02 de August 2018
Bogota on its 480th birthday: balance and perspectives of one of the best cities to do business in Latin America
In addition to being the heart of the Colombian economy, Bogota, thanks to its strengths as a labor force, location and good business climate, has won a position as one of the best investment destinations in the region.
Bogota has become one of the best cities to do business in Latin America. Its economic strength, highly qualified workforce, excellent environment to do business, strategic location and prevalence in the Colombian economy guarantee its position as one of the most important investment destinations in the region.
Juan Gabriel Pérez, Executive Director of Invest in Bogota refers to this by explaining that Bogota, in addition to being Colombia’s economic, cultural and administrative center, is the ideal entry point to the Latin American market due to its location, political stability and economic development.
Economic Capital of the Country
The Colombian capital, which is celebrating its 480th birthday, recorded an economic growth of 1.9% in 2017, which is above the national level of growth (1.8%) and that of Latin America (1.1%).
The Bogota Region is the country’s economic driver: with a total GDP of $102 billion USD (32% of the national GDP), Bogota is ahead of countries such as Guatemala ($76 billion USD), Costa Rica ($58 billion USD) and Panama ($62 billion USD). Its GDP per capita is $10,270 USD, that is to say, $3,890 USD more than the country’s average. The Bogota Region’s economy is diversified and focuses on services, which represent 61% of the national GDP, retail with 25%, and manufacturing, with 12.3%.
The city boosts a great part of Colombia’s production structure, and is the largest consumption center in the country. In the metropolitan region there are around 10.8 million potential consumers, 21.9% of the country’s population, of which 51.6% are in the middle class, a percentage that has been growing in a sustained way over the last years.
An access point to multiple markets
The Bogota Region is the entry point to South America thanks to its privileged geographical location. The El Dorado airport is the first air terminal of Latin America in terms of movement of cargo, with more than 674 thousand tons a year, and the third for movement of passengers, with around 31 million.
The city has 46 direct flights to international destinations. In addition and for the third consecutive year, El Dorado was recognized as the best airport in Latin America in the Skytrax awards, a ranking that surveys more than 13 million travelers as to their full user experience and the quality of services provided by the terminal. Last year featured new international routes, which include Chicago, Munich and Salvador Bahía. Moreover, fDi Magazine recently placed Bogota in the first place in the category of innovation and attractiveness in the Aerospace Cities of the Future ranking.
Bogota’s capacity as a hub for business and transit of national and international passengers will increase yet still with the future construction of the new La Sabana airport, the city’s second air terminal, and whose operation will contribute to the strengthening of Bogota’s competitive position. It should be noted that the metropolitan region consolidates 36% of Colombia’s external commerce in order to measure the importance and potential of Bogota as a logistics platform.
On the other hand, the Bogota Region is Colombia’s main financial center and one of the most important of Latin America. Currently, 57% of the country’s financial transactions are carried out in the Bogota Region.
The best labor force of the country
The abundant and qualified labor force is another of the city’s differentiating factors. Bogota has an economically active population of more than 4.6 million people, which is larger than that of regional competitors such as Santiago with 3.6 million, Buenos Aires with 1.7 million, Quito with 877,000 and Panama City with 799,000.
Its 115 higher education institutions graduate annually around 158,000 students, of which more than 39,000 are postgraduates. The city concentrates 43% of PhDs and 34% of associate degrees Colombia. It is also the headquarters of two of the best 10 universities in Latin America. The region is also home to more than 1,700 research groups, 37% of the total for the country.
The Global Competitiveness Index classifies Colombia in first place in Latin America on the University-Business Collaboration Indicator. As such, businesses established in the Bogota-Region will find a human talent that can widely support their operations.
This makes Bogota more than a business city
Likewise, since the start of the century, Bogota has been strengthening and improving its environment for business. Various studies and international publications recognize it as the 5th best city in Latin America to do business, according to América Economía; the 5th Global City in Latin America according to ATKearney; and the 5th city of the future in Latin America according to fDi Magazine.
The ascent of Bogota in the “Best Cities to Do Business” ranking of América Economía is explained by its rating in the “Services for Executives” indicator, in which Bogota finds itself above cities like Buenos Aires, Panama City and Lima.
Variables like the number of ATMs, the number of schools offering an international baccalaureate, hospitals and clinics with the highest quality standards, and the presence of internationally recognized hotel chains, amongst other factors, mean that the city offers businessmen all necessary services so that they do their job. In fact, according to the latest ranking of the International Congress and Convention Association (IICA), Bogota occupies the 45th position among more than 600 cities in the world for corporate tourism. This proves that the city is reaching an important place in the mind of businessmen and executives from all over the world as a dynamic center for business.
Currently, the Bogota Region receives more than 1.7 million foreign visitors (50% of the country’s international visitors), of which 17% arrive to do business according to the Bogota Tourism Observatory.
Given the above, between 2007 and 2017, the Bogota Region has received more than $20 billion USD of foreign investment in new projects and expansion projects, mainly in the consumer products (15%), communications (14%), and financial services (13%) sectors. Whilst in 2007 there were 679 foreign capital businesses, more than 1,550 are currently registered. These achievements have given Bogota recognition as the first city with the best investment attraction strategy in Latin America according to fDi Magazine.
Sectors with investment potential
The city offers great investment opportunities, which include offshore services to conduct outsourcing operations, BPO, KPO, shared service centers and software, amongst others. The city likewise has an important potential in the creative industries sector and the entire orange economy, corporate infrastructure, training centers, biotechnology, added value manufacturing (medical equipment and supplies, pharmaceuticals, cosmetics, construction materials, processed foods) and I+D+i activities.
It is clear that Bogota-Region is gaining an important position as one of the main business cities of Latin America thanks to a solid value proposition that makes it very attractive for investors from all over the world.