Marktrapport19 december 2022

Tech Market Study: Panama offers opportunities for Dutch companies in Digital Technology

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Tech Market Study: Panama offers opportunities for Dutch companies in Digital Technology

According to the recent study "Digital Tech Sector in Panama, Business Opportunities for Dutch Companies", conducted by Holland House Panama, Dutch companies in digital technologies have good chances to conquer the Panamanian market in sectors such as Logistics, Health, Fintech and Government.

This is because the Digital Tech industry in Panama is still in its infancy and the great need for technological solutions in which Dutch Digital Tech companies excel.

Panama is a Regional Trade, Logistics and Financial Hub with the highest purchasing power and economic growth in Latin America. As an extension of this, the country also wants to develop as a Digital Hub. With an excellent climate for the establishment of tech companies (beautiful tech parks with many incentives), the 2nd highest fixed internet speed on the continent, the convergence of 8 fiber optic cables under the Canal and a high penetration of mobile subscriptions, it has some nice trump cards for this. The IT market in Panama reached an estimated 1.42 billion in contribution to GDP in 2020.

The Netherlands is one of the largest investors worldwide in Panama. ICT is the second-largest investment sector for Dutch companies and is growing. Dutch & Dutch Caribbean tech companies such as Dutch VR, Elsevier Health, Ibis Management and W.E.M. are already doing business in Panama.

The study mentions a number of promising Panamanian sectors with a need for technological solutions, in which Dutch IT companies excel:

  • Logistics: Digital transformation is seen as key to improving the competitiveness of the Panama Canal and its ports. The Panama Canal plans to invest $500 million in projects that use new technologies (sensors, AI, AR/VR) to improve efficiency. At ports there is a need for (improvement of) information systems, real-time tracking & tracing, security solutions for ports, green technology, big data and cybersecurity solutions.
  • Fintech: Panama has one of the highest percentages of people without a bank account (the so-called “unbanked population”) in Latin America. This provides opportunities for IT solutions aimed at the financial inclusion of the population (a market of USD 2.61 B. and CAGR of 16.8% 2022-2027). In terms of technology solutions for financial institutions, there is a need for services for online banking platforms, data analytics, the digitization of KYC and smart contracts. There are no fewer than 70 banks in Panama.
  • Digital Health: The total revenue in the e-Health segment is $43.79 million in 2022 with an annual growth rate of 18.50% (CAGR 2022-2027). Panama is implementing a comprehensive digital health system, consisting of the following technology programs: Digital Clinical History System; Digital System of Medical Prescriptions; Digital Medical Appointment System; Digital Telemedicine System and Digital Hospital Management System. A state-of-the-art City of Health is currently being completed in Panama City at a cost of USD 1 billion.
  • Government: The government has an ambitious digital transformation strategy full of initiatives that has led it to progress in the use of technology platforms and digitization of procedures. They want to further improve this in terms of quality, responsiveness and user experience. There is also a need for solutions for data exchange, digitization of documents and procedures, biometric solutions, software and mobile apps for government departments.

Due to the increase in cyber-attacks and the large number of critical infrastructures in Panama (canal, ports, financial system), Cybersecurity is a cross-cutting theme that comes back as a high priority in all the above areas.

The study also provides concrete information and tips for seizing business opportunities and entering the market.

Source: Holland House Panama