IT Export Areas
Currently Venezuela exports very little telecommunications or technology equipment. They have had no local production of hardware, and very little local production of software. The local production of software is limited to localized business software written in the Spanish language. The software is exported to other Latin American countries with similar business needs, and the same language requirements.
Local Production and Exports from Venezuela (US dollars in millions)
Hardware |
Software |
|||
Year |
Total Local Production |
Total Exports |
Total Local Production |
Total Exports |
| 1996 | 0 |
0 |
20 |
15 |
| 1997 | 0 |
0 |
22 |
18 |
| 1998(forecast) | 0 |
0 |
26 |
21 |
Source: Florida Trade Data Center Index
The future for local production in Venezuela does not look good. Since most of the technology is coming from international companies, they tend to bring in their own technology. Another issue with local production is the proximity and reliance upon US technology. Although their initial telecommunications infrastructure is European, they have become reliant upon technology from the United States to build their new technology.
Many Venezuelan students are exposed to US technology. Of the approximately half a million university graduates, 20% have been partly or totally educated in the US. Another 20% have had direct exposure to US culture and business practices. This has created a wide reference for US products and services. (National Trade Report, pg. 20)
These factors have created a great deal of demand in Venezuela for US products. Total exports from US to Venezuela are about 5.0 billion. This represents an increase of almost 25% during the first quarter of 1997. This increase is expected to remain constant over the next year (www. flatrate.org/ccg/venezuel.htm).
Telecommunications services were the highest non-agricultural related goods and services for United States exports and investments. The totals for the past two years and the forecast for 1998 are as follows:
Telecommunications Services (US dollars in Millions)
Year |
Total Sales |
Sales by U.S. Firms |
| 1996 | 3,000 |
2,200 |
| 1997 | 3,600 |
2,500 |
| 1998 | 4,680 |
3,250 |
Source: Florida Trade Data Center Index
The need for telecommunications services continues to grow in Venezuela. The demand for services is no where near satisfied. One main impetus for this growth is the opening of the oil sector to foreign investment. The foreigners coming into the area require advanced, reliable and efficient services.
The phone company is still privatized, but the every non-telephone company related to communications (data, voice, video, trunking, etc.) has an affiliation with the United States. The companies are either fully or partially owned by U.S. companies, or participate in carriers or satellite contracts.
The export of Telecommunications equipment from the US to Venezuela is the second largest non-agricultural export. The totals for this industry in US dollars are as follows:
Telecommunications Equipment (US dollars in Millions)
Year |
Total Market |
Total Imports |
Sales by U.S. Firms |
| 1996 | 1,459 |
1,400 |
600 |
| 1997 | 1,711 |
1,628 |
700 |
| 1998 | 2,042 |
1,958 |
980 |
Source: Florida Trade Data Center Index
The increase of telecommunications equipment is due to the up and coming opening of the basic telephone market in the year 2000. Companies, both from the United States and from Europe are trying to position themselves to get some of the new business this change provides.
Other reasons for the increase in need for telecommunications equipment are similar to the reasons for the increase in telecommunications services. The increase of foreign direct investment, the need for an improved telecommunications infrastructure and the implementation of new technologies all contribute to the increased need of telecommunications equipment in Venezuela.
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