A hothouse for genius: a small software outfit is likely to put Colombian programmers on the map.

Cali, known for its salsa, women, soccer and the domestic sugar industry, is turning into a miniature Silicon Valley. A tech incubator begun in 2000 known as Parquesoft, in which 1,400 young programmers toil in 300 software development microbusinesses, Parquesoft has not only sold US$29 million in products since its founding but also broke a paradigm in the process: It lets young people with limited resources partake in the global economy.

Parquesoft has 11 more regional operations in medium-sized Colombian cities. The initiative is led by Orlando Rincon, a successful 43-year-old Cali businessman who grew up modestly and a leftist, now a software expert and anthropologist who lives for improving the quality of the lives of less fortunate Colombians. Famous for his simplicity, Rincon is only half-kidding when he suggests that Colombians, thanks to their heritage, are genetically ideal for programming. "The software industry is full of contingencies and demands that you think outside the reality you seem to face," he says. "That allows us to use the sneaky, indigenous part of our genes to perceive or sniff out things that aren't there, the African hunting gene for the long journey that is this work, to be persistent, and to have patience that hunters have."

Parqesoft has become a permanent stop for touring multinational executives and representatives of institutions like the World Bank and InterAmerican Development Bank, among others. "With my line of work, I come across a lot of countries and initiatives, and I can say that this one in particular is unique," says Martin Taylor, platform strategy manager for Microsoft.

One of the better-known companies from Parquesoft is Manglar, a four-employee outfit--two of which are in Russia--that invented and patented software that corrects distortion in a projected image that arises when a projector is poorly placed. According to iSuppli/Stanford, a consultancy, the worldwide market in 2006 for projectors will grow by 80% and in 2007 it will hit $17.90 billion.

"This is a totally unique technology that exists nowhere in the market right now," says Dan Miller of BizTank, an advisor to start-ups like Manglar in Sarasota, Florida. "We think there are many, multimillion-dollar opportunities to license this technology."

According to Lope Trujillo, the 38-year-old head of Manglar, his company realized that the world needed this kind of product thanks to Parquesoft. "Japanese manufacturers have told us they've been working on this for years," he says. "For instance, NEC has invested a lot in this and has achieved something more or less the same, but it requires hardware and raises the price of the project by $1,000."

Manglar has signed a deal with IMG, a marketing company that represents athletes such as Swiss tennis star Roger Federer, to negotiate an exclusive deal with some of the biggest projector manufacturers. According to Trujillo, by July there should be an agreement in hand. "We think this project could generate between $50 million and $100 million through licensing," he says. "This would make it Colombia's biggest software export."

Other software businesses to come out of Parquesoft include Immersion Software, which from its start three years ago began to create applications for the construction and security businesses and has since closed deals with companies in New York. A little more than a year ago the company began to develop video games. After much effort, Immersion closed a deal with a big U.S. firm that, between royalties and production agreements, could mean $2 million in revenue, according to Ernesto Galvez, Immersion's 28-year-old president. His 11 employees come from academic backgrounds as varied as sociology and electrical engineering.

"This has been a positive change in our lives and we suffered a lot to get here because before we closed this deal we were trying to close one with investors [from the sugar industry] that were very tough," says Galvez. "We were looking for just $150,000" in seed money.

In Latin America, Galvez says, there's no clear culture of venture capital and even less so in Colombia, where software development is an emerging industry. "When you talk to investors about the projects, they get really excited but then later they get scared and take a step back," he says. "It took us three years to achieve something we could have done in six months with the financing in place."

For now the objective at Parquesoft is for all of the companies to post combined sales of $100 million before 2008, says Rincon, who retired three years ago after selling part of OpenSystems, a software company founded in 1987 in Cali, with 200 employees and revenue of $14 million. "Next year we're going to have more than 150 companies going into a very aggressive phase," he says. "What happens is, the technology industries take three years to stabilize a software product, testing it in the market. In the fourth year is when the revenues really start to get interesting."

Rincon says that by then Parquesoft will have more than 400 companies with annual sales on average of $250,000. Considering they have on average four employees, each one could be earning $60,000 a year. "That's incredibly easy," says Rincon with his characteristic ease.

It's clear that Parquesoft's strategy is one-of-a-kind. In the first place, instead of branding each company, the branding is done as Parquesoft, which makes for big savings. In addition, many segments of the economy rely on Parquesoft as a brand since the incubator's companies serve many sectors, including health care, education, heavy industry, petrochemicals, scientific research, telecommunications and government, among others.

Unconventional. Another peculiarity of Parquesoft is that its businesses are focused on making lower-priced software. "There's no need for costly sales processes since it's so specialized and there are so few competitors," says Rincon. "We bet on making conventional software for very unconventional businesses. Here you'll find no investment applications, nor software for inventories."

The Parquesoft phenomenon, seen from a political, anthropological and cultural point of view is an answer to India's software model, Rincon says. "The Indian model consists of 10 to 12 Indians that are holding some 5 million of their countrymen hostage. It's not possible to call this an industry when one sells a month's work for $7,000 and pays the Indian engineer $150," he says. "So our cultural response is not three businessmen making slaves of a thousand Colombians but 500 entrepreneurs creating their own small businesses. This allows us to create business capacity and a politically thoughtful and democratically participatory model that is totally different."

Rincon believes that, despite their capabilities, history, culture and religion keep Indians from standing out, creatively. Yet the big opportunity in the software industry is innovation. "Today there are 3 million Indians working to solve the basic problems of the developed countries and this creates work but they are not the owners of those patents," he says. "They are slaves to the intellectual property of other countries. Parquesoft does not conduct assembly work; it creates intellectual property. The Indian model is slavish, medieval and colonial."

The model has fans in California's Silicon Valley, including William Musgrave Jr., President and CEO of The Enterprise Network, which promotes technology companies in the famed U.S. tech hub. "I saw more creativity in Colombia than I've seen in India," he says. "Parquesoft is a national asset. They are leading a revolution."

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ANDRES F. VELAZQUEZ * CALI