Market Overview The Chilean IT market is one of the most developed in the Latin American region and, despite current economic headwinds, is projected to grow at a CAGR of 10% over the 2008-2013 period. While only around 1/10 the size of Brazil's IT market, the total value of Chilean domestic spending on IT products and services should reach US$3.4 bn by 2013. A PC penetration rate of around 18% indicates plenty of untapped market potential. Chile is projected to be one of the Latin American markets most affected by the global economic slowdown, and real consumption and investment are both expected to dip sharply this year. Tighter credit conditions will lead to deferred IT spending in the short term by consumers and businesses. However, BMI's view is that the fundamentals of growing affordability and low PC penetration will keep the market in positive territory during the forecast period. Particularly in the current economic climate, as stimulus spending is being announced, government programmes should provide an important market driver. The enterprise sector represents an evolving opportunity in the forecast period, with relatively low levels of investment currently relative to some countries in the region. The economic slowdown in the US should increase demand from US companies for Latin America-based outsourcing solutions. Industry Developments Government spending on information and communication technology (ICT) projects is expected to rise in 2009, with stimulus spending being ramped up to revive a slowing economy. In 2008 the Chilean government launched a major programme to promote IT use among small and medium-sized enterprises (SMEs). The programme, backed by the Ministry of Economy, was budgeted at CLP3bn, with CLP1.8bn coming from the government and the remainder from regional governments. The programme is particularly targeted at SMEs that operate in the food, agriculture and tourism industries. The Chilean government, led by Chile's economic development agency CORFO also planned to invest US$11.7mn in 2008 to help establish Chile as an offshoring services location. In November 2007 the Chilean government established a new council to lead this campaign. The government's National Innovation Council had identified the offshore industry as one area with high growth potential for the next decade. The government has a target for export of IT services to reach US$1bn by 2010. Chile is likely to see changes to its intellectual property framework. Changes to Chile's IP laws were made as recently as January 2007, but were widely considered insufficient. There is general agreement on the need for further reform, but new anti-piracy proposals that are currently under discussion have attracted criticism from IT companies for being too lenient.
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