Venezuela’s Challenge — Trascend From Cheap Labour for The World To a Powerhouse of Innovation.
In recent years Venezuela has become the source of the cheapest skilled labour in the world. An Indian worker charging $4 an hour is expensive as that amount is an entire month’s minimum wage in Venezuela.
The internet is the only market the government hasn’t been able to intervene and destroy. Going online is a way to log out of Venezuela and all of its problems. A digital realm where people can offer their services and work with projects all over the world.
Ironically, lack of government intervention in the provision of digital services has created simultaneously the cheapest labour by worldwide standards and the best paid people on the country. Free markets work.
Digital services are not completely sheltered from local corruption, inefficiencies and failed policies of subsidies and price controls. The internet is painfully slow and daily electricity blackouts are normal. However, it is good enough to work, even if it means losing some sleep to ensure the work gets done despite technical difficulties.
So far, it seems to be mostly Venezuelans overseas the ones taking advantage of this opportunity. Outsourcing work to people in Venezuela for a fraction of the cost, capturing all the value in their overseas registered business.
Technical skills and the unique problem solving abilities that only people in a country in deep crisis are valuable, but are raw skills that need nurturing. An entreprenurial, business friendly ecosystem is necessary to enable people to reach their maximum potential.
The challenges faced by Venezuelan businesses are not unique to Venezuela. Rather, they are unique to countries who implement radical left policies.
We mentioned capturing value. Nobel prize winner Hernando de Soto explains in his book The Mystery of Capital how an inability to capture value due to lack of land titles and business registrations create and entrench poverty.
Business creation and growth are the fundamental pillars for any economy to grow. Real growth is realised through economic activity. Printing unlimited amounts money, raising minimum wage every second week (actually bankrupts the few remaining businesses), or magic tricks deleting digits off the currency and pegging it to a non-existing digital asset (fooling no one) are measures of a failed government.
The government must be replaced.
If you would like to drive a 2018 Mercedes Benz, it is irrational to keep driving your 1998 chevette (crashed everywhere and with an engine failure) and occasionally replace a part or two
Did you get alarmed by reading the words ‘the government must be replaced?’. If yes, then you must be Venezuelan. It is truly concerning how such a simple statement causes so much controversy and fear. It should not be necessary to start a war about this. The proposition is quite simple — if you have failed at your job, you ought to be replaced. Democratic constitutions protect people’s ability to replace their leaders peacefully and periodically.
Clearly, Venezuela is not a democracy. But that does not mean that we stop working towards building the country the want and deserve. It just means we have to focus on the right target…
Innovation — an ongoing pursuit to solve problems and generate value — can not be stopped when the government mandates to. It simply reallocates and reinvents itself. Venezuela is experiencing one of the largest exodus in history — millions of Venezuelans full of potential and ideas are reallocating to other countries. And with the freedom of speech and personal safety that their new host country gives them through the rule of law, they keep working towards a common goal…
What would it take to create a local thriving entrepreneurial system? Join us on this journey to empower people to become the best version of themselves. Comment. Follow. Share.
Link to post in spanish.
Alejandro is the Founder and CEO of Mango Markets. A leading Cryptocurrency Exchange in Venezuela that halted operations due to regulatory uncertainty. The Mango Markets team continues working towards providing decentralised technologies solutions to the people that need it most.