Transborder Data Flow

Overview

Venezuela has many competitive advantages in information technology. For instance its complete de-regulation and privatization of its telecommunications industry in November of 2000 is a competitive advantage. Others strengths include its IT supportive Government, its educational system, and its technopolis--Merida. Venezuela has its weaknesses in IT also. The staggering e-commerce growth rate, and low-paying IT professionals represent some of the weakness Venezuela has in IT.

Competitive Advantages/Strengths

· Based on the Leading Indicators of technological competitiveness, a study performed by the National Science Foundation, Venezuela would seem to be strong in terms of technological competitiveness. Venezuela ranked second to Brazil out and over Argentina and Mexico for national orientation. National orientation can be summarized as measures taken by culture, government, and business to achieve technological change. Venezuela ranked first out of these four countries in socioeconomic infrastructure-social/economic institutions that support the resources essential to technology; technological infrastructure-resources that contribute to a nation's capacity to develop new technology; and productive capacity-analyzes the resources to manufacture products (1). However, in comparison to Singapore, South Korea, and Taiwan, Venezuela rates rather low.

· The recent and complete de-regulation of the telecommunications industry can also be seen as a competitive advantage for Venezuela. Investments in infrastructure are likely to increase significantly.

· The Venezuelan government's initiatives to foster Internet use and e-commerce growth throughout the nation, and its plan to form an e-government are other strengths. Venezuela has already laid a foundation for increasing technology use just as many countries' governments play an active role in these interests.

· Merida, Venezuela's "Silicon Valley" may soon have a competitive advantage in the research and development fields. The state is working to provide a free trade zone as well as tax advantages to business starting up in the state.

The salaries offered to Venezuelan IT professionals are leading to a growing "brain drain" with talented Venezuelans heading for the United States, Canada and Spain where well-trained technicians can find higher-paying jobs with substantially better working conditions.

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