Digital Divide could Widen in Latin America

More liberal trade, investment and technological flows in recent decades have brought many benefits to the countries of Latin America and the Caribbean. Nonetheless, simply achieving countries' macroeconomic stability has not been enough to capture and absorb the full benefits in the region. The process of creating technological abilities at the national level and of reducing productivity gaps compared to more developed economies has not been satisfactory, according to the report Globalization and Development, prepared by the Economic Commission for Latin America and the Caribbean (ECLAC).

The region's expenditure on science and technology remains low, hovering around 0.5% of GDP in most countries (with some noteworthy exceptions, such as Brazil and Cuba). Private sector participation is very low and there is an enormous gap between academic research and productive activity.

Moreover, the document points out that there is a lag in the ability to adopt and disseminate information technology, biotechnology and genetic engineering, which is noticeable when examining the transformation in innovation systems innovation in Latin America and the Caribbean.

This panorama is even more discouraging given the fact that in recent years, the region´s connectivity growth has been the world's fastest. Unequal access of different social sectors to this new technology is a concern. ECLAC warns that the risk of widening the domestic digital divide is greater within the region, than the threat of increasing the gap between the region and the developed world.

The report adds that an important group of these countries enjoy levels of connectivity that are higher than might be expected for their per capita income. That they have to some degree reduced the gap separating them from countries that are leaders in Information and Communication Technology (ICT) does not guarantee that in the coming years they will automatically integrate into the digital era, nor that it will become that it will become sufficiently widespread.

Although service costs have fallen, they remain an access barrier for most of the population of Latin America and the Caribbean. The still relatively low telephone connectivity among the lowest income strata and service costs are factors that block active participation in Internet for both poor households and small firms. The costs of purchasing computer equipment also remain high for lower income households and small and very small firms.

According to this UN Regional Commission, to prevent the digital divide from widening between developing and developed countries in light of slow and unstable regional growth, countries must make a special effort to avoid a situation where the economic cycle determines investment in technological capacities and infrastructure, causing obsolescence or a stagnation in this field of rapid global change.

The ECLAC report notes that to deal with globalization countries need an active approach that aims to maintain and expand competitiveness. This strategy must bring together efforts to develop technological capabilities, support for the transformation of productive structures, the development of productive chains and the building of quality infrastructure.

Strengthening national innovation systems must be one of the main objectives of any policy to systematically strengthen competitiveness, involving both the public sector and private companies. Companies producing goods and services must deepen their commitment to new technology development and to financing and carrying out research and development activities, while the public sector must ensure sufficient funding is available for basic research.

At the same time, it is not only important to have world-class technologies in export sectors and to advance toward regional and national productive chains that are denser and more sophisticated in terms of national excellence. Latin American and Caribbean countries must also improve average productivity throughout the economy, an area in which they are far behind developed countries. Digitalization of productive processes and a rapid and smooth transition toward computerized production is an urgent need throughout the region, allowing governments to take advantage of new ICT opportunities. The same occurs in the field of biotechnology, which would permit the rational, environmentally sustainable exploitation of natural resources. To do so, spending on research and development tasks should rise significantly, more technology information should be distributed, and incentives should be created to stimulate private spending in this area.

Finally, to improve equity in the transition toward an information society, other measures are also necessary, such as the provision of low-cost telecommunications services and easier access to digital networks and to computer infrastructure. Countries must ensure universal access by avoiding new forms of economic and social exclusion - the domestic digital divide. They should also speed up the creation of the critical mass needed to ensure that the digital organization of production is profitable. 'The concept of digitalization is not limited to Internet. It is essential to find cheap alternatives for access in order to connect the masses of Latin America and the Caribbean,' ECLAC points out.

Moreover, the entire ICT area is well-suited to regional cooperation, in particular through joint mechanisms for developing, consolidating and selling high-tech products and services, such as computer programs and long-distance education, along with the development of regional networks.