Rethinking venture capital and innovation in emerging markets

By Alejandro Cercio, MBA ’27

Before arriving in Mexico over the summer, my first year at Cornell’s Samuel Curtis Johnson Graduate School of Management had already pushed me to think about markets through the language of capital, incentives, and growth. Even so, I assumed venture capital worked more or less the same everywhere. Instead, I learned that every entrepreneurial ecosystem reflects the realities of the economy it serves, and that understanding those differences is far more useful than comparing every market to Silicon Valley.

A different benchmark

Mexico City challenged many of the assumptions I brought with me. I had always associated venture capital with frontier innovation, breakthrough technologies and companies pursuing global scale from day one. While those ambitions certainly exist in Latin America, I came to appreciate that the region’s entrepreneurial ecosystem is shaped by a different set of opportunities.

Innovation in emerging markets is often driven by local needs and structural challenges. In some cases, the most important companies are adapting proven models to markets where logistics, payments, distribution, trust and access to credit still create meaningful friction. That does not make the innovation less important. In many cases, it makes it more relevant.

Too often, we measure ecosystems by how closely they resemble developed market dynamics, but this experience helped me understand that the region is not simply a smaller version of the U.S. market. After this summer, I no longer think resemblance to developed markets is the right benchmark. The better question is whether an ecosystem is producing solutions that matter within its own context.

Why artificial intelligence matters

That conclusion became even more compelling as artificial intelligence adoption accelerated across the world. The pace described in the Stanford AI Index helped frame what I was seeing in Mexico as AI moved from research labs into companies and everyday products. Smaller teams can accomplish more with fewer resources, products can be tested faster, and entrepreneurs can validate ideas with significantly less capital than only a few years ago.

This does not eliminate the advantages of places like San Francisco. Access to talent, capital, networks, and early adopters still matters enormously. But AI may reduce part of the structural gap that has historically separated emerging markets from the world’s leading innovation hubs.

For Latin America, that represents one of the most important opportunities of the next decade. If the cost of building software-enabled businesses continues to fall, more entrepreneurs across emerging markets will be able to test ideas, serve local customers, and reach scale without needing the same amount of early capital.

That possibility matters because emerging markets do not lack talent or ambition. What they often lack are the institutions and market conditions that allow that talent to compound. Technology alone will not solve those gaps, but it can make them easier to navigate.

This became especially clear through conversations with founders and operators across the region, as well as through my work on State of AI in Latin America report. AI is already influencing how smaller teams think about productivity, customer acquisition, product development, and the speed at which they can move.

A personal lens

Coming from Venezuela, this experience carried an additional meaning. I grew up in an environment where many of the financial mechanisms that support entrepreneurship elsewhere were largely absent from the economic reality. Access to venture capital, private equity, acquisition financing, or even traditional credit was limited. As a consequence, my generation did not develop the same intuition for the many ways businesses can grow beyond simply selling more or raising prices.

Experiencing those conversations firsthand with Latin American founders helped me understand not only how venture capital works, but also how profoundly institutions shape the way we think about business itself. It also reminded me that emerging markets cannot be understood only through their constraints. They must also be understood through the creativity that those constraints produce.

I arrived in Mexico expecting to learn how venture capital operates in the region, but I left with a deeper appreciation for the diversity of innovation across emerging markets and renewed optimism about the role technology can play in helping them close part of the gap. In that sense, the Cañizares Center for Emerging Markets turned an academic question into a lived experience.

Silicon Valley will continue to lead many of the world’s most important technological breakthroughs. But after this summer, I am convinced that Latin America will play a much larger role in shaping the future than many people still assume. Its path might not look identical, and it should not have to. The next chapter for the region will be stronger if we recognize innovation in more than one form.

About the author

Alejandro Cercio is an MBA candidate at Cornell’s Samuel Curtis Johnson Graduate School of Management. Before Cornell, he worked across fintech, asset management and strategy across the Middle East and Latin America. He holds a master’s in finance from IESA School of Management and a bachelor’s in economics from Universidad Católica Andrés Bello. Cercio’s interests include venture capital, emerging markets, financial innovation and the role of technology in expanding opportunity and supporting long-term development. He is also interested in rebuilding opportunities across Venezuela.