Recently the World Economic Forum launched its annual Global Information Technology Report (GITR), which highlights how countries in Latin America compare globally across the 54 different indicators of the Networked Readiness Index (NRI). The regional verdict: while some countries have begun to expand broadband infrastructure, improving connectivity across the region remains one of biggest barriers to development in the region.
There are successes at the country level, however, such as Chile, which ranks among the top quartile globally, due to the government’s consistent focus on expanding information and communication technology (ICT) infrastructure and spurring ICT usage. Panama is quickly moving up in the global ranks and is only eight ranks behind (at 43rd in the world), driven by the government’s recognition of ICT as a critical driver of economic growth. And Costa Rica, Uruguay and Colombia all merit kudos for focusing effort on increasing ICT adoption (of the Internet, mobile phones and broadband) as well as increasing affordability of technologies.
The event took place in Lima, Peru, a country which has recently enjoyed sustained economic strength and a vigorous business revival. That resurgence has helped it join the group of countries (Brazil, Mexico, Colombia, Chile and Panama) driving Latin America’s economic development.
The topics discussed at this year’s Forum were radically different to previous years. Macro topics like macroeconomic stability, fiscal discipline and exchange rate policies, which dominated discussions at previous summits, gave way to micro topics such as the resurgence of the middle class, the future of education, competitiveness, productivity, innovation and new models for maintaining sustainable economic growth. Most conversations also contemplated the need to move in the short term, from an economy based on natural resources and raw materials, to one based on value-added sectors.
This thematic shift is due, no doubt, to the successes in Latin America in the past decade. Indeed, during the last decade, the region as a whole has seen an unprecedented economic growth, at a time when other regions of the world have stopped growing or even decreased. One proof point: in the last 10 years, Latin America added 50 million people to the middle class, and moved 70 million people of poverty. It is expected that economic growth in the region will hover around 4% in the coming years.
From the perspective of information and communication technologies ICT, the opportunities are huge. Only 10% of the population in the region has access to a fixed broadband connection today. It is anticipated that in the next five years, 400 million people will gain access to broadband, 260 million of them through wireless connections. Large investments in infrastructure will be needed to realize these goals.
From the perspective of education and jobs, it is estimated that nearly half of the 589 million people in the region are aged less than 25 years. Innovative thinking will be required to deliver appropriate education to those young people, and to create 50 million new jobs for them in the next decade. This contrasts with the shortage of ICT professionals in the region by 2015, which we estimate will be approximately 300,000 trained professionals.
Jordi Botifoll participated as a panelist in the session “New engines of growth.” In this and other discussions, we talked about the role technology and the network in particular plays to increase the competitiveness of the region and to enable productivity increases.
It is during these times of prosperity and optimism, and when the winds are in our favor, that the region needs structural reforms that will enable the region to be more competitive. And for this it is important to undertake long-term investments in critical areas such as education, technology and infrastructure and thus close the competitiveness gap with other countries.
If we do not have major changes in this regard, the region cannot maintain sustainable levels of economic growth and social inclusion. According to the Global Competitiveness rankings from WEF, among the 144 countries measured by the report, the country with the best position in the ranking from Latin America is Chile (33), followed by Panama (40), Brazil (48), Mexico (53), Peru (61), Colombia (69), Argentina (94). Still a long way to go. There are new opportunities for the region, but also great challenges ahead.