Thursday, July 31, 2008

3 million entrepreneur relocators?

US News & World Report published an interesting article, "A Growing Trend of Leaving America" stating that over 3 million Americans move overseas every year.

They also highlight that "1.6 million U.S. households had already determined to relocate abroad; an additional 1.8 million households were seriously considering such a move, while 7.7 million more were "somewhat seriously" contemplating it."

The article focuses specifically on the fact that many now move and become entrepreneurs.

Some quotes from the article struck a chord with me. For example when talking about his move to Panama, one young entrepreneur says an attraction "is the chance to get into some kind of market first.", "more room for error." and the opportunity to "make mistakes without being put under." Another says, "I couldn't have opened this type of business in the States, here there's no one competing against me."

I think those reasons hit home for many of us who have already taken the plunge for whatever reason. Thinking about my own business, those same reasons make my list. Now with the US economy going into recession and prices of gas and food rising, my guess is that more and more of those "seriously considering" a move abroad will pull the trigger.

My prediction is that Central and South America along with Eastern Europe will draw the most. In general, the cost of living is relatively low, the economies are growing and the cultural divide is more manageable than China, India or SE Asia. As for South America, I think Buenos Aires will lead the way. Brazil is by far the economic elephant down here, but the strong real and the reputation for crime in Sao Paulo and Rio de Janeiro will keep many looking for alternatives. Santiago, Chile, may be a contender... they have a business friendly environment and are seen as a shining example of what can be accomplished when the government doesn't trip over itself. However, I don't think the dollar takes you nearly as far as in BA though that advantage may not last too much longer.

Do you think Buenos Aires will see an influx of entrepreneur relocators? What would be your reasons for, or for not, picking Buenos Aires?


Robert Evans said...

Here's my take as a technologist.

Mega Cities are the future and BA has some of the fundamentals in place that allow for a scalable business. For example, consider wireless based services and the numbers of people that you can reach.

Real estate is affordable when compared to comparable cities and it's possible to keep your burn rate low, assuming you are in a line of business that doesn't require employees or much capital equipment.

In short, I think BA is a great place to start a business as long as ones not investing *in* Argentina.

The government and culture is not business friendly. Electronic equipment is heavily taxed and internet bandwidth is poor.

Jonathan said...

Hi Rob,

Good points. I'm not sure how it is in the technology area..but in general, for the level of education of the population, my thought is the cost of labor is lower than in other comparable cities.

Of course one has to take into account the added complexities (read headaches) that Argentina is not especially business friendly. Which to me is a shame.
The whole part of helping sustain or contribute to the local economy is lost. While we keep our burn rate low..we become parasitic.

Or is that being too harsh?

Meredith said...

I arrive in BA in a month and I picked it b/c its arguable the most cosmopolitan city with rapid access to the countryside when a dose of that is needed. But it was primarily for its accessibility to top quality horses/training and overall cost of living. Of course I see that changing with the declining dollar.
I am an an entrepreneur with several online businesses that I market almost exclusively online to the US market and around the world. So all I need is internet and phone. So there are other ways to get here without depending on proper navigation of the the Argentina beuracracy for success and having an LLC back home paying you the "right" amount monthly gets you on track for your DNI. I think if more folks knew these opportunities exist thanks to technology more would leaving. So, business friendly or not can be factored out if one chooses wisely/