Latin America is a region of immense contrasts. It has vast reserves of natural resources but suffers from severe social inequality and economic volatility. The ineffectiveness of governments thrives in a region celebrated worldwide for its unique cultures and the creativity of its people. Low levels of socio-economic development oppose the high level of happiness of its population – attested by both research and foreigners who have a chance to visit the region. Such contradictions mark the region’s identity and are experienced daily in the lives of its more than 600 million citizens.

These antithetical tendencies have defined the past decade, which has not been easy for the region. Latin America has been losing ground in the global economy: the region’s share of global GDP shrank from 8.6% in 2009 to 7.7% today and most of its countries have struggled with macroeconomic volatility and a dependency on commodity prices.

Nevertheless, this period has brought some reasons for optimism. During a boom in the prices of natural resources, millions of households across the region entered the middle class and living standards improved. In addition, the worst period of volatility seems to have passed, with countries such as Brazil and Argentina showing incipient signs of growth, plus a slow but steady recovery in commodity prices since the beginning of 2016.

A set of companies managed to stand still amid the turbulence and seize the opportunity of a growing consumer market to achieve outstanding growth and shareholder returns. In a recent study, The Boston Consulting Group (BCG) identified and tracked the 100 most elite and internationally-minded of these companies, the 2018 BCG Multilatinas. These companies, all with operations beyond their borders, registered annual revenue growth of 5.2% as measured in US dollars, around three times higher than the average for all large Latin American companies. They are at the forefront when it comes to creating new value in services, responding to the demands of a growing middle class, and reaching borderless communities of connected customers.

Our project presents the list of 100 selected multilatinas, selected from 5,000 companies with operations in Latin America. To be qualified as a ‘multilatina’, the companies need to: have more than $1 billion in revenue, have grown faster than the regional average and operate beyond their national borders. This is the reports second edition - the first was in 2009 - and for the first time it includes Financial Institutions and a group of dynamic technology companies, the technolatinas.

The report reveals trends and transformations happening in the region’s economy. On the one hand, the share of consumer product and services companies has increased from 31% to 44%, driven by the expanding middle class; on the other hand, the number of commodity companies fell from 12 to 7, largely owing to the downturn in commodity prices. Manufacturing companies have also experienced a decrease in their share, while industrial goods companies are still over-represented in the region when compared to the S&P 500.

There is also more geographical dispersion in this 2018 edition of the report. The region’s main companies are still concentrated in the biggest markets, Brazil and Mexico, but both are losing ground to new entrants. Colombia has shown the highest increase rate in the number of selected companies; Chile is an outperformer for its size; and some small economies, such as Costa Rica, El Salvador, and Panama, are also increasingly represented.

This group of companies from diverse sectors could prove pivotal to achieving sustained economic growth in Latin America. There’s no positive outlook possible for the region without significant gains in investment and productivity - two of the main structural gaps the region faces. In the last decade, the rate of investment in multilatinas has grown faster than their peers. If this trend persists, these companies can directly boost market activity and create a social impact.

Multilatinas can also play a crucial role in enabling Latin America to thrive in a shifting global landscape. They serve as valuable nodes in the systems of other global enterprises, in a time of intense competition for international investment. At a time when the US, one of the region’s most important partners, is becoming more isolationist, the multilatinas can serve as bridges to other corners of the world and exemplify the benefits of integrating regional economies.

Finally, yet importantly, these companies can be a source of inspiration to other Latin American organizations in their quest for competitive advantage. BCG has identified five key success factors that have led these organizations to outperform their regional peers and achieve above-average growth:

1. These companies can have a more intimate connection with consumers, taking advantage of their strong, recognizable brands to build lasting relationships with customers.

2. They can overcome the complexities of the value chain as they are in a unique position to deal with the challenges of the region’s business environment. For instance, a multilatina airline found that its aircrafts were out of service for maintenance 60% longer than anticipated. One of the main reasons for this delay was the complex processes of imports, customs clearance and taxation. Among other initiatives, the carrier revised its governance model to better integrate multidisciplinary teams and developed analytic tools to better predict its use of materials and capacity. As a result, the carrier was able to reduce delays by around 80%.

3. Multilatinas orchestrate networks of innovation by being able to invest more in R&D than their peers, which results in more patents and new products. For instance, Brazil’s Braskem developed a polyethylene plastic produced from ethanol sugarcane — a renewable raw material – and then established a global leadership in bioplastics.

4. Multilatinas have been very successful in mergers and acquisitions, investing around $88 billion in the past eight years. Although creating value through M&A is not easy, multilatinas have gained experience through serial acquisitions by employing a number of best practices, which has allowed the shares in these companies to appreciate by almost 70% in the past eight years, compared with a 7% increase for other Latin American, frequent buyers.

5. Finally, multilatinas are taking a number of actions to overcome skills shortages which in some Latin American countries are among the most acute in the world. Several multilatinas have established training programmes in partnership with schools. Aerospace manufacturer Embraer, for example, collaborates with Instituto Tecnológico de Aeronáutica, a major engineering school in Brazil.

The challenges facing Latin American businesses are too many to be solved in the short term. In the meantime, the region’s companies should focus on their ability to navigate this complex environment. Multilatinas are good examples of how to deal with this complexity, build on strengths and have the power to push Latin America forward.