The last decade has shone the spotlight on developing economies and the opportunities they offer, with terms like ‘BRIC countries’ becoming part of the lexicon. While there is no longer a debate about growth opportunities in emerging economies, the financial crisis has shifted the focus to understanding whether these opportunities can and will eventually come to fruition. The Wharton Latin America Conference aimed to shed light on how to define, identify and convert these opportunities to reality. Organized by WHALASA and WhartonLatino, the conference assembled a slate of influential leaders across a multitude of countries and industries. The topics covered included investment opportunities, innovation and entrepreneurship, organizational transformation in the region and social impact. The receptive audience included members from the Penn community, participating schools as well as professionals interested in the region.
The resonant theme that emerged from the conference was that while there are innumerable avenues primed for success, there are key endemic challenges that need to be addressed. According to Rhett Morris, (Director, Endeavor Insights,) the regions ailments are not obstacles; rather, opportunities ripe for entrepreneurs as there are a number of problems to solve. He specifically cited Bogota, Mexico City, Buenos Aires and Sao Paolo as the cities with highest potential for entrepreneurial activity. Pete Foyo (EVP, Business Development, NII holdings Inc.) concurred in his speech, stating, “Risk is an opportunity.” He spoke at length about his experience managing Nextel’s operations in Mexico and the challenges faced coming up against regional players.
The panel discussions also focused heavily on the issue of understanding and working with the diversity in the region. For a company like TAM Airlines, operating in competitive and highly regulated markets, each country requires a different approach. CEO Claudia Sender, addressing the audience via Skype, highlighted the company’s strategy – the aspiration to operate as a Latin American company, rather than being known for a specific national identity – be it Brazilian, Chilean or Argentinian. She also elaborated on how customers had come to expect a consistent experience across all touch-points and geographies. Even within the geographic confines of the region, a successful model in one country often requires a high level of customization to be employed in another country.
The role of national and regional governments was unanimously cited as a factor in determining the contours of country-level strategy. Luis Miguel Castillo, CEO of CBC described an episode involving his company’s foray into Belize. After a successful run in the market, the company found itself grappling with the sudden and unexpected introduction of a tax regime. This regime heavily favored the competition and impeded their growth in the market. The important lesson learned from these events was to prioritize partnerships with local businesses in each country – partners who not only understood local customer needs but were also adept at anticipating political and governmental transformations within the country. The agility and flexibility of companies to deal with fast developing situations is contingent on finding and retaining the right kind of talent, the panelists said. This need for human capital is perhaps the single biggest impediment to harnessing opportunities in the region. A limited supply of skilled labor has ensured that competition for talent is fierce and domestic companies not only have to compete among themselves but also with a wide array of international opportunities. Although labor is cheap, there are issues of insufficient resources for training, particularly in higher education.
The strong display of enthusiasm from Wharton students at the conference should hopefully alleviate some of those issues in the near future. According to students who came to Wharton from Latin American countries, the conference was a platform to network with entrepreneurs, leaders and their peers. For others interested in the region, this was an occasion to get a better sense of the opportunities and challenges. The conference concluded on Saturday with a Private Equity competition, with eight participating schools, focused on investment opportunities in Latin America.