Spurred by the pandemic, Chile’s digital transformation received a boost, more startups were created and went international, while 5G will provide further momentum for innovation.
“I believe that in the next five years we will begin to see real changes, because what we are talking about are major structural transformations,” Camila Mohr, CEO of Innspiral, told a Chilean innovation accelerator, told BNamericas.
But insufficient budgets and organizational culture are hindrances in the transformation processes.
Growth, moreover, is hard to achieve currently. Innspiral expects growth of 1.5%-2.5% and inflation of around 7% during the first half of the year, with growth then rising to 3%. This level would be maintained in 2023.
Funding will also remain a concern, according to accounting firm Grant Thornton. “Although the current funding shortage has eased from a peak in the first half of 2021, it was still cited by many executives as a key business constraint in 2022,” the company said in a press release.
Grant Thornton interviewed 375 mid-market senior executives from technology companies in 29 countries to understand the key trends in the next 12 months.
Raja Lahiri, partner at Grant Thornton Bharat, said in the release that “in 2022, we are already seeing signs of tech company valuations moderating, and mid-market valuations should focus on profitability and unit economics as well.”
In Chile, however, “entrepreneurs are activating, investors are learning to invest in startups, and companies are starting to take advantage of open innovation,” Mohr said.
She said Chile was increasingly ready, with many startups internationalizing, some even becoming unicorns, like Notco and Betterfly. “Two or three years ago, it was impossible to think that a Chilean company would be present in these markets,” Mohr said.
Entrepreneurial capital in Chile grew from US$60mn in 2019 to US$160mn in 2020 and US$400mn in 2021.
“With the arrival of 5G we will be able to have many more artificial intelligence, augmented reality and cloud applications,” she said.
Mohr added that the most advanced startups operate in the insurtech, fintech, and logistics areas, while agriculture or forestry offer latent opportunities.
Cultural change will be key, Mohr said.
“You can make calls for open innovation, but when you connect startups with companies, the biggest difficulty is in integrating a more traditional, structured world with startups,” according to Mohr.
“I don’t know how many companies are effectively making this match today,” as “sitting down to talk and negotiate is the easiest part,” but companies fail to take advantage of their alliances with startups.
Grant Thornton’s report highlighted the important megatrends companies must take into account. Inflation will impact profitability and access to capital, internalization in sales, service and supply chains will intensify, while talent acquisition will be crucial and environmental, social and governance (ESG) criteria become more important.
Innspiral also found that climate change will determine trends.
Chile ranks among the countries that will experience most water stress, as consumption in the agricultural sector grows and productive industries are highly dependent on water use, while a decade-long drought is underway.
“The problem is that if we don’t change today, we are going to have big problems because the impact of the climate crisis is no longer for the next generations but for ours,” Mohr said.
Other trends Innspiral identified related to the energy transition, changes in telecommuting, and the workforce.