RIO DE JANEIRO, BRAZIL – Despite 10 unicorns, a phenomenon of stock market capitalization, regional and global projections such as the Mercado Libre, and a wealth of domestic talent that is even exported, Argentina is losing ground in the most promising sectors of the world economy.
These are diverse activities but can be grouped as “knowledge-based” industries and services.
From software development, semiconductor development and manufacturing, media and entertainment to retail, provided that the activity is carried out along the lines of Amazon, based on the new weapons of systematized knowledge, such as the use of robots, large databases, algorithms, and artificial intelligence.
The truth is that Argentina, which for years has boasted that its “knowledge industry” sells some US$6 billion annually to the world and has a special promotion law, today export revenue per capita is only a quarter of what Uruguay obtains and between a fifth and a sixth of what Costa Rica and two new Central and Eastern European “tigers,” Romania and Poland, sell abroad.
While Argentina had per capita sales of “knowledge-based services” of US$134 last year, Uruguay had US$526, Costa Rica US$720, Romania US$711, and Poland US$796.
In 2020, Argentine exports in this sector amounted to US$6.07 billion. “Professional, business and technical services” accounted for the largest share (60.8%), “computer services” for 29.9%, “personal, cultural and recreational services” for 5.7%, and “intellectual property” for 3.5%.
OTHER PRICES
Job losses occurred over a decade. Between 2010 and 2020, Argentine exports in this sector grew at a low rate, 1.3% per year, compared to 7.3% per year in the same period for Costa Rica, 9.5% for Poland, 12.6% for Romania and 13.7% for Uruguay.
The pace of Argentine sales of “knowledge-based services” was also lower than the world average of 5.8%. As a result, Argentina’s share, which was 0.37% of world exports in this sector in 2010, will fall to 0.24% by 2020.
The figures come from a study by Jorge Vasconcelos and Guadalupe González, researchers at Ieral, who used data on stock market capitalization, exports, and other indicators to analyze the dynamics of the global economy by sector.
For example, it was found that global “market capitalization” (i.e., the value of all companies listed on the world’s stock exchanges) reached $66.9 trillion in the middle of this year, equivalent to almost 70% of global GDP, 58% more than in 2017.
In 2010, Argentina exported 27% more of the “knowledge-based services” than Romania. In 2020, it will be less than half, despite having more than twice the population.
OPEN THE FIELD
More important, however, was the internal dynamics of the phenomenon: of the 24 sectors identified by the MSCI index (Morgan Stanley Capital International), the share of companies from the “media and entertainment” sector increased from 2.4 to 7.3 percent of total capitalization, the “semiconductors” sector from 2.8 to 5.1 percent, and the “retail” sector from 3.5 to 5.8 percent.
Other sectors that gained in importance were technology, sanitary equipment, and software and services.
The largest share losses were recorded by the sectors “Banks”, with a decrease of 3.8 percentage points, and “Energy” (- 2.8). Other sectors that lost ground in value terms were food and tobacco, telecommunications, insurance, and capital goods.
Vasconcelos and González point out that the growth rate of knowledge-based services exports in the last decade represents “a very unfavorable decoupling given the post-Covidian world.”
A world in which, in the last four years, the stock market value of companies related to knowledge has increased from 18.4% to 23.5% of world market capitalization. This would decouple the Argentine economy from the world.