Start-ups survey ads, but government highlights progress

The administration of President Mauricio Macri is part of the achievements of the national government that has been presented to emerging companies, better known by their English word: "startups".

The head of state has already appeared in public several times with representatives of the Argentine "unicorns" (Mercado Libre, Globant, Olx and Despegar). In the middle of the year 2019, marked by inflation and recession, Macri bet on entrepreneurs for optimism at all tests that proclaims the Pro of his leadership in the city of Buenos Aires.

In this context, on March 12, the President introduced a Knowledge Economy Bill that he only sent to Congress on April 4.

This initiative aims to promote all activities related to the knowledge industry (software, biotechnology, robotics, audiovisual services, export consulting services, artificial intelligence and video games), replacing the law on software in force until the end of the year. of the year.

The promotion of the business will be done through the granting of tax incentives, which aim to double the exports of the business over the next ten years and to generate more than 200,000 jobs.

The initiative also provides for the reduction of the cost of labor and a reduction in income tax.

To gain access to the tax benefits, companies must prove that 70% of their business revenue comes from these activities promoted in the knowledge economy, in addition to allocating a percentage of the profits to the research or training and to export at least 13% of the generated.

The project aims to facilitate the recruitment and training of talent, promote exports and encourage innovation (R & D) and the creation of new businesses.

Rare co-investment

Incutex is a Cordovan accelerator that, since 2012, has been supporting technology start-ups in the growth phase with mentoring, support and investment, to develop them as profitable and sustainable companies with long-term impact.

Its "business creation" model adapts the formula applied by developed economies in Latin America to invest in entrepreneurial capital, guiding projects in their development and growth in a sustainable and evolving way.

In addition, since 2017, he runs open innovation programs jointly with companies such as Grido, Telecom, Bancor, Cadena 3, Promedón and Universidad Siglo 21.

Walter Abrigo, CEO of Incutex, explained to iProfessionnel that this project extends the benefits that the software industry had to other industries.

"The additional activities (software) envisaged are related to the audiovisual industry, biotechnologies, research and experimental development, aerospace and satellites, artificial intelligence, nanotechnologies, robotics and the industrial Internet, the Internet of Things, sensors, additive manufacturing, augmented and virtual reality, etc., "he said.

Abrigo has repaired a pending legal problem for startups: "Currently, contractor law provides for co-investment programs ranging from $ 1 to $ 1, which could be improved and badyzed in stages, because in countries developed, aggressive co-investment programs in projects in the early stages. "

"For example, 4 to 1 in Chile and 6 to 1 in Israel, it would increase the venture capital needed to develop innovation in different industries," he said.

Costs of the workforce

From the Association of Entrepreneurs of Argentina (Asea) have a more critical view. Manuel Tanoira, member of the Executive Board of the entity and spokesperson for public policies, acknowledged iProfessionnel that "the incorporation of the concepts announced by the president are the key to the country's development" and that one of the main strengths is the low level of taxation ".

"However, there were few people who finance these companies in the country, there is no investment culture in this type of business, if we do not encourage it and do not improve it, even if the chicks are born, we will not have to feed them, "he warned.

For Tanoira, "we need a more aggressive promotion of entrepreneurial capital and fundamentally of this industry, without investment, there is no growth".

Consulted on the diagnosis of the current situation of entrepreneurship and its predictions for this year, the spokesman of Asea said that "the tax burden and labor costs are a brake for the sector ".

This law is a balm, but not enough. Our neighbors invest more than twice as much in this, "in addition to" the big difference that exists with other countries "such as the United States, Israel, Singapore, South Korea and the United Kingdom. United.

L & # 39; uncertainty

While the initiative announced by Macri had just arrived on April 4 at the Congress, the Committee of Communication and Information of the Chamber of Deputies began to discuss on March 26 th projects of Extension of the Software Promotion Act which expires in December of this year. .

This rule should cease to apply since the tax benefits for the sector would be included in the new law.

This decoupling between the ministry of production and legislators creates uncertainty and fear.

The regulation of the new standard (as long as it is approved by Congress in the middle of an election year) can be extended by the number of agencies involved, including AFIP.

What the government says

In dialogue with iProUPMariano Mayer, Secretary of Entrepreneurs and Heads of the Nation, said the executive branch has promoted many of the laws favoring the development of startups and SMEs. And he responded to critics of the entrepreneurial arc.

In regards to co-investment, Mayer pointed out that there "exist different systems in the world" and that, according to the government, they were based on the experience of Israel and the United States. "Different models have been evaluated and we have come to the plan of the Entrepreneur Act and the tax incentive, the truth is that we think that a very important plan has remained," he said. he declares.

In addition, he pointed out that the country was very bad in some variables, such as entrepreneurial capital, globally and that Argentina was climbing markets.

He also highlighted the progress made in the regulatory framework and the implementation of the seed fund, which "had more than 1,000 projects supported, accelerators made their first co-investments and there was growth in several countries. areas, such as agtech and fintech ".

"In co-investment funds and tax incentives, several companies are already registered.We have very good companies and many others in the portfolio," said Mayer, who also highlighted the efforts of the company. State in a complex macroeconomic context.

Finally, he stressed that the Knowledge Economy Law was a standard for "the country's next decade" and had been developed after "studying the different models of the world, taking into account other sectors". of the knowledge industry ".

"Obviously, this project is superior to the software law, with fewer conditions to fulfill and some other problems," he added.

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