Telesemana.com | Digital economy: regional exports to reach US$140 billion by 2030

Telesemana.com | Digital economy: regional exports to reach US$140 billion by 2030

This article was originally published in Telesemana.com on 18 October 2022. 

The process of regional digital transformation is great, and although there is still a long way to go in terms of bridging the digital divide, expanding network quality and capillarity, device affordability and digital literacy, Latin America’s digital economy is flourishing. And the facts are clear: six key economies in this region are experiencing a $34 billion increase in annual turnover as a result of the export value of digital technologies (which was 0.8 per cent of total GDP in 2021).

Which economies are you referring to? Argentina, Brazil, Chile, Colombia, Mexico and Uruguay. But not only that, this value could quadruple to $140 billion by 2030.

The findings emerged from the latest report by the Business Council for International Understanding (BCIU) and Google by Alpha Beta and the Access Partnership, entitled “The Digital Race: Driving exports through digital technologies”, which warns that nations will need to build digital infrastructure, close the digital skills gap, promote digital security and implement trade facilitation measures.

But 64 per cent of the boost in these six economies comes from lowering the cost of accessing foreign markets through digital advertising and cost-cutting e-commerce platforms, while the remaining 36 per cent is justified by the creation of new digital solutions. The study itself describes this estimate as “a conservative estimate”, since it does not take into account the possibility of adding efficiency to export processes that digital technologies themselves make possible. Furthermore, it is interesting to note that the expectation is that small and medium-sized enterprises will reap the greatest benefits from this process.

To make this scenario possible, the paper warns that eleven strategies need to be addressed, marked by the direction and coordination of these processes by states, in addition to their strategic role in deploying infrastructure, improving access to the internet and closing the digital skills gap.

It also establishes the need to develop training programmes for companies to take advantage of digital tools, to implement frameworks for data storage and to promote digital security, among others.

But throughout the work, the role of states is highlighted, and it suggests fostering “collaborations across the region to ensure greater harmonisation of standards”, for example in digital trade and on issues such as cybersecurity.

“In Latin America, one example of an area where greater harmonisation should be explored is in the right to portability, which involves the right of users to take their data from one service provider and transfer it elsewhere. Currently, only Brazil, Panama and Barbados grant users the right to do so, and yet these three countries have different approaches to drafting laws related to data movement,” reads the paper, which can be found here.

In closing, it is worth remembering that digital transformation initiatives do not stand still, and operators have a lot to contribute to them. It is also worth re-reading the opinion column published a month ago in TeleSemana.com by José Otero, one of Latin America and the Caribbean’s leading experts on ICT and telecommunications issues, which asks whether 5G will narrow the gaps.

All in all, the challenge is great, as is the opportunity.

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