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National pride: how artificial intelligence "Made in Argentina" grows in the country and is exported to the world

National pride: how artificial intelligence "Made in Argentina" grows in the country and is exported to the world
What are the challenges for the firms that lead the development of AI. The export profile of a sector that adds value to the production chain
05.11.2019 18.29hs Innovación

While there is no consensus definition, the so-called "industry 4.0" is the idea of ​​rethinking production processes as a set of data that interact with each other. Until a few years ago, suppliers, consumers and companies each decided on their own and practically did not connect under the same decision scheme.

Now, this scheme is in the process of change and Argentina is part of a global reconversion in which there is a distinctive element that makes it possible: artificial intelligence (AI).

The embryo of this new paradigm dates from the nineties with the beginning of the registration of the data of the productive chain. Then, we had to wait ten years to manage them. Specifically, when the link between the physical and the digital began to take shape: the so-called "figital world".

"Since a good is produced until it reaches the consumer, a lot of fingerprints are generated that are then analyzed. That process is what gives rise to industry 4.0," says Ramro Albrieu, principal investigator at CIPPEC (Center for iProUP) of Implementation of Public Policies for Equity and Growth).

In Argentina, great advances are observed in what refers to "industry 4.0", especially in those sectors in which the machinery has sensors that provide data for predictive maintenance.

Thus, to optimize resources and gain in productivity:

- In the industry, several companies collect and analyze information that alerts, for example, if a machine can suffer a breakdown

- In the field, there are producers who have scattered sensors on their land that analyze real-time weather conditions

- In mass consumption, companies are observed that, through data analysis, plan the promotion of a product during the weekend

Behind these processes are AI-based systems that collate large volumes of records (Big Data). And behind those systems, a handful of national companies that compete globally to provide that service, profiling as a spearhead of an increasingly exporting item.

Revolution 4.0 made in Argentina

Globant is the leading local company in the development of solutions based on artificial intelligence. With a turnover of more than $ 650 million this year, the firm founded by Martín Migoya is the local figurehead of development in different fields of AI, such as natural language processing, smart analytics, conversational interfaces such as chatbots and recommendations engines, among others.

"We focus on understanding why we are trying to solve a certain problem and then think about what and how, seeking to generate successful solutions to be scaled to productive levels," says iProUP Patricia Pomies, CDO of Globant.

Inipop rose to fame in 2015 with the development of the first autonomous vehicle in Latin America. This project, in addition to providing an unparalleled marketing platform to make itself known, allowed the firm founded by Alejandro Repetto and Enrique Cortés Funes to demonstrate how sensors would become a central actor in the production process.

"We approach the gap between the power of the cloud and the physical space where there is a lot of relevant information. We collect it with sensors and generate a flow that goes from a data to an actionable one, applying AI logic", summarizes Cortés Funes to iProUP.

Last year Black Puma was born, by Patricio Pagani, a business administrator who returned to the country after living 15 years between Europe and New Zealand. Its startup, which in its second year will exceed US $ 2 million in turnover, is dedicated to the normalization and structuring of company data to improve the efficiency of its businesses.

"We provided an application model of artificial intelligence and advanced analytics to manage. Large companies were trying to generate an area, but they presented problems. We applied a work team and unlocked that," says Pagani himself in dialogue with iProUP.

These three companies (Globant, Inipop and Black Puma) are some of the local firms that already produce AI-based solutions and export their services worldwide. In the short term, they face two challenges: to overcome economic difficulties and compete in a world dominated by constant innovation.

Climbing the mountain: export profile in a crisis context

Motivated by a more competitive exchange rate and its know-how, Argentine firms that develop AI-based technology aim to expand their business portfolio. In particular, by clients abroad.

Currently, Black Puma works for firms in Latin America, the United Kingdom and Germany. Its CEO believes there is a clear opportunity for growth ahead. "Large companies that are not digital natives have advanced AI tools, but do not have data to take advantage of them," Pagani said in conversation with iProUP.

Meanwhile, from Inipop they indicate that they have already started their expansion to Latin American countries - such as Colombia and Peru - and that the goal is for 70% of their turnover to come from the region. For Cortés Funes, the development opportunity is set in the challenges posed by infrastructure.

"We have regional competitors that work in IoT (Internet of Things), but have assumed issues, such as connectivity. The limit is infrastructure and in Latin America, although there is a deficit, there is also an opportunity."

In the case of Globant, it exports more than 90% of its developments generated in the country to the United States, Spain and the United Kingdom, among other markets. In order to incorporate AI into its projects, it trained its developers on this technology.

"We were pioneers to create an area that nurtured this field of knowledge. We also launched our own artificial intelligence manifesto, which gave us the place of references for issues related to ethics," Pomies said in dialogue with iProUP.

"Tributarily, Argentina is very penalizing companies like ours," argues Pagani, who believes that with the pesification of income generated from abroad "a startup takes away all profitability."

Albrieu puts the focus on what is coming: "The question is whether someone is going to make a long-term bet and not six months. We are in a situation where no one can get his head beyond the short term."

Research and development, keys to compete

In a sector linked to innovation, the question that flies over is whether the country is in a position to position itself as an AI reference.

"The US and China are the great global players who are running a race in which Argentina cannot compete. But in sectors such as agriculture it has innovations associated with the use of this technology that are global frontiers," Albrieu points out in dialogue with iProUP.

In that same sense, Pagani points out: "The academic level is not bad, but compared to the rest of the world, as there is no systemic support, the ecosystem is relatively small. It is necessary to generate a boost to the activity.

For firms such as Globant and Inipop, the future is promising: "The country is prepared to position itself as a leader in this field. We are up to competing with the United States and China," summarizes Pomies. In the same direction, the CEO of Inipop says: "Argentina has highly qualified human resources and is here to compete with any company in the world."

"We attach great importance to developing products and services that can reinvent the industry," says Pomies about Globant's research and development policy.

Migoya's company is currently developing the "Augmented Globant" program, to harness the power of AI, retain its main developers and recruit new talent.

"100% of the profit goes to reinvestment. We are constantly running the knowledge barrier to be attentive to what is to come," says Cortés about Inipop's policy in that regard.

The same path is followed by Black Puma, which allocates practically all its profits in research and development. "You have to reinvest everything in growth and new opportunities," says Pagani, who says that the great "challenge is to find the professionals that accompany this process, associated with a greater turnover."

Despite an economic context marked by the crisis, Argentine companies focused on the development of artificial intelligence continue to grow and innovate. Investment in development and adaptation to the global market are the keys to understanding how a highly qualified sector bets on the projection of borders outside. On the horizon, 2020 and the two greatest challenges appear: export and grow.

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