Milei's economic reforms expected to lift Argentine knowledge economy

Argentine entrepreneurs are optimistic that economic reforms by the President Javier Milei administration will boost employment and increase exports related to the knowledge economy.

According to a study by business organization Argencon, 80% of the companies surveyed expect exports to grow as a result of the new economic policy focused on liberalization. Half the respondents expect export growth to exceed 10%.

The survey was conducted in 1Q24 with 28 companies in the knowledge economy. Among those surveyed, 40% were from the information technology sector, 36% professional services, 7% marketing, 5% audiovisual services, 5% bioscience or bioeconomy and 7% from other areas.

In a report containing data from 1H23, Argencon said that exports of knowledge-based services reached US$8.06bn, up 8.8% annually.

In this year's survey, 70% of respondents expect employment to rise, with over half projecting growth of over 10%.

Optimism is high among professional services companies, where 33% estimate growth of more than 20%. Only 10% of information technology companies foresee similar growth.

Difficult access to foreign currency and the lack of exchange rate unification were mentioned as the biggest challenges.

"The results confirm that with the elimination of foreign exchange restrictions, the stabilization of the exchange rate, the simplification of regulations and the reforms announced in the labor market, the knowledge economy will see a significant improvement in its international competitive capacity, which would result in an increase in employment and exports higher than that recorded in recent years," Argencon president Sebastián Mocorrea said in a press release.

Around 22% of respondents mentioned regulatory complexity as another limiting factor, and 13% complained about the impossibility of paying salaries in US dollars. Particular conditions of the knowledge economy, such as deficient training of digital talent and lack of English skills, were mentioned by 18% and 12% as obstacles.

Some 45% expect market demand of knowledge-based services in Latin America will be similar to global growth, while 45% estimate that it will be higher.