Today’s economic development business news frequently includes stories about local digital and technology start-up incubators. What’s happening here that attracts so much attention? Pure and simple, it’s driven by the ongoing quest for communities to support sustainable twenty-first century job creation.
During the industrial revolution the residents of many major cities benefited from full employment, the large employers prospered and the collective local economy thrived. Most people made a good living and the populous was satisfied. But over time, things began to change – slowly at first, the reports of unrest seemed like isolated incidents. Then it happens, the big revelation – the day of reckoning arrives.
With the news headlines lately about Brazil, it’s easy for those of us outside the region to get caught up in the image of a country going through a difficult, turbulent period. But it’s important to consider that what’s happening now in Brazil is ultimately a sign of positive change: an expanding middle class with higher expectations about the rewards they should reap from the country’s growing economy.
And in fact, that story—the tremendous economic growth happening in Brazil—is one of the more amazing pieces of good news from around the globe.
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.
I have a keen interest in the Latin American region because several of my closest friends and my respected colleagues are from this region. Also, internal market forces and global demand are accelerating the rate of data center projects, further heightening my interest. Last year, I visited the region where I got to see data center build outs and realized the extent of the “greenfield” opportunity. I very recently got acquainted with Daniel Garcia, a 12-year Cisco veteran and Security Specialist sales engineer covering the Latin American region. I found his insights most valuable and different to what I usually hear.
For Daniel the greatest difference between the Latin American Region and other regions is the number of Greenfield data center projects. But Daniel finds that many customers are looking for “cookie cutter” solutions that they implement into their environments without much customizing. This was something I hadn’t heard before but which makes excellent sense. The reason for this approach is that many customers lack in-house IT expertise and require proven solutions. The benefits of this approach mean less risk, less cost and with any validated solutions, far less time in production and testing. The downside is that each organization has distinct needs according to their business line and size, and their risk tolerance will vary. Daniel works with his customers to tweak data center reference architectures to provide customers with a tailored and secure data center environment. Read More »
I met Daniel last month in Mexico City. He is an outpatient at a drug rehabilitation center where we sponsor a Cisco Networking Academy. Daniel and I met at the center, and then went together to his home in one of the poorest parts of Mexico City. As we stood on the porch overlooking his neighborhood, Daniel told me that his family doesn’t believe he can make his way out of this life, can ever do something more. The odds are certainly low; making a different life for himself, a life he’s never seen modeled, would be a dream come true but also a miracle. Read More »