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From Pablo Escobar To South America’s Silicon Valley

Visiting Medellin in Colombia today, it is hard to believe that this bustling city was once blighted by daily murders and famed for Pablo Escobar’s cocaine cartels and death squads. Rising to be one of South America’s technology hubs, Medellin is putting its business acumen to good use and is in the process of reinventing itself, as can be seen throughout Colombia. The second city of Colombia, after the sprawling capital of Bogota, Medellin is unfortunately to this day recognised as being the hometown of the drug lord, Pablo Escobar. However, this dynamic city with a plethora of cultural offerings and pleasant climate is thriving with innovation, business drive and ingenuity.

The Dark Days Of Medellin

Pablo Escobar made his hometown of Medellin the centre of his illegal empire which at its height supplied 80% of all America’s cocaine. With this illicit business engulfing Medellin, in 1991 during Escobar’s reign the murder rate was 381 per 100,000. Today’s most violent city in the world is San Pedro Sula in Honduras and even the shocking figures of 187 murders per 100,000 inhabitants are dwarfed by the Escobar era. Death squads would carry out their business in pure daylight and almost a generation of Medellin’s male inhabitants were wiped out. From this dark history known as ‘the dark days’ in Medellin, it is somewhat outstanding and miraculous the change that has occurred and has subsequently brought this city and its people out from the ashes!

Medellin’s Rise From The Ashes

In just over 20 years since Escobar was killed by the city’s police, Medellin has restyled itself as the Silicon Valley of South America and is today a tech hub and centre for innovation and science. Through a number of start up incentives along the Medellin River including favourable tax incentives, logistical support and government pledges, Medellin is certainly succeeding at what it set out to achieve. Hewlett-Packard moved their Latin America services centre to Medellin, and personal and healthcare giant Kimberly-Clark and Canadian animation company, Pipeline Studios also followed suit. In March 2013, Medellin received a boost by being named Innovation City of the Year by Citi, the Wall Street Journal and Urban Land Institute, beating finalists New York and Tel Aviv which is no small feat.

Colombia Turning Over A New Leaf

As the security of Colombia improves on a daily basis and with tourism on the rise due to a successful rebranding and marketing campaign by the country’s tourism board, investment has been flooding into Colombia. This has translated into an estimated growth of 5.1% in 2014 with the economy being based on largely oil, coffee, coal, tourism and flowers. The United States still remains the largest single foreign investor in Colombia with Britain in second although their recent bilateral trade and investment target of £4billion by the year 2020 will increase Britain’s presence. Following Nick Clegg’s visit in February with 40 businesses including HSBC, Rolls-Royce and Shell as well as University delegates from Dundee, Edinburgh and Warwick, he mentioned that Britain’s presence in Colombia and Mexico has been too small and modest and there is much Britain can do to make up for lost time. With the 2015 target of £1.5billion worth of trade and investment between the two countries already being met, there is no shadow of a doubt that the £4billion target will be reached and the relationship between these nations will continue to grow and develop.

Medellin’s Incentives

A projected $20 million is to be used to finance innovation schemes within Medellin this year and with 38% lower running costs than Colombia’s capital of Bogota, the innovation hubs scattered throughout the city are attracting a young, educated workforce.  Instead of throwing money and resources at unsuccessful socio-economic schemes to lower the rate of unemployment, the local government offers free computer programming lessons for 14 to 18 year old students as well as training in textile manufacturing and food production that are traditionally big industries in Colombia. For businesses looking to invest in Colombia and more specifically Medellin, they will be greeted with a ready to use office space with their internet connections and electricity included in the monthly rent of about $23 per square metre. They also get a 100% tax break for the first 10 years and although this scheme was initially aimed at foreign start-ups, Medellin has seen the arrival of businesses from Spain, Brazil, Chile, Canada and the United States.

Still Work To Be Done

In spite of the obvious turn around and bright future for Medellin and Colombia, the history of this city is never too far away. With the murder rate falling an impressive 80% from its peak there were still 920 violent deaths recorded in the city in 2013. This is a rate of 38 per 100,000 people whereas the UK recorded a figure of just 1.2. Whilst the city below thrives, the surrounding hillsides of Medellin are filled with poverty and widening the inequality gap between the contemporary skyscraper office blocks and the slums on the hillsides. There are however examples of some of the money that has filtered down to the slums springing up in the so called ‘comunas’ such as the building of libraries, connecting the poorer communities to the internet and installing cable cars to reach the most impoverished areas. Even though there is still much to be achieved in Medellin the city is certainly heading in the right direction to success and reforming itself from being known as the hometown of Pablo Escobar to the tech hub of South America.

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