Opportunities to accelerate the development of a regional digital ecosystem in Latin America

During the past five years, digitalization in Latin America has contributed USD 195 billion to the regional Gross Domestic Product (GDP), that is, 4.30 percent of the accumulated growth, and has generated more than 900,000 jobs annually. Although digitalization advances quickly in the region, there are still significant challenges such as local development, the development of applications  for the productive sector, and the promotion of network reliability and safety. 

During Casetel's forum, Mauricio Agudelo, ICT and Telecommunications specialist at CAF, stated, "The reduction of the digital gap may be achieved by means of public and private sectors. For this, it is necessary to address the structural inefficiencies in the ecosystem through best practices at a public level, and a better institutional development" 

According to the study "El ecosistema y la economía digital en América Latina" (The Ecosystem and digital economy in Latin America), sponsored by CAF, the Economic Commission for Latin America and the Caribbean (ECLAC), cet.la, the Ibero-American Association of Research Centers and Telecommunications Enterprises (ASIET), and the Telefonica Foundation, an increase of 5 points of the digitalization index would lead to an increase of more than 17 percent in the region's innovation index. 

In this respect, the challenges to accelerate the development of a local digital ecosystem in Latin America are:  

• Adopt new practices in public innovation for the development of new businesses 
• Solve the inefficiencies of private incubation 
• Identify the areas to focus the development of products and services to achieve critical mass 
• Solve the coordination failures in public investment 
• Generate incentives for an increase of risk capital investment 
• Promote investments of development banks 
• Solve the gaps in human capital 
• Develop a comprehensive industrial policy for the development of digital industries 
• Solve the fragmentation of institutions in charge of developing public policies