In line with global trends, IT development in Argentina has accelerated in recent years, improving connectivity, productivity and social inclusion. Since the introduction of the Promotion of the Software Industry Law (Ley de Promoción de la Industria del Software, LPIS) in 2004, Argentina has developed its software and information services. The sector adequately met the growing demand for computing services by devising an exportable offer that allowed a productive integration into the global market. As one of the most dynamic sectors of the economy, IT will be of high strategic importance in the government’s goals to develop the country, bridge the digital gap and reduce poverty.

Sector Makeup

According to figures from the Chamber of Informatics and Communications (Cámara de Informática y Comunicaciones de la República Argentina, CICOMRA), between 2012 and 2017 sector value grew by more than 250%, from AR35.4bn ($1.8bn) to AR92.3bn ($4.8bn). The software and IT services segment has been the most significant contributor, representing nearly two-thirds of sector output in 2017. Meanwhile, the Chamber of Software (Cámara de la Industria Argentina del Software, CESSI) reported that software and IT services was worth AR64.5bn ($3.3bn) in 2017, meaning it outpaced the greater sector, with its value more than tripling from AR18.8bn ($973m) in 2012.

Government Role

Despite the rapid development of IT infrastructure in recent years, the government still has an important role to play in helping to step up skills, attracting private investments, improving the quality of services and reducing prices. Moreover, public infrastructure and support programmes will be needed to address market failures and social inclusion goals. It will be of particular importance to roll out networks in rural areas, which have often been of limited interest to private operators. Upon assuming office in December 2015, President Mauricio Macri’s administration created the Ministry of Modernisation (Ministerio de Modernización, MoM), including a Secretariat of Information and Communication Technologies that launched plans to tackle the digital divide and enhance domestic IT infrastructure. The Federal Internet Plan (Plan Federal de Internet, PFI) was designed to increase access to quality internet throughout the country, thus reducing the disparity between urban centres and rural areas.

Inclusion Initiatives

The state-run telecoms company, Empresa Argentina de Soluciones Satelitales – commonly known as ARSAT – is carrying out works to connect 29m inhabitants living in more than 1300 towns, villages and small urban settlements to the federal fibre-optic network, the most extensive and largest-capacity fibre-optic network in the country. The government has set aside $290m for this initiative, with significant progress already having been made: in 2017 the PFI connected 10m people to the federal network.

Related to the PFI, the Access to Mobile Internet Programme was launched in 2016 to allow low-income individuals to access mobile IT services. MoM figures show that in early 2016, 41.7% of the 36m domestic mobile phones had no or limited mobile internet capabilities. To confront this, smartphones with 4G internet connections were sold at favourable rates with financing options allowing for 12-18 interest-free instalments. The first year of the programme saw the sale of 850,000 units.

The National Plan of Digital Inclusion (Plan Nacional de Inclusión Digital, PNID), launched in March 2017, has broader aims to promote equality in IT. The MoM is working with the Ministries of Social Development and Education to narrow the so-called digital gap: the disparity between demographic groups in the access to, use of and adaptation to new technologies. Active programmes of the PNID include digital literacy courses, workshops, and meetings to teach IT novices how to use the internet on computers, smartphones and tablets.


CICOMRA reports that 36m inhabitants, or more than 80% of the population, used either fixed-line or mobile internet in 2017. Government figures also show that the number of fixed-line internet connections increased by 8.6% in 2017.

As is true of telephony and many other indicators, internet connectivity varies widely between regions. In line with the heavy concentration of the population in the capital region, more than half of fixed-line broadband connections are in the Federal Capital District and the greater province of Buenos Aires, collectively holding 60.5% of the total in 2016. Có rdoba and Santa Fe were a distant third and fourth, with 9% and 8.5%, respectively, and the remaining 22% of internet connections were spread between the other 20 provinces. Penetration rates varied similarly: in the Federal Capital District the penetration level was the highest, with 51.6 connections per 100 inhabitants, but the national average was only 17.8, leaving potential for expansion.

In its Speedtest global ranking of 124 countries, internet analysis firm Ookla reported that Argentina’s average mobile download speed was 15.49 Mbps in June 2018, compared to a global average of 23.54 Mbps. This marked a 26.3% year-on-year (y-o-y) increase, though the country still placed 85th on the index. While the speeds of these connections lag behind somewhat in relative global terms, Argentina has the fifth-highest rate of 4G availability in the region, with 73.2% in late 2017, according to OpenSignal, an international mobile network measurement and reporting firm.

Broadband internet has shown similar growth and opportunities for expansion. With an average download speed of 19.2 Mbps in June 2018, Argentina placed 79th out of 133 countries on the Speedtest ranking, representing a 67.2% y-o-y increase.


Following the same trend as connectivity and internet speeds, software development has made significant strides in recent years. In April 2018 Aníbal Carmona, president of CESSI, told local press that 2017 brought a notable restoration in the software industry, with historically high exports, substantial job creation and $2.24bn of the $3.84bn in total sales taking place within the country. Furthermore, figures from the National Institute of Statistics and Censuses show that software exports amounted to $1.7bn, breaking the previous record of $1.53bn in 2012. “More than half (56.2%) of these exports went to North America, while 32.2% went to Latin and Central America, and 11.6% to other regions,” Gustavo Guaragna, executive committee member of CESSI, told OBG.

Legal Structure

Francisco Michref, corporate affairs and sustainability manager at domestic IT giant Globant, told OBG that software has been partly driven by the legal structure established in 2004. Law No. 25.856, the Declaration of Software Production as an Industrial Activity Act, and Law No. 25.922, the LPIS, created a framework that identified IT as one of the most dynamic and important drivers of the economy. The LPIS provided fiscal incentives to companies that dedicate 50% or more of their activities to software or IT services. To qualify for these tax benefits, businesses must spend at least 3% of their revenue on research and development or export a minimum of 8% of their sales. Similarly, a number of provinces and cities – including Buenos Aires, Córdoba, Entre Ríos, Mendoza and Santa Fe – adopted supplementary regional laws to attract more software enterprises.

Parque Patricios has become the leading technological area in the Federal Capital District, with more than 220 ICT and software companies by late 2016. The city authorities aim to attract even more international and domestic businesses – especially small and medium-sized enterprises – by offering tax-based incentives, preferential credit programmes, scholarships and educational centres. Institutionalised by Law No. 2972, these benefits are valid until 2029 for international entities and 2034 for domestic companies.


This favourable environment allowed Argentina to become home to four of the seven so-called unicorns in Latin America – startups worth more than $1bn. Mercado Libre, Globant, and OLX were founded in the country, and they have experienced continuous growth since their establishment. José Lino Barañao, minister of science, technology and productive innovation, told local media that the country’s chronically dysfunctional economy had encouraged local entrepreneurs find ways to dodge the rules, fostering a “rebel spirit” that has benefitted the IT sector. For example, Globant was founded in 2003, when Argentina was still recovering from a severe economic crisis, with starting capital of $5000. By 2018 it had become a key global player, with a presence in 18 countries and annual revenue of more than $400m.

The LPIS will expire in 2019, which could have negative implications for sector growth. CESSI predicts that the executive and legislative branches of government will work together to either create a similar law or extend the current one before it expires. In a statement to local press, Carmona noted that the LPIS is a key component of sector and broader economic goals – the authorities aim for this sector to provide 500,000 jobs and export at least $10bn of goods by 2030. Such legislation will also be crucial for the country to achieve greater social inclusion through a digital transformation, evolving to a future-orientated and knowledge-based economy.

Human Capital

In conversation with OBG, Carmona noted that the LPIS has supported the significant growth of IT sector employment, which increased from 15,000 jobs in 2004 to more than 107,000 in 2017. “This increase of workers has been possible due to the excellent network of universities throughout the country,” Michref told OBG. “There are several high-quality universities with a substantial number of talented graduates – not only in Buenos Aires, but also in Resistencia, Tandil and Tucumán, for example – which supports skills development, and thus expansion of the IT sector.”

The Observatory of the Knowledge Economy released a report in October 2017 showing the geographical distribution of students and graduates in careers related to knowledge-based services. It found that in 2015 – the most-recent year for which figures were available – 27% were in the Federal Capital District, 24.4% in the greater province of Buenos Aires, followed by Córdoba and Santa Fe (8.7% each), Tucumán (4.1%) and Mendoza (3.5%).

Despite the large number of IT graduates, a persistent skills mismatch constrains the sector’s potential. Michref told OBG that in 2017 there were around 5000 vacant positions in IT. Similarly, CESSI held a survey of the largest companies in the country, finding that, given qualified applicants, these firms would increase their personnel by 13.6% – translating to 13,100 additional positions – in 2018.

Human capital necessarily grows at a slower rate than sector output. To tackle this issue, Carmona told OBG that the government launched the Plan 111,000: an initiative to educate 100,000 programmers, 10,000 professionals and 1000 entrepreneurs by 2020 to help bridge the skills gap. The plan provides free, one-year courses and training, with certification granted upon completion that is recognised by local IT companies. Moreover, the Ministry of Work, Employment and Social Security is working with CESSI and benchmark companies maintain Empleartec, a programme offering free software and technology education. These initiatives are set to support the longer-term aim to increase the number of IT employees to 500,000 by 2030.


Argentina is set to maintain its upward trajectory regarding IT enhancement. Fragile regulations and infrastructure are among the largest obstacles to growth, though there have been notable steps to address these shortfalls in recent years. The government has prioritised bridging the digital gap, as evidenced by the several plans it launched to boost IT infrastructure, which are expected to yield tangible results in the coming years.

Although average internet usage rates are high, there are persistent stark provincial discrepancies in terms of accessibility and quality. Meanwhile, the biggest challenge facing the software industry is the disparity between job opportunities and the availability of skilled workers. However, government initiatives to educate IT specialists are set to address this skills mismatch in the coming years. As the LPIS will expire in 2019, the continued expansion of the sector will depend on either an extension of the law or creation of a similar piece of legislation. Such a regulation would also serve to support the creation of a domestic software and IT services centre.