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To Compete in the Global Economy the Creation of a Digital Single Market in Latin America and the Caribbean Is Required

ECLAC presents study on the digital revolution in the framework of the Fifth Ministerial Conference on the Information Society being held this week in Mexico City.
Press Release
4 de August de 2015

A common bloc with a uniform normative and institutional framework would significantly support regional efforts for expanding the digital economy, which covers diverse areas, from telecommunications infrastructure (fixed and mobile broadband networks) to information and communications technology industries (hardware, software and ICT services), including the appropriation of those technologies by users.

Therefore in the document The new digital revolution: from the consumer Internet to the industrial Internet, the Economic Commission for Latin America and the Caribbean (ECLAC) proposes moving towards a regional digital single market which will allow taking advantage of network and scale economies to compete in a world of global platforms.

After more than a decade of investment efforts, incorporation of technical progress and digital policies, Latin America and the Caribbean has progressed in accessing telecommunications’ services, the use of applications and social networks and in the implementation of digital programs in the areas of education, health and government, ECLAC’s study says. The report will be officially presented during the Fifth Ministerial Conference on the Information Society in Latin America and the Caribbean, which is being held on August 5-7 in Mexico City.

The region’s countries progress at different speeds and fall strongly behind the developed economies, the report adds. The study describes the current digital revolution around the world, analyzes the strengths and weaknesses of digital access and consumption in the region and examines the main debates in terms of regulation, net neutrality and Internet governance, among other matters.

At the ministerial conference, the countries will define a new digital agenda to 2018, updating the Regional Plan of Action for the Information Society in Latin America and the Caribbean (eLAC), of which ECLAC holds the Technical Secretariat. That document, which will be analyzed by authorities and specialists in six working groups, especially warns regarding the growing impact of digital technologies on the patterns of economic growth, social inclusion and environmental sustainability.

According to the study The new digital revolution: from the consumer Internet to the industrial Internet, the region’s digital development faces problems due to the exogenous character of the progress in those technologies and the fact that these are linked to the economic structure almost entirely through private consumption. That is to say that “the production capacity of equipments, software and apps are very weak in comparison with advanced economies and are concentrated in two or three countries of the region.”

This reality is inscribed in a world that moves from an Internet centered in consumption to an Internet based in consumption and production. “Developed countries are trying to improve their manufacturing industry through new technologies and advanced robotics,” the report explains.

The region progresses in the Internet access, although with many differences among countries and within each. Between 2006 and 2014, the percentage of Internet users went from 20.7% to 50.1% of the population, a figure still well below the average of 81.8% in countries from the Organization for Economic Co-operation and Development (OECD).

The use of new technologies implies noticeably improving the conditions of access, particularly speed and latency. Most advanced applications require a broadband between 38 and 74 Mbps, although some uses are less demanding, among them the ones related to tasks such as preparation for emergencies and security.

The more demanding uses are those implying interactive video in 3D, for example, in scientific or education projects with real-time updates. The region’s lag in terms of 4G mobile connections and spread of fiber optic hinders the exploitation of advanced technologies. Overcoming this problem implies investment and coordination efforts that could be fostered through a regional digital single market.

The actions related to digital technologies implemented today in the area of production will define competitiveness conditions and, therefore, of job creation in the next decade in the region, ECLAC emphasizes. “Not being coupled to the digital revolution leads to a delay in the economic growth and social development,” the United Nations organization concludes.

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