Ecuador Diversifies Economy Through New Andean Smart City
Pro Ecuador, Ecuador’s foreign investment agency, is promoting the newly developed city of Yachay as a unique investment opportunity for American companies seeking a technologically advanced, environmentally friendly location for high-tech research, computer and production industries.
Ecuador designed Yachay to attract businesses looking to generate knowledge, transfer technology and expand regional and global operations. The city is equipped with smart infrastructure connected to a cloud-based information center through a wide range of links and sensors. It is also home to Yachay Tech, a technology-oriented research university intended to develop a highly educated work force.
“As we looked to diversify Ecuador’s economy beyond oil and agricultural exports, we created Yachay, a city built for 21st-century commerce and trade yet also designed to be both people-friendly and environmentally sustainable,” said Hector Rodriguez, Yachay’s CEO.
At 18 square miles, Yachay, the City of Knowledge, is divided into four geographic sectors: agro-tourism, knowledge, biotechnology, and industrial production. Linking knowledge development and private-public innovation partnerships, the city also features several state-of the-art research centers.
“Yachay is an investment in the future of Ecuador and South America,” said Rodriguez. “By streamlining investment and development processes, building strategic relationships with education, technology and government partners, we intend to strengthen the continent’s future by making Yachay an international center of innovation and development.”
Yachay has been designated a Special Zone for Economic Development by the Ecuadorian government. As such, companies doing business in Yachay receive comprehensive tax benefits, including a five-percent income tax reduction, tariff exemption on foreign goods, and tax exemption on currency outflow for payments of certain imported goods and services made abroad.
Foreign investors in Yachay also benefit from a dollarized economy; government-supported developments in the IT, life sciences, renewable energy, nano-sciences and petrochemical industries; and a pro-business environment and an easy-to-navigate regulatory system.
According to the United Nations Economic Commission for Latin America and the Caribbean, Ecuador’s economic growth is expected to outpace that of Argentina, Chile, Mexico and Brazil. Ecuador also enjoys a positive trade balance with the U.S. thanks largely to oil exports, and, at two percent of GDP, it is investing in higher education at the level of a first-world nation. The country also cut its unemployment rate to 3.8 percent in 2015 from five percent 2007.
Companies like Cisco, Toyota and China Telecom, among other international enterprises, have already signed on to invest in Yachay.