The Argentine Senate approved the law of knowledge economy, which seeks to extend the benefits granted by the software law in Argentina since 2004 to more companies and boost the participation of the technology sector in the country’s economic development.
The draft law was made together with entrepreneurs and engineers. The act benefits 11k companies linked to the knowledge economy, understood as the productive activities with intensive use of technology and that require highly qualified personnel.
This sector includes software, robotics, biotechnology, the aerospace, and satellite industry, audiovisual, electronics and the communications sector, geological prospecting services, outsourcing services, research and development, nanotechnology and nanoscience.
Law of Knowledge Economy would boost jobs creation
The law aims to boost the growth of employment in the sector 65% more than in the period 2007-2017. At present, the knowledge economy accounted for 14% of jobs in the country and grew double-digit from 2003 to 2015. However, it has recently receded.
Software’s law helped boost the technology industry of the South American country; only 10% of companies take advantage of their benefits. The new legislation extends the benefits of the software law to other sectors such as biotechnology, robotics, artificial intelligence, and outsourcing.
Alejandro H. Ramírez, of the firm Highton, Marinelli & Ramírez considers that “the legislation needed to be updated and this is a major step in a long-term. There is a lot of expectation among investors and entrepreneurs.”
The Association of Entrepreneurs of Argentina (ASEA) positively evaluates the law and considers that it can help create startups.
“Argentina has many entrepreneurs and talent. There are many examples of great ideas coming into the country, but the country needs venture capital investment, and there is no culture of investing in startups in Argentina, “said Ramírez.
The law comes at a time when the export of knowledge-based services has fallen by 15.6% in Argentina, according to the report of the Knowledge Economy Observatory. This number is worrying as IT was a sector that had grown in numbers. Two digits and that had surpassed the exports of traditional industries like the cattle and the soy.
The annual salary of the sector has also fallen as a result of the devaluation of the dollar against the peso. Ramírez laments that the continuing economic crises in Argentina have affected confidence in the country.