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Beyond Connectivity: Inclusive Digital Transformation in Latin America and the Caribbean


Beyond infrastructure and internet access progress, digital connectivity is a fundamental tool for innovation, inclusion, and competitiveness in Latin America and the Caribbean. However, the journey towards harnessing its advantages is far from straightforward; mere digital infrastructure does not ensure prosperity. Find out the digital status of the region and learn from experts about the opportunities, challenges, and examples of how to connect better for the benefit of all. 

William Maloney, Chief Economist for Latin America and the Caribbean at the World Bank, discussed with high-level experts the opportunities emerging from digital technologies to provide development possibilities for vulnerable and marginalized communities. For this to happen, governments must make connectivity affordable, reliable, and accessible while developing the skills to use new technologies.

Gabriela Frías: How are you doing? Good morning to all and welcome. Thank you, as well, for joining us in this conversation organized by the World Bank to discuss the growth prospects for the Latin American and Caribbean region, and one of its challenges in development, which is inclusive digital transformation. I am Gabriela Frías, and I will be moderating this talk for the next few minutes. Yesterday, on Wednesday, the Economic Office, or rather the Office of the Chief Economist of the World Bank presented the regional Economic Report, which is published before the annual meetings of the World Bank and the International Monetary Fund and is used to update the prospects for economic and social growth in the region, and to also discuss the challenges ahead. This year, the economic report is also analysing the challenges of inclusive digital transformation, and I will be joined today by Bill Maloney, the World Bank's Chief Economist for the Latin America and Caribbean Region. Hello, Bill. We are also joined by Eleonora Rabinovich. She is the Head of Government Affairs and Public Policy for Spanish-speaking Latin America for Google. Welcome, Eleonora. And Yolanda Martínez is also with us. She is the Program Lead for the International Telecommunications Union's GovStack initiative. Welcome and thank you. And let us start with the macro scenario to understand the macroeconomic perspective. With you, Bill, we have spoken about the economic perspective that was presented yesterday, which estimates a regional GDP of 2% for this year, which is somewhat better than what was forecasted before, but we are well below other regions.

Bill Maloney: Thank you, Gabriela. Yes, exactly, that is exactly the case. The good news is that we are doing better than we expected six months ago, but we are still at about 2% this year, 2.3% next year, 2.6% the year after that. This is not only insufficient in order to promote social mobility and eliminate poverty, but it is about the same as what we experienced in the 2010s, when we were growing at about 2.2%. In other words, is there something other than the global situation that is holding us back and that we need to look at? What structural changes do we need to encourage our growth?

Gabriela Frías: And on this occasion, where are these gaps? Which ones are you aiming at, Bill?

Bill Maloney: There are several. First, it is worth realizing that this not only affects growth, but we lack dynamism in several areas. First, for example, we are doing much less trade than expected given our FTAs and our proximity to large markets. Second, with all the movement towards reshoring and everything we learned during COVID about the problems of global value chains, our foreign investment income is very similar to what we had ten years ago. That is to say that, in one way or another, we are not taking advantage of the international context, and it is part of the same problem with low growth levels, and we are also seeing some particular gaps, as you said. Obviously, we continue to have infrastructure investment below about regions similar to ours. In terms of human capital, not only do we lack a skilled workforce, as businesspeople say, but we lack technicians and tech experts, engineers, entrepreneurs, because we are lacking in the full range of human capital. I would say, lastly, that it is necessary to keep the rules of the game more or less stable and understood by all the stakeholders because nobody is going to invest if there is a lot of uncertainty about where the economies are headed. So, we have these challenges to begin with.

Gabriela Frías: To begin with, let me ask you a question regarding trade. I want to understand a little bit more about how much this geopolitical fragmentation that we are discussing is already hitting Latin America when it comes to trade flows, Bill.

Bill Maloney: Well, so far, I have not seen much in terms of fragmentation of our exports. Right now, we have a division, in other words, Mexico is still very much oriented towards the United States, while the rest of South America has turned a little bit more towards China, right? This really is an important development. But the interesting thing is what is going to happen in the next few years because several countries could become platforms to do more nearshoring with the United States and Europe. We are talking about Mexico, Colombia, and several others, right? But, to make the most of this opportunity and the opportunities that come along with climate change in our comparative advantage in our super-green matrix, in our lithium reserves, and things like that, we need to have a very well-articulated and energetically pursued vision.

Gabriela Frías: This is very important. We will ask Eleonora and Yolanda to talk to us about how articulate that vision is, Bill. But evidently, we are now in very complex months as well. Before moving on to our other two guests, I would also like to ask you whether you can see if we are doing a little better than we were six months ago or not, in a global context that remains adverse. Tell me about that context, what we are looking at in the coming months, and, of course, in your opinion, how can our region make the most of that digital economy, Bill?

Bill Maloney: First, the global context will remain adverse for a little while longer. Again, the good news is that the region has done very well in fighting inflation. We already have, with the exception of several countries, inflation levels below the OECD, and this shows good management of the economy by the monetary and fiscal authorities. But, in the more developed world, say, in the G7, we are going to continue with high interest rates for a while. Commodity prices are going to remain high, but not as high. And no one knows what is going to happen with China, which is very important to us now. So, in the medium term, there is a lot of uncertainty and little dynamism. On the subject of digital economy and connectivity, which is the subject of our report, we see three areas where there are many possibilities. First, there are new industries that can emerge. You can see, for example, in the mini boom in unicorns that we have experienced in recent years, which are based precisely on digital platforms, that there are opportunities, and that Latin American countries are taking advantage of these opportunities. But it is a mini boom. We need much more. Also, obviously, digital connectivity enables technology transfer both to existing businesses, and also to farmers and many other parts of the economy. This, in the medium term, can stimulate growth. Second, digital technology can make the government much more responsive to the needs of the population and make it more inclusive, right? We have seen, during the pandemic, that, although it was not possible to physically go to school, school could continue in many cases. And that was purely because of connectivity, because of the possibility of doing things from far away. You can see in telehealth and many other areas that digital technology can improve government performance. For example, taking out your driver's license, right? It is much easier to do it with the computer. So that is the second thing. The third thing is that, by using e-procurement systems, it is possible to reduce government spending, to make it much more transparent ─transparent and efficient. So, given the estimate that we can save more or less 4% of GDP in terms of government efficiency, this allows us to reallocate those resources to more important needs. So, there are many possibilities. But I want to close with two things before we hear from the experts. First, there is the highly likely possibility of exacerbating inequality in our economies. To take precisely that example from COVID, education during COVID, we lost more or less a year and a half of schooling. But not for everyone! If you have access to the Internet and a computer, you can do well. If you live in a neighbourhood where there is no connectivity, then no, you lost that year and a half. So, we can see that, in the medium term, we are going to have an even bigger gap between the rich and the poor in the country. The second thing I want to emphasize is that this is not a magic bullet. You cannot just install the cable and be done with it. We also have to invest in skills, in knowledge, in complementary factors to make the most of this opportunity. And this also requires effort and resources.

Gabriela Frías: What you are saying is very important in terms of solutions and opportunities. For example, 4% of GDP could be saved if we use technology to provide solutions as authorities and as governments. And as Bill tells us, the situation will get worse in terms of inequality before it gets better, but the idea is to catapult technology to bridge those gaps and accelerate that gap closure. Let us talk to Eleonora Rabinovich now. Eleonora, how are you doing? With regards to what Bill has said in terms of this diagnosis, tell us about how Google is seeing the evolution of this digitalization in the region, what has been achieved, and, specifically, the gaps that you can see.

Eleonora Rabinovich: Thank you very much, Gabriela. Good morning and thank you very much to the World Bank for inviting us to participate in the conversation about the launch of this report. Will's diagnosis is very interesting, and we share many of the views that emerge from this report in terms of the challenges, but also the opportunities that digitalization brings to our countries. First, let me start by saying that, last week, Google celebrated its 25th anniversary. We are celebrating our anniversary and have been in the region for almost 20 years. We are very enthusiastic in terms of the opportunities that Latin America can bring, and also Latin America’s opportunity to develop thanks to digital transformation. For example, in 2021, Latin America was the region with the highest growth in e-commerce with three countries, Mexico, Argentina, and Brazil, leading this growth. A few years ago, we at Google also wanted to measure the potential economic growth that countries can achieve thanks to digital transformation, so we commissioned a report called Digital Sprinters, which covers several countries in emerging markets. According to that study we launched two years ago, the six major Latin American economies could achieve an annual economic impact of up to US$1.37 billion, which is roughly 23% of GDP, through policies that enable the full use of digital technologies. In other words, according to the figures in the report Willy presented and our report as well, the impact that digital transformation can have is huge. At this point, you were asking about the opportunities and challenges we see. Of course, there has been enormous progress in Latin America in many of the indicators, but there are still gaps and challenges. The first is associated with connectivity or Internet access. And although there have been significant advances in the last decade and there are countries in our region that are on par with high-income countries in metrics related to Internet access, there are still millions of people who do not have access to the Internet because they live in remote or rural areas. That is, the gap in access between people living in urban areas and people in rural areas is still incredibly significant. For example, according to ECLAC, this gap can reach 25 percentage points and, in some cases, almost 40 percentage points. That is a lot, isn't it? The second aspect, as was also mentioned earlier, has to do with digital skills, because not only is it necessary to have Internet access and good connectivity, but also to be able to take advantage of this technology. We need this access and utilisation to be inclusive and sustainable. This is a crucial issue in our region. 50% of the companies looking to hire for formal jobs, which is a lot, cannot find employees with the right qualifications. We know that technology will create 10 million new jobs by 2025 in the region. So, there is an enormous opportunity to take advantage of this employment creation associated with digital technologies. I would like to mention to you that, a few months ago, we were at the launch of the first Latin American Artificial Intelligence Index, which was developed by CENIA. There is a lot of talk about artificial intelligence today, and I recommend everyone to read this report. In this index, one of the findings was that one of the main gaps for adopting artificial intelligence technology is precisely in talent development, in the availability of human capital. So, there is an enormous opportunity here for companies to work in conjunction with the private sector, with multilateral organizations, with academia, and with civil society to expand human capital in our region. Obviously, and finally, the region can and must also move forward with designing public policies that support the development of the digital ecosystem, such as the Cloud First policies to promote a move towards the cloud, which have a lot to do with the digital transformation also within governments to offer more modern services, to be able to have better communication with citizens and more efficient governments.

Eleonora Rabinovich: Finally, from our point of view, addressing these opportunities and challenges requires a joint effort. It cannot be done by companies alone, it cannot be done by governments alone, nor can it be done by multilateral organizations. We must work together. Last year, you were also there to witness it, Gabriela, at the Summit of the Americas, our CEO, Sundar Pichai, announced Google’s commitment to invest $1.2 billion over the next five years in four areas where we, along with other stakeholders, are confident that we can help the region to thrive: that is in digital infrastructure, digital skills, entrepreneurial ecosystem, and building inclusive and sustainable communities. We have been working in the region, we have been investing in digital infrastructure, such as submarine cables, data centres, and cloud regions, and we have been supporting the generation and expansion of digital skills through many programs and initiatives that I will mention later. We are sure that, by continuing to work together, both with governments and multilateral organizations, we will be able to help the region move forward on the path of digital transformation, which will bring many benefits to Latin America.

Gabriela Frías: This is of the utmost importance, Eleonora, thank you very much. Just to go back to the first point of those I mentioned, in terms of amount, $1.3 billion, understood as trillions in English when I was talking about that opportunity. Just to be clear, is that correct?

Eleonora Rabinovich: 1.3 billion dollars is the opportunity we see if the countries we take into account in the report adopt policies and make full use of digital technologies.

Gabriela Frías: Okay, 1.3 would be billions then, just to have that figure clear. I will get back to you in a moment, but Yolanda has been nodding along for a while now. Before I ask you a specific question regarding what you are hearing from Eleonora and Bill, Yolanda, as the person responsible for the GovStack initiative, before you tell me about this initiative and what it implies for the region, what first impressions or comments would you like to share with us?

Yolanda Martínez: Thank you very much for inviting me to participate in this conversation that I am very passionate about. First of all, I am all for digital transformation, and I think that Latin America, in the last decade, has taken digital transformation as a government policy. This is reflected in the fact that more than 90% of the countries in the region have a digital agenda as part of their national plan. This is especially important because it provides a path to follow. It allows the local ecosystems to articulate what these priorities should be. This also means a strengthened institutional capacity. In most of the countries of the region, we see ITC ministries, ITC agencies, and digital government departments, which are responsible for articulating digital priorities, defining standards for the design of services, interoperability, data management policy, and, above all, how to allocate those investments in technology in government to fulfil this agenda. We also see the importance and boom in digital channels due to the pandemic as very significant. We are starting to see very innovative initiatives, for example, Panama, which adopted the European Union standards for the issuance of COVID certificates and was able to reactivate flights very quickly; there was also a boom in the use of mobile devices for electronic transfers and the ability to support many families through effective transfer and support programs.

Yolanda Martínez: We also saw a very important surge in the use of digital media for skill development and the continuation of its use in education. So, I think that what we learned in the pandemic and this boom that has occurred as a result of the mass use of AI has brought the focus back to our countries reviewing their agendas. These were generally built before 2020, i.e., before COVID and before the AI boom. And now, as Eleonora rightly mentioned, all countries are conducting consultative processes to review, even at a constitutional level, very basic issues, not only in terms of guaranteeing universal access to broadband and the Internet, but also in terms of neurorights. I believe that this speaks of how digital transformation has become a government policy, and how the agencies responsible for articulating compliance with the agenda have been strengthened. And also, this speaks of something particularly important, which is regional cooperation. Latin America, through organizations such as the digital agenda articulated through ECLAC, eLAC, works with a planning mechanism that is reviewed every three years through the GEALC Network, which is the Network of e-Government of Latin America and the Caribbean. Very important initiatives have been launched regarding mutual recognition, regarding digital electronic signatures, which are key to enabling digital trade, as Bill mentioned. Mutual recognition of import and export certificates throughout many years has worked through one-stop shops when it came to foreign trade. What areas of opportunity do we see? Well, we should not lose that momentum. We must strengthen data governance policies, mechanisms, and the use of standards, which is much of what we work on at GovStack so that all our digital public infrastructures are interoperable, that is, so that we respect the sovereignty and autonomy of countries, but that, at the same time, we can build our digital platforms with common standards that allow the exchange of information securely. And this is key to enabling a digital economy based on data processing. Another key area of opportunity is sustainability. The International Telecommunication Union, in collaboration with the World Bank, has just published the Green Data Centre Guide. We have also just published a guide on handling IT procurement processes based on sustainability principles. The benefit of the digital era is that it also consumes a lot of resources, so we must have these sustainability policies in place. So, there are great advances, but it is also important to continue capitalizing on them to strengthen the institutional capacities of countries in terms of appropriation and use.

Gabriela Frías: I am going to give you a little challenge, because Bill's comment regarding the macro environment and the three recommendations or the three areas that he identifies seem to be calling on the whole region to be more ambitious, not just to make a count of where we are and see whether we are complying with the basic minimums. If we were to be more ambitious, you mention the necessity of having an articulated vision for the private sector and the public sector regarding the lack of access, for example, to the Internet, which is not universal access, and the issue of widening the inequality gap, etc., and this articulation between the public sector and the private sector. So, if we were to be ambitious in the next six months, what are the most urgent actions to take? At the end of the day, as a journalist, I come to you to say "Well, we are delivering, we are getting to a certain place," but from what Bill Maloney is describing to us, this context urges us and the authorities to be a little more ambitious. What does it mean to be more ambitious in the region? What should we do in practical terms? Who wants to start? Eleonora?

Eleonora Rabinovich: This is an excellent question. Completely off the agenda, though, Gabriela, so I am going to quickly think of a response. But I believe there is one central aspect that has to do with the development of human capital. As Bill said, connecting people is not a magic solution to generate economic development, but we have to invest in our human capital to take it to the next level. And this implies two things. First of all, close the existing gaps in access to digital skills. To mention, for example, the gender gap, which is huge in our region and which I believe should call upon both the public and private sectors. Second of all, to develop our human capital for the jobs of the future, or rather, for the jobs of the present. I believe that these two dimensions are very important to articulate both the public and private sectors. Let me mention a figure that caught my attention in the World Bank report presented this week. According to the report, only 28% of the region's population has basic digital skills, compared to 64% in OECD member countries.

Eleonora Rabinovich: This is a figure in the report that I think should call all of us who work in the region into action. Another striking finding of the report is that 38% of the Latin American population live in places with mobile internet network coverage, but chooses not to access the internet, and almost 50% cite cost as the main obstacle, which means these factors are also associated with the use of technology. We were talking earlier about the gender gap, which is an issue that personally interests me a lot as a woman who works in the field of technology, so let me also add a figure about this. According to ECLAC, four out of every ten women in the region have difficulty accessing connectivity. This includes both access and digital skills and, obviously, this means that women are less qualified, and it reduces their chances of accessing well-paying jobs. So, the multiplier effect of this lack of access and lack of digital skills is enormous. What can we do? For us, it is a fundamental pillar not only in terms of the announcement we made last year at the Summit of the Americas regarding our investment in the region but also in terms of the work we have already been doing. Since 2017, thanks to our Grow with Google programs and donations from, which is our philanthropic area, we have trained almost 8 million people in digital skills throughout the region and, this year, we awarded more than 7,000 scholarships for career certificates in some countries in our region to help people access training which allows them to participate in high-demand tech areas. They learn about Big Data, machine learning, and cyber security, among others. Personally, I am enormously proud of the initiatives we are conducting to empower women in the region, many in collaboration with civil and some with governments. For example, we recently had the opportunity to travel to northern Argentina to learn about projects that will be funded thanks to our contribution, along with UN Women, of 1 million dollars to provide not only digital but also financial skills to women in vulnerable contexts. We are working with UN Women and with a very important organization in the region called Promujer as well. Finally, we talk a lot about AI, but it is very important to be prepared to make the most of AI and the opportunities that it will bring to our region, not only to generate a lot of products and services it’s already improving, for example, products and services we use daily in the case of our company, but also for other companies, and to be able to use products and services that will allow us to address problems with huge social relevance, for example, climate change or health issues. So, it is very important. It is very hard not to be enthusiastic about all these possibilities that AI brings, but, as we said before, we must work on developing human capital and also work together with the private sector, civil society, and ourselves to be able to take a step forward in what for us at Google, at the moment, is crucial, which is to approach AI with a daring but also responsible attitude. So, I believe digital skills, plus the opportunities presented by AI as a game changer in terms of using and making the most of technology and the challenges we still have in terms of connectivity, are very important aspects that we all have to address together in the region. 

Gabriela Frías: Thank you, Eleonora. Thank you for this answer. Yolanda, we cannot help raising our eyebrows when we see the opportunity of that 4% of GDP in savings in terms of transparency, but there are so many other things that can be done. How would you close your presentation? In practical terms, what should we do?

Yolanda Martínez: In very practical terms, good service design practices should be prioritized. Today more than ever, we can apply methodologies to completely transform how people interact with the government. When talking about good service design practices, I mean articulating the effort of bringing a process online through customer journeys and facts of life. And that is one of the biggest challenges in the public sector because the administration is used to working in silos. This service is from Department A, the other one is from Department B, and the third one is from Department C. And using the citizen or the entrepreneur as an errand boy is what significantly affects productivity and corruption. So, in order to accelerate this process of entrepreneurship and doing business, it is very important that the services are not only online, but that they have gone through a redesign process where the needs of the people have been taken into account, where they have been significantly simplified thanks to interoperability and where nowadays a person can open a business without having to set foot in any government office. And I think this is something that we can start working on now because most governments in the region are already doing it. What do you need to achieve scalability? The use of common standards. What does it mean? Well, if we already have an identity mechanism, why should it only be used in government? We should be able to use that same identity mechanism, which is what we call digital public infrastructure, to be able to identify the person when opening a company in the government, and also when opening an account in any banking institution in the country. To continue growing in terms of financial services coverage, we need to be much more efficient in the use of payment engines, which is another big block in digital public infrastructure. The same happens with interoperability ecosystems, wherein the same standards that enable digital services in government are standards that are used so that digital services can also be developed in the public sector under those same standards. This is related to what we do at GovStack: standard-based technical specifications and definitions about application interfaces, usually called APIs, which help governments to use these technical specifications to develop their core digital components and to be able to accelerate this process at scale to digitize services. In other words, in the past, most government departments and ministries developed ad hoc systems: each system had a way to identify users, make payments, and electronically sign to get services. When this started to grow exponentially, it was unsustainable from an investment standpoint. There was no financial resource that would allow this type of digitization in silos. Being able to technologically articulate this investment effort and use of these large technological blocks by public and private sectors is essential to achieve the scale and greater simplification to provide services to citizens.

Gabriela Frías: Thank you, Yolanda. Thank you, Eleonora. I would like to give the floor to Bill Maloney to give us some final thoughts based on what has been said, Bill, and as I say, to encourage this sense of action, of doing with the urgency that the region needs in terms of lost time and what needs to be done to improve the situation for millions of people. What are your closing remarks?

Bill Maloney: Well, thank you all for this very fruitful discussion. From Yolanda, I got two very important things. First, I got that we have many opportunities, but we cannot lose our momentum. It is not enough, for example, to install a cable; there are a lot of complements as well. We have to rethink many of the ways in which we do things. That includes establishing standards so that there is interoperability between, for example, ministries and things like that; that is absolutely crucial. And I think that if we are going to try to use digital technologies in the education system or the health sector, we need to rethink how those systems are designed so that we are not imposing something on top of some other thing that did not work well to begin with. I think this message of complementarity is key. Eleonora also highlighted a lot of the opportunities, but also the fact that digital technologies can make things worse if we are not mindful to include everyone. The fact that 38% of people live in places where there is connectivity, but they are not interested in connecting says that there is a process of socialization and education that we have to do. The fact that most of those people are women implies that they are not gaining the skills and education they need to take advantage of new technologies in the future, which may widen the gender gap. And I believe that the whole issue of human capital is essential to accelerating growth and also ensuring that everyone is headed in the same direction in this new aspect.

Gabriela Frías: Excellent. Thank you, thank you, Bill Maloney. The only thing left for me to say is that if you want to know more about this report, Wired: Digital Connectivity for Inclusion and Growth, which was presented yesterday, you can download it using the link you will see below. I want to thank our panellists: Bill, Eleonora, Yolanda, and, of course, all of you for joining this conversation. I am Gabriela Frías. See you next time.

00:00 Welcome

01:31 Macroeconomic outlook

04:33 The impact of geopolitical fragmentation on trade

06:15 The global context and the digital economy

11:29 Evolution of digitalization and current challenges

18:16 Digital Transformation: GovStack Initiative

23:46 Articulated vision between the public and private sectors

30:18 Practical measures: what to do for the future

34:02 Final reflections and closing

About the Report

Digital Connectivity for Inclusion and Growth Press Release
Website: Economic Review for Latin America and the Caribbean
Download the full report

Watch the replay of this event with simultaneous interpretation in SPANISH, FRENCH and PORTUGUESE.