Latin America has made great progress in bridging the digital gap but still faces significant challenges
There is no doubt that the trend towards the digitization of society is gradually reaching all corners of the planet, albeit at different speeds, depending on the region. In this sense, Latin America has made great progress in recent decades, but there is still a digital gap with the developed nations which requires it to face up to a series of political challenges, an issue analysed by Fundación Telefónica’s publication titled The Ecosystem and the Digital Economy in Latin America (downloadable free of charge in PDF and EPUB format).
This work, written in collaboration with the Economic Commission for Latin America and the Caribbean (ECLAC), the Development Bank of Latin America and the Centre for Telecommunications Studies of Latin America, performs a comprehensive study of the current state of development of the telecommunications of the different countries on the sub-continent, diagnosing the progress made and the shortcomings in order to make recommendations for the application of public policies.
The report’s authors focus on three elements of the digital ecosystem:
* Changes in the production methods with regard to both digital goods and products and their spillover effect on the rest of the productive system.
* Changes in user behaviour and their relationship with knowledge production.
* An increasing economic and social impact.
Focusing on Latin America, it is clear that the countries are following the trends in the industrialized countries with the adoption of digital consumer behaviours, bridging the general and local gaps between the countries in the region and between the urban and rural areas.
Between 2006 and 2013, the number of Internet users as a proportion of the population of Latin America more than doubled, from 20.7% to 46.7%. However, this figure differed significantly from the OECD average, which stood at 79%. Similarly, half the population of Latin America could not access the “network of networks”.
Another significant factor is that mobile broadband is more widespread than fixed broadband, something which can be put down to the diversity and affordability of mobile devices and the greater coverage of mobile networks. In 2013 average mobile broadband penetration in OECD countries stood at 76% while the figure for fixed broadband was 29%; the respective rates for Latin America were 24% and 9%.
As for the quality of access to the networks, the average broadband download speed in Latin America stands at 7.26 Mbps, while the figure for countries like Japan, France and England exceeds 30.00 Mbps. In the region, only four countries (Uruguay, Chile, Brazil and Mexico) lie above the Latin American average.
Moreover, the analysis of Internet traffic volume clearly indicates the importance of platforms and contents developed outside Latin America, although Latin American news sites have also been detected, as well as one case of e-commerce and a social network of Latin American origin, all of which register a high volume of traffic.
The study concludes that Latin America has significantly gained ground in the last decade in terms of its digitization and occupies a leading position within the emerging world. Gradually, albeit at a slow pace, it is bridging the gap with the industrialized world.
The two main kinds of deficiency hindering the strengthening of the digital ecosystem in the region are the following:
* The provision of infrastructure.
* The availability of human capital to advance in the field of innovation.
The problem centres on the different speeds at which the digitization components are evolving.
Accessibility to the networks is the most dynamic variable, given that lower prices may make it increase significantly.
However, this rapid growth in demand is not accompanied by the deployment of the infrastructure necessary to cover it, because it takes longer to perform the latter.
The other element of the model, the human capital associated with innovation, is still evolving at a slower pace than investment in infrastructure, given that, to a great extent, it depends heavily on fundamental changes in the educational system and the relationship between education and the productive system.
For this reason The Ecosystem and the Digital Economy in Latin America places much of the responsibility for bridging the digital gap in Latin America on public policies, which can influence the decisive structural factors in the mid and long terms.
