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South America has been an interesting landscape for tech culture. With most of South America’s markets newly industrialized or emerging, tech has served to accelerate markets into the digital age. Chile has been at the forefront of Latin American development, namely because of low corruption and political stability. It is also the sole representative in the Organization for Economic Cooperation and Development (OECD) from South America, having joined in 2010. Colombia and Peru are also in talks to join the organization, which is composed of mostly high-income economies.

The Wall Street Journal reported that Chile is fostering its own tech hub that could rival Silicon Valley, aptly nicknaming it “Chilecon Valley.” Start-Up Chile, a government program aimed at developing Chile’s budding tech market, was also launched in 2010 in the nation’s capital, Santiago. 18,000 startups from 130 countries have applied, and 1,050 from 77 countries (20 percent of them Chilean) have been accepted into the program, which requires companies to operate for six months in the country. However, most of the foreign firms (80 percent) exit after six months. The program has given out $40 million in grants to entice firms to stay.

While the investment hasn’t translated into success yet, tech firms and venture capitalists cannot ignore the growing Latin American market. Venture capitalists invested $526 million in Latin America in 2014, almost eight times than what they invested in 2010 ($63 million). However, this investment has gone towards Mexico and Brazil, the two biggest economies in Latin America. Entrepreneurs have criticized Chile for its lack of investors.

“The investors and the advice that you receive there and here is a little different,” said Aljosha Novakovic, who ran Medko Health in Chile for one and a half years as part of the government program. “There aren’t that many sophisticated investors, people that are true start-up advisers, in Chile. So there isn’t as much incentive to stay,” he added, indicating that Chile needs more tech-minded investors for the program to take off. The World Bank has also echoed Novakovic’s concerns, and added that while there is promise, there are currently no long-term prospects. “That is where Start-Up Chile concerns me a little bit,” said Alberto Rodriguez, World Bank country director for Chile. “They are helping a lot of companies to start, but the evidence of their growth is very limited.”

Chile’s economy grew only 1.9 percent last year because the demand for its top export, copper, has fallen. Chile has also taken a hit in ease of doing business—Colombia, Mexico and Peru have since surpassed it in the 2015 Ease of Doing Business Index. Start-Up Chile’s critics, however, may have found the solution to the program’s woes—build off of existing strengths, such as mining and agriculture.

“The idea that Start-Up Chile could create a Google in Chile is nonsense,” said Gonzalo Rivas, the head of the Chilean government’s national innovation council. “You need to build from where you are really strong. If you’re able to sell to a mining company operating in Chile, you know that you are going to be able to sell to any company in the world,” he continued. Two success stories include Biofiltro, an organic waste water treatment technology that was deployed in Chilean wineries, and Bureo, which makes skateboards from fishing nets recycled from Chilean’s fishing industry.

Start-Up Chile has recently amended their conditions for acceptance in the program. The program is going to give firms an additional $100,000, but the firms have to incorporate in the country, stay for at least a year and provide mentoring to prospective entrepreneurs among other requirements. “Economic development in Chile was losing opportunities, and we thought we could do something about it,” said Sebastián Vidal, the executive director of Start-Up Chile. “We strongly believe the entrepreneurs can stay and create companies in Chile and then grow abroad.”

Rodriguez also cited that Chile needs to focus on regulations and infrastructure, while Hernan Cheyre, former vice president of Corfo (the government agency that oversees Start-Up Chile) said that President Michelle Bachelet’s government policies could hurt start-up prospects in the country. “If we just focus on more public grants for projects but don’t create the conditions to have an open field for anyone to challenge an established competitor, like Steve Jobs did with IBM, we will get nothing,” he said.

Could Chilecon Valley be an ideal place for a Latin American tech boom? Start-Up Chile’s recent program changes, government cooperation, and tech investors willing to invest money into the Chilean market could create the conditions that make Chile a hub of tech and innovation.

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