The CEO of the software firm explains the impact of the deregulation of the Argentine economy on startups and the potential that AI has in business operations.
Anyone who says that Latin America only provides raw materials or some manufactured goods is wrong. The region also contributes human capital that has led to the birth and success of unicorn companies, those that reach a valuation of more than US$ 1,000 million without being listed on the stock exchange, which today succeed in developed nations. Globant, a software development firm from Argentina, is a clear example.
Founded in Argentina in 2003, it now has 30,000 employees, a presence in more than 30 countries, and a portfolio of notable clients such as Google and Disney. It was also the first technology company in Latin America to be listed on the New York Stock Exchange in 2014.
In this context, Martín Migoya, CEO of Globant , gave a conference on November 15th within the framework of the APEC CEO Summit 2024, organized in Lima, Peru. The focus was on the development of unicorn companies in emerging markets and Migoya highlighted the entrepreneurial nature that Latin America has adopted in the last two decades.
“Although in many countries we have had political ups and downs, in more than one case, central banks have acted consistently and have created economies that have been growing and prospering in almost all countries. When those macroeconomic conditions are not present, then, it is much more difficult for entrepreneurs to generate value and create these types of unicorns or startups ,” Migoya said. For this reason, he is a supporter of the adjustment and deregulation policies promoted by the president of Argentina, Javier Milei.
Becoming an entrepreneur was not an easy task, however. The memory of the hyperinflation that Argentina experienced in the late 1980s, which caused the bankruptcy of his father's companies, weighed heavily on him. Although his father managed to overcome this by getting a new job, by the time Migoya began his career as an engineer at the state oil company YPF, he used to think that entrepreneurship was a difficult task.
“But when I started to observe what was happening with entrepreneurs like Steve Jobs, Bill Gates or even more local businessmen like Marcos Galperin and all the impact that organizations like Endeavor generated, I realized that my father was right: creating companies is the true way to transform an economy. However, what was wrong was the unstable environment in which he had started his business,” Migoya explains.
AN “ECOSYSTEM” IN FAVOR OF STARTUPS
Under this motto, he and his partners decided to found Globant, targeting international markets that were more stable than the volatile Argentina. And when asked what his country needed for entrepreneurs to prosper, Migoya replied that they should “keep the goalposts still.” In other words, that the rules of the game be clear and consistent in their intentions.
The executive is thus optimistic about Milei's public policies, as he believes that this is the first time that the Argentine government has imposed rules favorable to investment and entrepreneurship in its recent history. This includes cutting public spending, stopping the printing of banknotes, eliminating "obsolete laws," among other measures.
“I think that if we combine that with a population willing to take more risks, to think big, to create jobs and to have a global vision, it creates a beautiful environment for future economic growth. For the first time, it is curious, Argentine banks are lending money. Before, they only lent to the Central Bank. Private credit is starting to recover. Now you can apply for a mortgage, when before you needed all the money in cash to buy a house,” Migoya recalls.
Given all this optimism, it is worth asking what actions Globant will take from now on. Its CEO anticipates that a good part of the US$1 billion investments in Latin America will be destined for the Argentine market in the next five or six years.
The software firm also has a strong operation in Asia-Pacific countries such as Japan, Australia and Singapore. “We are also hiring rapidly in India in the last few quarters,” Migoya adds. However, in the short term, Latin America will continue to be the priority market.
HOW TO APPLY ARTIFICIAL INTELLIGENCE IN BUSINESS OPERATIONS?
On the impact of the artificial intelligence boom , Globant's CEO says it reminds him of the impact of the launch of the first iPhone. When users began to adopt smartphones en masse , multinationals were forced to invest millions of dollars in technological experiences.
“What is happening now is exactly the same. People adopted large language models first, and now companies are understanding that their consumers’ expectations have changed. Customers expect the brands they interact with to behave more intelligently than before,” he explains.
In a previous interview, Migoya said that Globant is currently just “scratching the surface” of the potential it can achieve in technological advances. In other words, he means that every company on the planet will have to implement massive AI transformation programs that will last for years. These models will have to be applied in every area and process of the company, which will lead to significant changes.
“For example, let’s think about an online retailer. If they send three lamps and one arrives broken to the customer, today the customer has to call a service center. There, an agent decides whether a partial or full refund or a return is appropriate. This whole process could be automated by small agents with access to a large amount of information about the customer to make quick and intelligent decisions,” suggests Migoya. In this way, the process would be more efficient and would only involve humans when really necessary.
Although he does not deny that implementing AI at the enterprise level is a completely different challenge than displaying demonstrations on social networks. It is estimated that these advances will add US$ 1.5 billion to the market and could reach US$ 5 billion in the next seven years, thanks to the efficiencies they generate. For its part, Globant uses AI in recruitment and staff assignment, as well as programming acceleration.
