The Investment & Trade Promotion Agency of Buenos Aires City, better known simply as investBA, was created less than half a decade ago – but the agency is already making a name for itself on the international stage.
From being named the number one new investment and trade promotion agency in Latin America in 2020 by International Business Magazine (and third this year), to advocating for legislative change in the hotel industry, to building thousands of business relationships in both the investment and export sectors, investBA’s work has been a driving force in modernising and rejuvenating the City economy.
The agency’s cooperative relationships with international giants like Claro and Pfizer, thousands of young Argentine PyMEs (SMEs) and startups, investment and trade promotion agencies across the globe, and local and international media has helped to cement Buenos Aires’ status as an international centre of commerce in the 21st century. Last year, the agency’s FDI promotion strategy was also named as third-best in the world by the Financial Times, competing with megacities like Shanghai and New York.
In an interview with the Buenos Aires Times, investBA’s General Director Alejo Rodríguez Cacio explained where the agency fits into an ever-changing Argentina and the biggest challenges facing the nation.
“We believe that the private sector is the one that has to create value, has to create jobs, has to create innovation,” said Rodríguez Cacio. “The government should be there to help, to set the basic rules. We are not the ones who have to create jobs or innovation.”
The director, who has been with investBA since it was set up in 2017, stressed the importance of cooperation across sectors: “Everything we do, every policy we do, we think about it and develop it together with the private sector.”
InvestBA operates under the Buenos Aires Ministry of Economic Development and Production and is a fully-funded government office. “Everything we do we do for free, because we believe it's the right thing to do,” said Rodríguez Cacio.
“We seek to promote initiatives that encourage the generation of employment, productive development and new business opportunities in the City,” agrees José Luis Giusti, City Hall’s Economic Development and Production Minister.
‘Home office’ boom
Like all firms and agencies, investBA has been forced to adapt to the coronavirus pandemic, with the agency’s offices following many industries in shifting to a more flexible approach to working. According to Rodríguez Cacio, Buenos Aires is perfectly placed to adapt to the change – about 70 percent of the City’s output is services-, knowledge- and talent-based.
“That change of mentality, … has also brought a new demand for services. Three, four, five years ago, it would have been difficult for somebody in Buenos Aires to provide a service online to someone in London or in Mexico City,” Rodríguez Cacio told the Times. “Now, because we have been accustomed to Zoom … the demand is there. It’s much more normal for someone to say, they have a good price, good quality, I don’t care if they are in Buenos Aires or London or Mexico, I’m going to work with them. That is starting right now and I believe it has come to stay.”
At the same time, logistics (such as the advent of next-day delivery), e-commerce and fintech sectors have also exploded in the City and the wider region. Rodríguez Cacio picks out fintech company Ualá as one such success story.
Billed as “a financial technology company that removes barriers in the financial systems, creates opportunities, and enables consumers to prosper,” Ualá is decidedly “not a bank,” explained Rodríguez Cacio.
“There’s lots of people who don’t have a credit card, they don’t have a bank account, and they are starting to have financial services for the first time in their life,” he said, highlighting that up to 40 percent of Argentina’s economy is informal.
Not all online
Not all of investBA’s work happens online, though. PROA, a local real estate and urban development firm with over half a century of experience in the region, is one firm that entered in partnership with the agency during the pandemic.
Investing US$5 million into two residential sites, PROA sought a work permit from the City government and InvestBA stepped in to provide advice, facilitate meetings between the company and relevant government entities, coordinate paperwork and “streamline” the process. PROA President Alex Atakan said the two entities “collaborated enormously” on the project, which is still ongoing.
“We believe that Buenos Aires is a great city due to its level of infrastructure, its services and its cultural agenda,” said Atakan in a written interview. “It is essential to have a city that accompanies the private impulse by providing financing to developers, a legal and legal framework for companies, benefits for investors, and security and services for residents who choose to live in a project of ours.”
“Our desire is to be able to work together with the City’s Government in order to integrate public and private sector, as well as ecology and nature, into our projects, encourage ecological transport and sustainable ways of life,” said Atakan, who said PROA hopes to continue to invest in Buenos Aires and abroad through a 12-year “master plan” focusing on infrastructure and social and economic development.
Local and global
Investment isn’t all investBA does: their work to help local companies both large and small secure necessary funding abroad and develop their expansion models is the first step toward diversification and beginning the process of exporting goods and services — “connecting local talent with global opportunities,” as the agency calls it.
One example of a hometown company stretching its wings? EXO, a computer manufacturer founded in Buenos Aires in 1978, decided to expand into the Peruvian market last year after more than 40 years in the area. Quizzed about the support he received, Pedro López, EXO’s corporate sales manager, described the relationship between investBA and his company a “permanent collaboration.”
“[The partnership] is allowing us to access multiple markets with great expectations of achieving important commercial agreements in a short time,” said López in a written interview. “InvestBA has been collaborating with EXO for several years, with greater emphasis in recent months, being of vital importance for this stage of the development of international trade that our company has decided to address.”
After participating in virtual rounds with potential business partners facilitated by investBA and PromPerú, Peru’s national tourism board, EXO is currently in the process of closing a deal with INTAI, a Peruvian computer company.
This year, EXO will sell the Peruvian business 30 specialised computers, with the partnership expected to continue. “EXO's aim for the next few years is to become a benchmark for the Latin American market in the development of technological solutions,” said López.
“To say that our development of foreign trade will return prosperity to Argentina may sound grandiloquent, but, without a doubt, we are an Argentine company that after 42 years of existence, and having overcome the multiple economic crises that we have had to go through, continues to focus on generating better results,” he added.
With so many positive developments, what’s not to love? Well, Rodríguez Cacio admits it’s not all plain-sailing and says two obstacles have stood in the way of many firms’ development: inflation and capital controls, issues which he stressed affect the whole of Argentina has to reckon with, not only Buenos Aires.
The official, however, remains optimistic. “Argentina is not the first country with inflation in the world. … Argentina was a country with high inflation in the past, and it was able to leave that in the past,” he said. “Inflation is not forever, and capital controls are not forever, either.”
“If you want to be in Buenos Aires because you have the talent, the good prices, then [inflation and capital controls] shouldn't be a reason why you shouldn't come to Argentina,” said Rodríguez Cacio.
“Those come at the expense of not having other problems. It's pros and cons like everything in the world. It's not that I don't see the problems — I see them. But I believe that we're going to be able to overcome them in the future.”