Central America and startups.

Central America’s structural and cultural barriers

To put it bluntly, one of the main reasons we don’t talk much about web startups in Central America is that there isn’t that much happening. To start with, the region is home only to 41m inhabitants, distributed in seven countries (from North to South: Belize, Guatemala, Honduras, El Salvador, Nicaragua, Costa Rica and Panama.) Although these countries are quite diverse, with Costa Rica and Panama faring better, most have in common inequality, poverty of many and widespread illiteracy. The percentage of university students is also fairly low, limiting the talent pool for entrepreneurship.

Even among university graduates, wannabe web entrepreneurs are rare, mostly for cultural reasons. According to the Guatemalan web insider Stephanie Falla, most universities still prepare students to “work for someone else.” Of the people I’ve interviewed, they also all agree that Central American families strongly encourage their children to opt for corporate careers and aren’t supportive of ‘riskier choices’ such as startups.

In countries where children rarely move out of their parents’ homes before their late twenties, this family pressure has a strong influence, and most graduates end up “doing the right thing” and joining a large corporation. According to the Honduran entrepreneur Alejandro Corpeno, the main problem isn’t a lack of talent, but the fact that it gets “sucked in” by these big companies which can afford to pay more.