Forging Ties with Chile

In South America, students are finding new opportunities for global business experience

written by TAMAR LADDY

 

In a climate where emerging markets are a top priority for global businesses, one market has surfaced as the front-runner for foreign investment and trade: Chile.

The World Economic Forum currently ranks the country first in Latin America on its Global Competitiveness Index, while the World Bank's ease of doing business index places Chile at number one among Latin American and Caribbean economies. 

Expansive Market: The opening video captures a time-lapse of Santiago at night. Chile is highly ranked as a business-friendly environment.

"Chile is known for its business-friendly environment and its transparency, two key elements for successfully entering a market," says Alejandro Wolff ('78), United States Ambassador to Chile. "Because of this stable economic and business environment, foreign direct investors look at Chile not only for its local market, but also to develop a base to cover other growing economies in the region."

Elevating business Santiago's most iconic feature is the dramatic high-mountain backdrop, hovering over the city's old colonial architecture and its gleaming new downtown skyscrapers.

Chile and California have a long-standing relationship that dates back to the early 1960s, when the Kennedy Administration encouraged bilateral ties with Latin American countries. And since 2008, the Chilean and California governments have collaborated on "The Chile-California Plan: A Strategic Association for the 21st Century," which includes a wide range of objectives, such as developing human capital through academic exchanges and institutional partnerships; promoting research, development and innovation; and increasing trade and business opportunities.

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Ambassador Wolff notes that Chile and California share much in common, including a Spanish colonial history, thriving wine industries, regular seismic activity and energy and water challenges. "These similarities provide a common foundation for discussions, and an immediate sense of familiarity which helps business, education, scientific and other relationships flourish."

In addition to wide-ranging partnerships with California-based businesses and universities, the Chilean government is actively seeking to lure international entrepreneurs to Santiago with offers of early-stage funding and hassle-free visas. Since its debut in 2010, the government-backed Start-Up Chile has awarded nearly 500 grants of $40K apiece to entrepreneurs willing to bootstrap their businesses in Chile.

Noah Ornstein (JD/MBA '12), who participated in Start-Up Chile while enrolled at UCLA Anderson, used the seed money to launch El Teatro, a theatrical film distribution company. Ornstein was already targeting Latin America as a potential market for his venture, whose goal is twofold: to give local theater owners the flexibility to program films based on regional preferences, and to enhance the movie-going experience with interactive technologies, such as apps that play alongside films.

In order to participate in Start-Up Chile, each company's founder must spend six months on the ground in Santiago. Aside from that, there is no obligation to maintain a presence in Chile beyond the half-year mark, and likewise no obligation to hire from the Chilean talent pool. This begs the question: Why invest in companies that may jump ship?

The answer lies in the program's mission: to foster a culture of entrepreneurship in Chile, thereby transforming the country into the premiere Latin American hub for innovation.

"We encourage entrepreneurs to come to Chile because we believe they can share their knowledge, mindset and contacts with Chilean entrepreneurs," says Start-Up Chile's Executive Director, Horacio Melo. "We need them to come here and help us with the cultural changes we want to take place in
the country."

The El Teatro team also included UCLA Anderson MBA candidates Jesus Martinez ('12), Kerim Onder ('12) and Craig Muhlrad ('13), all of whom traveled to Chile at various points during Ornstein's six-month stint in Santiago. "We learned a huge amount, and it wasn't anything we could have learned from stateside analysis or a classroom environment," Ornstein says. "The connections we made, the contact with filmmakers, the on-the-ground learning–that was incredibly valuable."

While the El Teatro team entered into discussions with Chile's second largest film distributor, they were ultimately unable to make inroads into the local market. One of the biggest challenges, says Ornstein, was the time it took to come up to speed on local business practices. "Latin America functions in a more formal way," he explains. "People like knowing who you are before doing business with you, so you'll sit down to have a meeting and end up talking for twenty to thirty minutes about your personal histories."

Eric Kriegstein (MBA '12), who won seed funding from Start-Up Chile for a company called SeatUp, bypassed that hurdle by recruiting a Peruvian native, Christian Daly, as a co-founder. Daly played point on the ground in Santiago while Kriegstein and another team member, Austin Wiley (whose father, Rich Wiley ('80), is one of UCLA Anderson's 100 Inspiration Alumni, worked from Los Angeles to develop the centerpiece of the business: a mobile auction platform that enables airlines to auction off in real-time any first-class and premium seats and unused inventory in the final hours before a flight takes off.

In Chile, SeatUp received support and networking help from Guillermo Tagle ('91), also one of the school's 100 Inspiration Alumni, who founded an investment bank in Santiago. Through his introductions, the team met with representatives from the airline industry including LAN Airlines, one of Chile's leading air carriers, and American Airlines. Ultimately, however, their concept did not take off. As with so many startups, the founders took the lessons they learned from the SeatUp experiment and moved on to other business endeavors.

For those interested in applying for a Start-Up Chile grant, the application process for the next round of funding begins in June. To qualify, companies must be in an early stage of development–defined as less than two years–and must be scalable and globally minded. "We have a very wide range of industries represented in the community, but thinking globally is a must," Melo says.

For more information on the GEMBA for the Americas program, please visit uai.ucla.edu.

Anderson's Partnerships and Programs with Chile

Judy Olian, Dean of UCLA Anderson, and Alfonso Gómez, dean of the business school at Chile's Universidad Adolfo Ibáñez, sign an agreement for a joint Executive M.B.A for the Americas. Looking on, from left to right, are Chancellor Gene Block, Chilean President Sebastián Piñera, former Gov. Schwarzenegger, and Andrés Benítez, rector of the university of Chile

UCLA Anderson already has roots in this fertile emerging market. The business school has partnered with Chile's Universidad Adolfo Ibáñez (UAI) in offering the Global Executive MBA (GEMBA) for the Americas, acomprehensive EMBA for experienced business professionals looking to maximize their ties to the region.

Bob Pettit ('89), Executive Director of GEMBA for the Americas, says the 15-month program is designed to provide an insider's view on doing business in the region. Each session offers an intensive classroom-learning experience coupled with guest speakers and visits to local companies.

"We have an opportunity to highlight the innovation and entrepreneurship in California, along with our access to the Pacific Rim," Pettit notes, "We want to make sure there's a fit for people who understand the economic potential of the region, and whose current or expected career responsibilities aremultinational or multicultural."

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