What does Chile mean to the Internet? What does the Internet mean to Chile?
As academic programs in Chile respond to the Internet surge, the Santiago Chamber of Commerce looks to make Chile Latin America's e-center.
by: Veronica Endo
Chile has thrown its hat in the Internet ring. In doing so, it hopes to establish its role as a Latin American e-commerce hub. The markets exist. The training exists. The only problem: lack of venture funding.
What makes Chile such a strong market? Chileans will buy $45 million on the net in year 2000. In its study The Digital Economy in Chile, the Santiago Chamber of Commerce reveals a progressive increase in on-line transactions. According to the study, in 1999 $13 million was spent on on-line transactions; that number will increase explosively to $45 million in year 2000, and $455 million by the year 2004. In Chile, an increase in websites and an increase in credit card use have influenced volume of on-line business transactions. For example, between 1999 and March 2000, the number of companies accepting credit cards increased to 86%.
Company internet access is also becoming a standard for Chilean businesses. Currently, around 42% of Chilean enterprises have Internet access. As the size of the companies grow, their Internet availability also grows. At present, 64% of small Chilean companies use the internet, as do 81% of medium companies and 93% of large enterprises. In fact, an estimated 30,000 firms will make electronic transactions in the year 2004, marking a 27% increase in Chile's total number firms. As a result, now is the precise moment for young entrepreneurs to look toward Chile's electronic market.
In keeping focused on the e-future, the Business Management program at the Catholic University of Chile recently received international accreditation from the AACSB (International Association for Management Education). Harvard, Yale, Columbia, Cornell as well as the Universities of Chicago and Pennsylvania created the AACSB, a non-governmental institution. According to institution director Matko Koljatic, the Chilean university is the first business program in South America to receive this valued recognition. Koljatic noted that Chile has become an popular educational center for South American business students. In fact, 40% of the total MBA alumni do not come from Chile.
One reason for Chile's slow growth is that it competes on a regional basis with other South American countries. The number of non-Chileans in the Catholic University program indicates why Chileans have a hard time securing funding. Chile comprises around a 3% of Latin America, and a company would also need to invest in Brazil, Argentina and Mexico, which are much bigger countries, in order to succeed. Until now, the only Chilean companies making money on the Internet are ones selling equipment or media and advertising.
Even so, Chile offers a fertile market to potential investors. Koljatic notes that there are already young entrepreneurs doing interesting things on the web. He points to the most developed business-to-business project in Latin America, Mercantil.com, a Chilean company. But easy financing mechanisms that allow young people with good ideas to start projects simply don't exist yet in Chile. As a result, Chilean entrepreneurs must go in the American market to obtain resources. Koljatic wonders why there is not more international web coverage on Chilean companies. While Chile might not have multi-national car, insurance or banking industries, it is an industry leader in copper, wine and cellulose.
