WorldCity Business Magazine

CEO RoundTable: Breeding Ground

by WC

A breakfast meeting of South Florida executives sparked a robust debate about whether Latin America is a better petri dish for innovation than the United States.

“The biggest advantage of the United States is all the resources and infrastructure. The biggest disadvantage is that when you have those resources, you don’t have to be as creative,” said Lee Lovely, vice president and general manager for Stryker’s Latin American operation.

“Latin America is a tremendous breeding ground of ideas and concepts,” added Pablo Trench, CEO of promotional agency Promored. “In the United States you read the same magazines and everything is all about the United States.

“When you live in Latin America, the world is your reference point. You know what’s going on in, say, Hong Kong,” he said. “You’re part of a bigger world.”

Lovely manages the Miami Lakes office of Stryker, a global medical device manufacturer that is pushing its business deeper into Latin America, and oversees the operations of Stryker offices in seven Latin American countries. The company’s headquarters are in Michigan.

Trench’s company, meanwhile, got its start in Argentina. Two years ago its headquarters were moved to South Florida to take advantage of the growing demand for promotional activities and materials used to market to U.S. Hispanics. Trench said the U.S. office is also ideal for working with multinationals with Latin American regional headquarters in South Florida.

The lively exchange by the two men and three other executives came in September during a CEO Roundtable, WORLDCITY’S monthly breakfast with four or five top executives from multinationals in unrelated industries. They meet to discuss business, trends and the developments that keep them awake at night.

The decision makers at the breakfast discussed how Latin Americans embraced certain technology like cell phones and online banking before their counterparts in the United States.

“Latin America is an amazing place for talent and ideas,” said Trench.

*Tapping tale *

The discussion of innovation was sparked by a common problem among the executives at the breakfast: finding the right local talent for their companies’ needs.

Manuel Montero, CEO of Saf-T-Pay, an online service that allows consumers to make payments over the Internet without using a credit card, said his company has no problem getting the technological tools it needs. “But we simply cannot find qualified workers in the United States,” he said. He cited poor ethics and education as some of the reasons.

For its finance and accounting work, Saf-T-Pay hires former bankers in Mexico. “There are lots of experienced bankers who have been put out of work by mergers and acquisitions,” he explained. Customer service for the Miami Beach-based company is done in Peru.

But the executive whose work was most affected by employment issues was Barbara Burnette, the regional vice president for the east zone Canada to Florida at Ajilon Finance Solutions. Ajilon, the specialized employee placement division of Swiss-based human resources company Adecco, find high-level executives, often as consultants, for multinational companies.

“Consulting services and staffing are in high demand,” Burnette said. “Our issue has been primarily finding the talent. Florida’s unemployment rate is 3.2 percent, versus 4.6 percent nationally. And we’re looking for professionals for Latin America.

“It’s very difficult to find good talent,” she said, adding that she interviews 100 potential candidates a month. “You can bring in people. But the challenge is bringing in quality people.”

She noted that rising energy prices and inflation have prompted corporate decision makers to hire fewer permanent employees, relying instead on consulting contracts. She called mergers and acquisitions “the hottest niche” for recruitment right now.

At Studley, a real estate services company that negotiates leases on behalf of corporate tenants, Thomas Capocefalo said the company has good talent on staff “but there’s a problem with a lot of mediocrity on the advisory side.”

Capocefalo is the New York-based company’s managing director in South Florida. He said escalating costs related to local real estate are already affecting its clients. “Insurance and other expenses are going up at a fast rate,” he said. “In 2004, office space was $30 per-squarefoot. Today that’s $40-per-square-foot.”

Despite those factors, and the rising cost of labor and material for construction, he said business is healthy. “A lease will invariably come up for renewal,” he explained.

*Good business but *

Like the other executives, Stryker’s Lovely said business is booming. The company said more active lifestyles and longer lives are behind much of the revenue growth for the medical device company.

“Technology is more advanced now, so someone who might have waited until they were 60 or 70 to have a procedure will now do it at age 50,” he said. “And instead of having four surgeries, maybe they’re having five.

“Plus, for Latin America, economic and political stability in the region has been a big help,” he added.

Still, for all the good news, Lovely worries. “Business development is the biggest challenge. In Brazil, for example, we have problems with lack of transparency. In Chile we sell our products directly but in Brazil we go through distributors and we can’t always determine who the real decision maker is.”

Trench, too, said business has been growing at a healthy clip. “Latin America is doing well. Chile is good,” he said. “Mexico is super good. They spend more on marketing in Mexico than anywhere else.”