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ECLAC: Long-Term Sustainable Growth Will Only Be Achieved by Digitalizing the Economy

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13 September 2016|Press Release

The second session of the Conference on Science, Innovation and ICTs of ECLAC concluded today in San Jose, Costa Rica.


The meeting was attended by government officials, representatives from the private sector and specialists.
The meeting was attended by government officials, representatives from the private sector and specialists.
Photo: MICITT of Costa Rica.

Representatives of 18 Latin American and Caribbean countries that participated this Monday and Tuesday in the Second Session of the Conference on Science, Innovation and Information and Communications Technologies (ICTs) of ECLAC in San Jose, Costa Rica, agreed on the need to leap forward with the use of new technologies in the region’s productive processes in the framework of the implementation of the Sustainable Development Goals (SDGs) of the new 2030 Agenda.

The global economy is living through a recessive context that affects Latin America and the Caribbean. “We cannot wait for commodities prices to rise again,” said Mario Cimoli, Director of ECLAC’s Production, Productivity and Management Division. “It is necessary for countries to increase their productivity, and that can only be achieved by digitalizing the economy and productive business activities,” he stated.

During the regional meeting, Cimoli emphasized that “the digital economy is disruptive: it modifies employment, the professionalization of work, taxation and regulation models. Many goods that were not tradable become tradable.” At the event, participants concluded that the Internet of Things (IoT) is one of the main avenues for advancing towards a better transformation of economies, since it can improve health service provision and enable the building of smart, environmentally sustainable and integrated cities. Nevertheless, the IoT is turning into the new digital gap, which means that its development in the region must be urgently promoted.

The emergence of the Industrial Internet will completely change the global productive structure. “It is no longer possible to think about the economic system as we have been doing in recent decades. We are facing a new process in which production modes and models are changing,” Cimoli said. With regard to the region, he highlighted that it consumes many digital goods and services, but does not produce enough of them. “Latin America and the Caribbean has a window of opportunity to insert itself into this new economic paradigm. To do that, it must create policies and public-private alliances that enable a transition from the Internet of consumption to the Internet of production,” he said.

Countries’ competitiveness and future growth will depend on their integration in the global digital economy, said the delegates from ECLAC’s member states and the specialists from private companies who attended the meeting organized by the Economic Commission for Latin America and the Caribbean (ECLAC) and the Costa Rican Ministry of Science, Technology and Telecommunications, with the support of the German Agency for International Cooperation (GIZ) and the European Commission.

During the two-day meeting, attendees discussed matters such as the Internet’s disruptive effects on production, the on-demand economy, the expansion possibilities of small and medium-sized enterprises (SMEs) in the new technological scenarios, infrastructure for hyper-connectivity, and competition and collaboration in the industry, among others.

Over the course of the Conference’s panels, participants posed that governments should become a force for digital innovation; in this framework, Latin America and the Caribbean must generate its own model for an integrated, cross-border digital market, which would serve to boost and consolidate the expansion of the digital economy and foster scale in innovative business ventures. In addition to regional cooperation, international cooperation is fundamental for boosting the new technological paradigm.

During the session, ECLAC presented the document Science, Technology and Innovation in the Digital Economy. The Situation in Latin America and the Caribbean, in which the organization reveals that spending on research and development (R&D) in the region is minimal, not exceeding 0.5% of countries’ GDP, with the exception of Brazil, which invests around 1.2% of its Gross Domestic Product (2013).

Moreover, if the dynamics of R&D investment in Latin American countries between 2004 and 2013 are analyzed, stagnation can be observed vis-à-vis other emerging countries, the document warns.

Likewise, Latin America’s participation in the global total of personnel dedicated to R&D is small, at around 4%, according to 2012 data. In 2010, Latin American countries had on average 520 full-time equivalent (FTE) researchers for every one million inhabitants, in contrast to the situation in industrialized countries, which have between 2,000 and 8,000.

“In Latin America there is a shortage of researchers and personnel dedicated to R&D, due to the failings of educational systems and weak demand for scientific capacities. The region’s school systems do not produce results of the quality that more developed countries achieve, adding to, in some cases, low rates of educational coverage,” the document said.

According to ECLAC’s diagnosis, the boom in natural resource prices in the region was not accompanied by a strategic vision that identified science, technology and innovation as a key factor in development.

“Innovation must not only reduce the productivity gap with the developed world and favor equality, but it must also reduce the environmental costs of growth,” Alicia Bárcena, ECLAC’s Executive Secretary, summarized in the report’s prologue.

The Conference on Science, Innovation and ICTs was created in 2012 as a subsidiary body of ECLAC to promote the development and improvement of national policies, as well as bilateral, regional and international cooperation. The first meeting was held in Santiago, Chile, in June 2014. This subsidiary body of ECLAC will report to the High-level Political Forum on Sustainable Development, the main United Nations platform for follow-up and review of the 2030 Agenda and the Sustainable Development Goals.

Costa Rica now holds the presidency of the Conference’s Executive Committee, where it will be accompanied by Argentina, Chile, Colombia, Cuba, Curaçao, Ecuador, Nicaragua, Mexico and the Bolivarian Republic of Venezuela.

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