, exports of the IT sector grew by 20% and represented a quarter of the services provided abroad, with sales that reached 1,172 million dollars, according to the figures of Uruguay XXI in its Services Exports Report 2022.

Of this total, 959 million were from the IT & ITO software sector, while 213 million dollars were contributed by telecommunications.

Likewise, as of September 2022, exports of the IT industry had already registered an increase of 108% year-on-year in that period, becoming the largest item within global services. That is, they more than doubled, according to the data extracted from the Central Bank of Uruguay (BCU).

For the Uruguayan Chamber of Information Technologies (CUTI)Meanwhile, foreign sales of the software and IT sector totaled 1,006 million dollars, according to the results of its Annual Survey. The figure implied an increase of 12% compared to the previous year and constitutes a historical record

The bet on talent

Parallel to its growth and Argentina’s concern about brain drain, Uruguay continues to advancing in legislative matters to establish an attractive regulatory framework for workers in the IT sector to choose the country both to work and to reside.

In this sense, Parliament is discussing a talent attraction law aimed at Uruguayans and foreigners living outside the country, and which contemplates a series of tax benefits that lower the cost of living in the national territory and facilitate settlement.

In this way, for example, technicians and professionals who move to Uruguay with work contracts in a dependency relationship with companies with regular and permanent activity may choose, in relation to work income, to pay tax on the Non-Resident Income Tax (IRNR) and not be included in the current pension system.

Another initiative promoted by the government to strengthen the growth of the knowledge economy is the establishment of a temporary residence permit for between 6 and 12 months designed for digital nomads.

It should be noted that in Uruguay the export of technological services is exempt from taxes. The strategy is, according to Uruguay XXI, that these qualified workers settle in the country to work abroad and, after learning about the local quality of life, decide to settle permanently.

Source: Ambito

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