Latin America's IT Market 2026-2027: Nearshoring Data

The most recent data on the Latin American technology market confirms a trend that has been building for years: the region is consolidating as a nearshoring destination for software development. It is worth looking closely, because alongside the expected growth, the numbers show something less comfortable that is worth knowing before choosing who to work with.

Steady nearshoring growth

The region's IT services market is forecast to grow at a 7.55% compound annual rate through 2030, approaching US$120 billion, according to Mordor Intelligence. In outsourcing specifically, Grand View Research projects revenue reaching roughly US$86.9 billion by 2033, growing 9.4% annually. Demand is driven by companies in the United States and Europe looking to cut costs without giving up quality, and to work with teams in time zones compatible with their own.

Brazil and Mexico account for most of the volume: Brazil alone represents 54.1% of South America's IT services market, and Mexico has established itself as the primary nearshore hub for US product teams. But volume and supplier strength are two different things, and that is where the map gets more interesting for whoever has to decide.

Talent availability, with a caveat

The region has more than 2.3 million technology professionals and produces some 296,000 STEM graduates a year, with close to 500 universities ranked in the Latin American edition of the QS World University Rankings 2026. It is a solid and expanding base.

The caveat appears in the same material: senior profiles are scarce. Some 72% of employers worldwide report difficulty filling positions, and for the first time, AI-related capabilities have displaced traditional engineering as the hardest skill to find, according to ManpowerGroup. In cloud and mission-critical systems architecture, the shortage is particularly sharp.

That changes how the talent figure should be read. It is not enough for the region to have a large professional base: the operational question is whether the partner you choose has real access to senior profiles and the ability to retain them, because those are exactly the ones being fought over.

Competitive costs — and why they should not decide on their own

The cost-to-quality ratio remains a regional differentiator: senior engineers come in 45% to 65% more affordable than their US counterparts, and the advantage widens against more distant destinations, where the price gap comes bundled with communication barriers and time-zone misalignment.

That said, hourly cost is the easiest criterion to compare and the least informative. A cheaper team that turns over every eight months, or that needs six months to understand a legacy system in production, ends up costing more than one with a higher rate. In platform modernization or systems integration work, the cost that matters is not the hourly one: it is the cost of redoing what was misunderstood.

What this means for companies evaluating outsourcing

Beyond the headline figures, the practical recommendation is clear: choosing a development partner in the region should not rest on hourly cost alone, but on the strength of the team, its experience on comparable projects, and its ability to integrate as a genuine extension of the internal team.

In the country-by-country breakdown, Uruguay is characterized by high-seniority, English-first teams, with Java among the most sought-after technologies in the local market and an ecosystem of around 530 technology companies. It is a small profile in volume and specific in strengths, better suited to focused teams and demanding projects than to large-scale staffing.

At Sagant, as a Uruguayan software factory specialized in custom development, systems integration, and modernization, we read this data as confirmation of something we work on every day: the region, and Uruguay in particular, has what it takes to meet this growing demand.

Does your company already have a development partner in the region, or are you still evaluating options?