Start-Up Chile has garnered overwhelming praise from the press and social commentators. Stephen Keppel, an economist and writer who is currently Director of Empowerment Initiatives at Univision News, argued in an article in October 2013 that Start-Up Chile, is quite literally “changing the face of entrepreneurship in Latin America” and with it the Chilean culture and economy. In just three years, the program has attracted over 900 entrepreneurs from 37 countries, created 695 jobs and sparked 36 deals with Chilean investors. The Economist coined the term “Chilecon Valley” in 2012 and argued that Chile has successfully exploited Silicon Valley’s weak point by welcoming thousands of entrepreneurs who were turned down in the U.S. due to rigid immigration policies. Kauffman Foundation Vice President of Innovation Lesa Mitchel praised it as “ a unique model other regions of the world should emulate”.
A promotional video on Start-up Chile’s website spells out their mission “They arrive. They work. They connect. They leave and Chile stays connected”. Thus Chile is less interested in attracting the businesses as they are in fostering an “innovative spirit” that they hope will begin to permeate a typically risk averse Chilean culture. In return for the $40,000 in seed capital and the free visa, Start-Up Chile participants are required to engage with Chilean students and often end up mentoring and hiring Chileans. They are required to speak to local entrepreneurs, speak at events, and have held thousands of workshops. The program has engendered in Chile, a country heavily reliant on copper exports, a new spirit of innovation and creativity that the Chileans see as key to their economic future. “The influx of foreign innovators” Keppel argues, “has disrupted the status quo in Chile and introduced a new generation of entrepreneurs to opportunities in Latin America.” By importing foreign entrepreneurs, the Chilean government hopes that they will inspire homegrown ones. “The idea is to fertilize the local landscape with new ideas and ambitious people” Vivek Wadwha, a visiting scholar at Berkeley argued. “This is a win-win. If all goes according to plan, we will have a thriving innovation hub in Chile-Silicon Valley South”.
Although retaining the entrepreneurs after the six months is not Start-up Chile’s primary concern, over 40% have in fact chosen to stay. The pro-business government is partly responsible for the high retention rate. Chile has a low 20% corporate tax rate and has fostered a “summer camp environment” with a vibrant community and strong network support. Furthermore, as Europe and the United States continue to suffer from sluggish growth, Latin America, spearheaded by Chile, is becoming of greater and greater interest to foreign investors. Ariel Arrieta, cofounder of NXTP Labs, an acceleration program that provides seed capital, consulting, and training to technological startups, argues that Latin America holds enormous potential as an untapped market with astounding growth prospects. Improving market conditions coupled with a very young population, has created a thriving climate for technology startups and consequently has attracted the attention of many global analysts and early stage investors that hope to latch onto prominent startups.
Start-Up Chile’s detractors criticize the program for funding foreigners (although the program is also open to Chileans) and many note that it’s still too early to see any real benefits from this program to the Chilean people. That said, the Chilean government should be commended for taking such creative actions and attempting to carve out for itself a place in the global economic market. It would not hurt the United States government, plagued by inaction and stalemates, to take Chile as an example and learn some lessons.