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Latin America falling behind the rest of the world in the booming 'information economy'

Latin America falling behind the rest of the world in the booming 'information economy'

Posted by Juan Gavasa on May 03, 2014

The World Economic Forum released a report last week on Internet “readiness.” The comprehensive report looks at how prepared an economy is to benefit from information and communications technology (ICT).

In other words, how well is a country using the Internet?

Latin America comes out not looking great in the “Global Information Technology Report.” Costa Rica at least has managed to outpace most of the region. The country ranks third in Latin America (and 53rd overall), behind Chile (35th) and Panama (43rd). Chile, which improved its overall score this year and leads the region, still dropped one spot.

The region’s giants received a bleaker outlook. Brazil fell nine spots to 69th. Mexico plummeted 16 places to 79th. Argentina (100th) and Venezuela (106th) did not improve on their poor positions.

Costa Rica was stable at 53rd, but ranked 15th worldwide for affordable access to ICT infrastructure. However, the country was dragged down by unfriendly conditions for boosting innovation and entrepreneurship. Accordingly, Costa Rica’s lowest position came in effective law-making bodies (140th).

At the other end, Finland tops the rankings. The top 10 is made up of European countries (mainly Scandinavian), the “Asian Tigers,” and the United States, which places 7th.

Andrés Oppenheimer, of the Miami Herald, has a breakdown (en español aquí) of what this year’s rankings mean for Latin America.

My opinion: [Brazilian President Dilma] Rousseff and every Latin American president should read this ranking and be alarmed by it, because we are moving increasingly faster into the information economy (or, to use a trendier term, the era of “big data”).

Latin America is even getting passed up by “less industrialized Asian countries, such as Indonesia, Philippines and Thailand,” according to Beñat Bilbao Osorio, one of the co-directors of the report, who spoke with Oppenheimer.

“There are several areas in which many Latin American countries are falling behind, especially those that have to do with human capital, education, and skills, which are just as important as Internet infrastructure,” Beñat Bilbao told me. “Most people in the region use the Internet to write e-mails, but what’s missing is using the Internet in ways that have an economic impact, such as creating new business models or revolutionary companies, such as”

In other words, most countries in Latin America are Internet users, but are not using the Internet to create new ways of doing business, or new applications to use existing technology for more efficient uses.

Oppenheimer calls “big data” this century’s gold or oil. Countries better prepared to take advantage will prosper. And while Costa Rica is nowhere near the most negligent offender in the region, Latin America as a whole needs to reverse its free fall and do what “other countries are doing to benefit from the new information economy,” Oppenheimer writes.

Latin America

35. Chile

43. Panama

53. Costa Rica

56. Uruguay

63. Colombia

69. Brazil

79. Mexico

82. Ecuador

90. Perú

93. Dominican Republic

98. El Salvador

100. Argentina

101. Guatemala

102. Paraguay

106. Venezuela

116. Honduras

120. Bolivia

124. Nicaragua

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