The Nearshore Cafe
Hear from Nearshoring veterans about what it's like living and doing business in LATAM. Join our hosts and numerous guests from LATAM & the U.S. with interesting real life experiences. This podcast is full of great stories and useful advice on how to navigate the world's most untapped talent market along with travel tips.
The Nearshore Cafe
Trump’s Policies and AI: Shaping Latin America’s Economic Future
What if the political shifts from Trump's inauguration could reshape Latin America’s economic landscape?
Join me, Brian Samson, as I sit down with Luis Lozano, an expert on the region, to unravel these potential impacts. We dissect how Trump's policies might pressure Latin American countries, yet create opportunities for nations like Argentina. Mexico's unique position in the wake of tariffs and U.S. trade policies is analyzed, alongside the rise of nearshoring that could boost demand for diverse talents across the region.
Shifting gears, we spotlight the transformative wave of AI technology with a focus on Monterrey, Mexico's thriving software development scene. The episode explores how AI is redefining industry roles, especially for junior and mid-level professionals. We engage in a thoughtful discussion on the necessity of nurturing senior talent to harness AI’s full potential. Anticipating future trends, we delve into changes in immigration patterns and the evolving job market, emphasizing the critical need for continuous learning to stay ahead in an AI-driven world.
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We'll see you next time. Welcome everyone to the Nearshore Cafe podcast. I'm Brian Sampson, your host. Brian Sampson, your host, and if you're interested in perspective on what's going on in the US right now, we just had an inauguration. There is a lot to talk about the political economic landscape. We are joined by Luis Lozano, who's been a guest before. He's a strategist, knows all sorts of stuff about this. We're going to get right into it. I just want to thank our sponsor, Plug Technologies PLUGGtech great way to connect talent from Latin America to US companies. Luis, great to see you again, Thanks for joining.
Speaker 2:Thank you, brian, for inviting me again. I had a blast last time and I know that we will have one. There is a lot of talk about, I think, happening and this is great that it's happening right now and we have a lot to discuss and, I think, a lot of forecasts, you know.
Speaker 1:That's right. That's right. Well, as you said's, it was a busy week. Monday was the inauguration. Trump is now in office. Um, I think the most important thing about this podcast if you're a first-time listener is we just try to tell the truth. We try to be honest and authentic. Um. So, uh, luis, like what is what does that mean for people in Latin America now that Trump is in office in the US?
Speaker 2:Yes, yeah, I believe that we can see a little bit of what he did last time when he took the presidency, but I will say that he has already decided who. Like Trump obviously decided who is going to go against like what's the enemies? That he's going to call it like that, but I will say that it's not a surprise. I think he has been very truthful to his words. Whatever he has been saying, he's tried to do it. Not all the time is possible.
Speaker 2:So I will say that for LATAM, it means that we will have a lot of pressure, and I will say that all the countries in LATAM will have a lot of pressure either to comply to what Trump wants, because I think the, the and probably we will get more into that, but I think it's not that specifically he wants what he's saying, but he's like I am pressuring you to get something else right that I really like, and I mean this is business 101, you know, like pushing the buttons, where you get a lot of your people, like pushing you to make decisions. So I think, for LATAM in particular, it's going to be a row for years. It's not going to be as bad as a lot of people think. Again, this is a prediction. We don't know, nobody knows. Prediction we don't know, nobody knows. But I will say that, yeah, it's going to have a lot of pressure on the political side of all the countries.
Speaker 1:You know, when you obviously look at Latin America, it's a collection of a lot of different countries. Do you think there will be winners and losers, like, are there countries that will come out more ahead than than others?
Speaker 2:that, yeah, interesting uh stuff, because this is where, again, where forecasting comes to play.
Speaker 2:I will say that last time, um, mexico came on top, even even though we were like attacked directly, but that uh specifically, I didn't really uh, uh impacted, was more like uh, provide uh to um trump's um supporters, um, the um like that, showing that he is doing what he said that he's going to do, but really didn't impact that much on mexico.
Speaker 2:So I will say that, um, the countries that are going to be, uh, less likely to come on top are the countries that are not going to be or are not currently strong enough to resist the pressure and they are going just to break. I mean just, for instance, you see Panama, with this thing of the Panama Canal and people is like going crazy there and probably if you ever have a Panama person will know more, but I mean you see what is in the headlines. So I will say that that that I don't think specifically we, any specific country is going to benefit, but but I will say that some are not going to benefit at all and going to hurt, you know, because they are going to probably where I will say that if I need to go to one. I will say that Argentina is most likely to to to to be more, to get more benefits, because it's very aligned and they already say, like we are going to follow us, you know.
Speaker 1:Yeah, yeah, you see Malay and Trump together and they seem to, even if they're not speaking the same language, they're speaking the same language.
Speaker 2:Yes, exactly that's correct.
Speaker 1:Let's take a look at Mexico for a second president. Tell us about her policies and maybe how that's impacting positively or negatively. Nearshoring yes.
Speaker 2:So I remember last time we talked a little bit of these different laws that were like in the works, and now it's a reality for the different and now it's a reality for the different. The idea is that we can have. The concentration of power is different right now. What I will say is that it's going. It's not going to impact New York per se. What's going to impact is the expansion of some of the different industries that probably Trump is going to aim for. For instance, I will say that automotive is going to be one that happened last time, but at the end of the day, it's like they find a way to continue exploring Mexico. So what I will say is that it's going to demand more brainpower in to make it work, to make it work for the companies in the US, than probably like a year ago. And it's not because of shame. I think it's more like because of what Trump could do with the tariff impacts and everything. So I will say that specifically.
Speaker 1:Yeah, I mean tariffs are interesting. Canada is quite anxious right now, but I think oftentimes tariffs circle back to what you said like Business 101, oftentimes tariffs circle back to what you said like business 101. You know, maybe you start at some extreme position and then you work your way back. But I also think tariffs are really aimed at antagonistic countries like China. So perhaps there has to be some alternative to China and that's Latin America. Mexico is the most mature manufacturing country. Do you see it that way?
Speaker 2:Yeah, that's why I mentioned that. I didn't think that Trump is going to impact Mexico specifically, because, even though we are in that list, the reality is that we are in that list because, again, because of the voters, but not really because Trump wants to go against us. He wants to have more countries in an enemy list, just because that's how it is, and then he's going to attack the actual country. Obviously China, that's the one. And when you attack China, that just become we become an option, a better option, right? So I mean, if you see the numbers I don't have in hand because this is like a fluid conversation but if you see the numbers on the issue, it's like a spike, it continues to spike, and that also happened.
Speaker 2:Remember, when we talk about the dollar, that part of what happened, um. So I think it's going to happen more, uh, this in this next four years, um, and I will say that there are going to be some um industries that are not going to be impacted at all, like, for instance, technology and that is the core of what we talk normally here is not going to be impacted. But I I am certain that, and we know that nature is not only technology, I mean it's just one part. There is nature in in all the industries, so probably there is going to be another that are going to be more impacted because of the new policies started. But I don't think that tech in general is going to to get that, that the share of of pain. But I don't think that tech in general is going to get the share of pain on that. I don't think so.
Speaker 1:So maybe let's kind of think about all the there's manufacturing, but let's talk about non-manufacturing, which is still a broad array. Could be software development, but it could also be call center or back office accounting operations, administrative assistant, virtual assistant type work. Are there specific non-manufacturing industries that you think will continue to thrive and maybe others that will be stunted?
Speaker 2:Yes, I think. Well, I will say that what's going to impact more than the actual tariffs and everything is going to be AI right now. So I will say that if the industry is stagnant or if a type of work is stagnant, it's going to be because of AI, not because of what Trump is doing. If you see that in a ladder, you will see that that new trend, integration of the automations, are going to back more those works, those jobs, than what Trump is doing right now. There are others that I am obviously not aware of agriculture and all that. I know that there is a lot of tariff war in that and that has been for as long as I know, but I am not as familiar as to talk about that specifically. But probably there will be some instances there that Trump is going to use.
Speaker 1:Maybe let's just talk about emotions for a second. If you're a software developer in Monterrey, Mexico, and you've been working with US companies for the last couple of years, are you more optimistic today or less optimistic?
Speaker 2:Yeah, I will say that I will be more optimistic than before. And it just comes back to the fact that we just have a soft landing. I don't know if that's already what happened or not, but it seems like we have a soft landing. I don't know if that's already what happened or not, but it seems like we have a soft landing and we avoid to go into a recession, you know. So, when you come from that point, it's going to be better, regardless of what's happening. Right, because two years ago, almost three years ago, there was a lot of uh layoffs, there was a lot of situations where people uh lose their job. So right now doesn't look like it, you know. So I will say that is going to be. We are in the in a brighter side.
Speaker 2:Uh, I don't know what's going to happen in two, two, and probably we can talk about that when that happens, but right now it's better, also because let's just think for a minute how all this uncertainty impacts and we don't have it. We know what's going to happen Right now. We know what we can expect. Sorry, we don't know what's going to it. We know what's going to happen Right now. We know what we can expect. We don't know what's going to happen. We know what we can expect from one country to another, so that brings certainty that we didn't have last year, before the vote, elections in the US and Mexico.
Speaker 1:So maybe circling back to like Latin America as a whole, because if you're a US company, you've got all these different options, you've got overseas Asia, you build software at home, you can look at nearshoring. Then you also have AI. Right, can you talk through maybe even the mind of like a US software company within those four options and like we're nearshoring ranks and and even you know how AI is being used from a neshoring standpoint?
Speaker 2:Yes, okay, that's a pretty good one and I think it's going to help the audience to know a little bit more of what they can expect and also more context on what happened in 2024. You know, like most of the layoffs, if you analyze the layoffs of 2024, the companies I will start there, 2024 will be the companies I will start there. They were not because they have they needed to lay off, but mainly because they wanted to change some of the engineers or people they have. Like, they converted the manpower or the headcount into more AI focus. You know so, you will see that the headcount into more AI focus. You know so, you will see that. So I will say that that, from a US standpoint, I think what has been happening and what's going to continue happening is that right now, I feel like all the companies have tried AI in one way or another, so they know what they can leverage right now. Obviously, ai is going to continue to evolve. I don't know what level is going to happen, but I will say that companies right now need to prepare, they need to create a roadmap. How can I use AI? And I don't know if this is good or bad, depending on the site where you are on, but AI is going to reduce the need to manpower.
Speaker 2:Okay, so I will say that if I am a US company, I will continue to look for senior folks and even right now I will need more those that mid-level senior software engineers or junior software engineers. I mean, we have seen that a couple of companies saying that they are going to reduce their mid-tier, but it's because of that. I will give you an example. Obviously, I'm a recruiter, so I will tell you that some of the tools that I am using, and even if it's not like that advanced, some of the tools that I am using and even if it's not like that advanced, for instance, what five recruiters could do one year ago or two years ago, can be done by one senior recruiter in half the time. So it's like 10x. We were now you remember that time in the startup when everybody was like, oh, I want the 10x engineer. I think we are there right now with EI.
Speaker 2:So I would say that that's what's going to impact. It's going to impact on the jobs of the mid-level and junior people and I think we need to think as a community on how we can continue to contribute to the nurture of this talent because eventually we are going to run out of senior people. This is going to last for 15 years or 20 years, but as a community we need a replacement rate. So I will say that right now, the companies are not going to care about that. They are just going to focus on getting their senior folks that can use AI properly, because if you do that with a junior person, I mean it's not going to.
Speaker 2:There are some stories on the internet where junior did the wrong commit and then they are paying a lot in AWS because, I don't know, they have an apple that they didn't fix. So I think, with that being said, that's what, where AI is coming, and and I think everybody is saying and I agree with that statement that you're not going to be replaced by AI, but somebody that is using AI. And I will say that I think middle to junior are going to be less prone to have access to the top technologies or the hot new technologies that they can learn. They will need to learn on their own so they can level up until a certain point that they can be put to work with an AI agent. I see that as the future of happening and I think it's across the board, at least on any work that can be done in a desk.
Speaker 1:Yeah, I've heard the same thing that AI is not necessarily coming for your jobs. A senior person leveraging AI is going to beat you. Right, and I like the equation that you laid out. Maybe we can do some public math here and even think about a senior developer in the States that's using AI. Let's just say they work for a tech company, so they're well compensated. Maybe the cost the meeting cost is $20,000 a month, right. You add some AI tools couple $1,000, right, the cost for a senior engineer in Latin America is maybe one third of that, right? So now you're getting like kind of 3x, you know, like a 3x return of a 10x return in the first place, right? So, yeah, does that make sense?
Speaker 2:Yeah, yeah, no, right. So, yeah, yeah, does that make sense? Yeah, yeah, no, um, I think that's where nearsure is coming to play again for the senior senior, um, senior folks, uh, and I think that's pretty much normal when, when a company in the us come to latin america, they is is. I will say that it's not common. I mean, you have more experience than me, probably you can correct me if I'm wrong in that regard, but I will say that it's not normal to go for junior right talent. You go and hire the senior folks first and then you build a team around them, you know.
Speaker 2:So I will say that, yeah, that's true, you will have like a lot of benefit if you use it correctly. But coming a little bit back to the US, I think right now, at least in the next two years, there is going to be opportunity for US I will talk specifically in engineering to regain some of these jobs that were to near shore or other countries, just because it's most likely that they are going to be able to use AI, because of the premium AI tools, because it's more expensive, and we have that right now. Right, we have this level of AI where it's really expensive for others that are outside of the US and they can afford that, but in the US it's like, yeah, that's another tool that I have for my work.
Speaker 1:Yeah, because then it's just a matter of like best alternative. Do I spend $10,000 on a mid-level developer or, you know, $2,000 on the tools that would replace them?
Speaker 2:And I think that's where the AI companies are coming from. You know, like this is a value base where I am replacing, and another important part is that AI and I would say AI, but normally I would say that we call it AI, but it's any repetitive task that can be done by an agent that you don't need to do you know, like this is, I would say that that's where normally, when I talk about AI, that's what I meant. Coding, like sourcing for recruiters, no, so I would say that's where it comes from. So I would say that the AI companies know that they can do it and they will. This is an opportunity for those companies to charge more because they know the value that they will bring. And they make mistakes, but the mistakes come from the wrong configuration or the wrong prompt that you put to the system, and not the system per se. It could happen, but I haven't seen it happening yet. At least from the tool that I have been using, there hasn't been an error that didn't come back to me.
Speaker 1:I think even for us, software engineer aside, how do we source leads? And I get all these offers. Normally an SDR for us in the US is maybe $5,000 a month. Near shore it's $3,500. And then I get these offers for $1,000 a month. You know we'll do it will be all AI generated and you know we've tried a few things and like it's cheaper, but it hasn't been impactful. So I think that's kind of where we are with AI is. There's a lot of interesting tools that are still unproven.
Speaker 2:Yes, yeah, I think that's what I meant exactly when I said that the errors comes to you. These tools probably don't have yet or not all have all the capability to execute a super complex prompt. Right, that's the main thing. But I will say that where I see AI taking over in the next two years is not in this complex task, but in the easy task that can be the manual task. That are repetitive tasks. I mean, that's a no brainer. You can use AI tools and you are not. You just need to check the agent once per day or a couple of times per week and that's about it, right? Even with a junior resource, you will need to spend more time than that.
Speaker 1:I wanted to also just get into return to office. Right, that could have a huge impact on the nearshoring world, because nearshoring accelerated when everyone was comfortable with remote work and it's like, okay, what's the difference if they're in Kansas City or Mexico City, right. But now, if they all have to be in the office, what does that mean, luis? Like, does that make anybody nervous in Latin America? Or is this treated differently? You know what do you think?
Speaker 2:Based on what I saw before pandemic, when we see this spike of digital companies and go to office and sorry, home office, I think we are going to retake that path. So we probably are going to get back to before 2020, where you have these companies that provide the opportunity to work remote to get the best talent, and the ones that doesn't need to provide that benefit and they want to to to be on the, on the office. You know, um and I, and I think it'll come. It comes back also to um, the, the person that is leading that company. But I will say that you will see and we will see more and more people coming back to office.
Speaker 2:Uh, hybrid, I think, is a is the winner in this.
Speaker 2:Nobody likes yeah, because it's like okay, two hour, two, two days in the, the in the office, three days home office, um. So I think that's obviously that's the middle ground for most of the employees, not not middle ground for most of the employees Not all, but most of the employees would like to be at home and most of the employers would like people to be in the office. So I will say that the middle ground obviously is hybrid and I will say that if you go back to 2018, 2019, there was hybrid was happening but nobody was taking, nobody calling like hybrid. It was like I am in the office and then I I am in my home one Wednesday a week, right. So yeah, I think remote opportunities are going to be for for very for the, for the best talent down there. So the 1% of the 5% I would say that the top 5% of down 10% probably of each country will still have options, plenty of options for remote work, but the other 90% of the population is going to be hybrid or in office.
Speaker 1:A topic that has been on the political radar a lot with Trump during this campaign and now is immigration. But you slice and dice. There's a lot of pieces of this, you know. There's illegal immigration, there's legal immigration, there's immigration of people that work in tech, there's immigration of people that are doing manual labor, you know, and all sorts of things in between. What does it mean, you know, for immigration? Does it have any impact? You know, like, uh, are more jobs being near short because of that? Or you know, uh, I'm sure you, you, there's like a lot of pieces we can go here and I I don't want to over ask the question, I would just love to hear your thoughts louise yes, um, if we focus, obviously, in the immigration to the US, I will say that I think, at least for the first year of Trump office, immigration is going to get impact.
Speaker 2:Probably, after the dust settles, we will see something similar to what we have. That's again my prediction. We will see something similar to what we have. That's again my prediction, because that's similar to what happened last time. We have a lot of restrictions at the beginning, remember, and then the restrictions were not in the picture anymore. So I already did that. So it's cool. I couldn't no worries, so let's move forward. So I think it's so. It's cool. I couldn't no worries, so let's go forward. So I think it's going to be similar. But Normally the benefit of the fail or the lack of immigration in the US is either I think in this case, previously I would say that it was Canada, but Canada right now is not in a pretty good place I would say so, probably we will see more of that in Mexico City, because there are a lot of even without that.
Speaker 2:We saw a lot of US folks going to Mexico City, right, mexico City, right. So I will say that there is going to be more opportunity for other countries, and obviously Trump's target countries, to, instead of going to the US, coming to Mexico. So I will say that Mexico is the option. There are other good options Colombia, obviously, argentina but it's pretty. I will say that you stay in Mexico for a couple of years and while that this is in Mexico for a couple of years, and while this is in the past, they can apply again to go to the US. So I think it makes sense and right now we don't know what's going to happen with Canada in terms of politics yet, so I wouldn't say that it's easier for somebody to come to Mexico right now and not risking going to Canada if you can go to the US.
Speaker 1:We talked a lot about AI today, Luis. Think about tech as a whole. Are there certain jobs or areas that you think will do really well in the next two years and ones that might be left behind?
Speaker 2:Yeah, I think there is a lot of opportunity, and I think I wrote a post about that before I talked to you last year, and I think the prediction is coming pretty similar to what I said, and what I said and I continue to say the same thing is that anything that is repetitive, obviously, is going to be removed. You will need to be more strategic and you will need to know more how to use AI. Okay, so, with that being said, I think the roles per se are going to continue. At least 80% of the roles are going to continue to be the same, but the other 20 are going probably to disappear in the next five years, and those jobs are where there were a lot of manual input, there is a lot of prone to error, and that is again low, I would say low level jobs are the ones that are going to be hurt the most with the AI.
Speaker 1:Luis, this has been fantastic, as always, you always bring the heat, bring good insights. As always, you always bring the heat, bring good insights. Anything we didn't talk about, that you wanted to share thoughts, predictions about anything else we didn't touch on.
Speaker 2:I would like to mention that I like the AI a lot. We remember in 2022, I think it was, I don't remember if it was 2022, but we have, like, these two paths right Either go to the metaverse or go to the AI, and I mean we are in the AI future, or timeline, as they call it. So I think it's going to be very interesting what's going to happen. Last year, for everybody is like oh, we didn't know that AI could do this. You know that this could be something that could help us, but, as you mentioned, ai is not yet there to replace any of the work. So I will say that we need to prepare individually so we can take advantage of the AI before AI take advantage of us, you know. So that's what I would like to add.
Speaker 1:Good, good, good insight. Yeah, I think we all have seen Terminator 2.
Speaker 2:Yes, exactly, and we don't want to be in that part. So I always say thank you to the chat GPT bot, you know, and good morning. But yeah, no, I will say that that we need to prepare, and the faster that you learn these tools is going to help in the career. That's the advice I would like to send over to the audience that prepare, because with these things you don't know when you're going to get replaced, but you know that it's going to happen eventually if you are not prepared.
Speaker 1:Great insight. Luis Luis Lozano, thank you so much for being here. You were listening to the Nearshore Cafe podcast sponsored by Plug Technologies. Great way to connect talent from Latin America to growing US companies. Thanks again for listening. We'll see you next time on the Nearshore Cafe podcast.