A Real and Effective Digital Transformation Can Help Latin America and the Caribbean Overcome the Traps Hindering its Development

• Production, productivity and management

ECLAC is presenting a new document with recommendations in the framework of the Ninth Ministerial Conference on the Information Society in Latin America and the Caribbean, which will be held this Thursday and Friday, November 7-8, in Chile.

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Making progress on the real and effective use of digital technologies can serve as a bridge that enables overcoming development traps in the region, by closing historical inequality gaps and fostering more productive, inclusive and sustainable growth, ECLAC sustains in the document Overcoming Development Traps in Latin America and the Caribbean in the Digital Age: The Transformative Potential of Digital Technologies and Artificial Intelligence (Spanish only), released today.

"The region has a historic opportunity to utilize digital tools to address the three traps that inhibit its development: a first trap of low capacity for growth, a second involving high inequality, low social mobility and weak social cohesion, and a third trap of low institutional capacity and ineffective governance," the Economic Commission for Latin America and the Caribbean (ECLAC) contends.

Digital transformation offers a path for strengthening competitiveness, accelerating learning, driving innovation and improving the quality of life of millions of people. But this change will not occur automatically; a joint effort will be needed with the participation of governments, the private sector and civil society to ensure that the benefits of the digital age are shared by all, according to the publication that will be officially presented at the Ninth Ministerial Conference on the Information Society in Latin America and the Caribbean, to be held at ECLAC's headquarters in Santiago on November 7-8.

"The digital transformation of the business world could improve the efficiency of production processes, optimizing supply chains and fostering innovation in products and services. In addition, digitalization facilitates access to global markets, reducing dependence on traditional sectors and promoting an economic diversification that is necessary for sustainable growth. All of this would be facilitated to the extent that the region's countries and their territories manage to articulate their digital transformation efforts with their productive development policies," the document explains.

Furthermore, the report presented by ECLAC highlights the economic and employment impact of artificial intelligence (AI) in the region. According to the estimates, in 2023 the total economic contribution of AI in 17 Latin American and Caribbean countries amounted to $70.748 billion dollars, or 1.11% of GDP, while around 44% of the region's workforce has a high probability of being affected by AI.

The document states that while 80% of the region's urban population has access to the Internet, this figure drops drastically in rural areas and among lower-income sectors, producing gaps of up to 50 percentage points between the wealthiest and the poorest households. This shows the urgency of implementing policies that would ensure "meaningful connectivity." This connectivity is not limited to access to the Internet, but instead emphasizes the quality, affordability and skills needed for people to be able to fully benefit from digital opportunities. By comparing basic indicators of connectivity with more complex ones that capture these dimensions, it can be seen that despite progress on access, there are still barriers limiting the real and effective use of digital technologies. Resolving these limitations is critical for closing gaps and promoting more inclusive and equitable digital development, the Commission underlines.

Finally, digital technologies and AI can strengthen institutions and governance capacity in Latin America and the Caribbean, improving transparency, efficiency and accountability, through various tools such as the digitalization of governmental processes and the provision of digital services to the population. This is fundamental if we take into account that 70% of the region's population expresses distrust in their government, the United Nations regional organization states.

The hope is that implementation of the new Digital Agenda for Latin America and the Caribbean 2026 (eLAC2026) will be key for the region's countries to be able to harness the opportunities that the digital transformation and AI offer for overcoming development traps. This agenda will be presented for its approval at the Ninth Ministerial Conference on the Information Society.

This intergovernmental meeting is taking place in the framework of "Digital Week in Latin America and the Caribbean," since on November 5-6 the European Union-Latin America and the Caribbean Digital Alliance's High-level Dialogues on Artificial Intelligence and Connectivity are also being held at ECLAC's headquarters, organized by the government of Chile and the European Union.

The programme as well as general information on the Ninth Ministerial Conference of eLAC are available on the website that was specifically created for this meeting.

Members of the media are requested to complete this accreditation form in order to attend the conference in person. Journalists must have their media credentials or personal IDs with them to gain access to ECLAC.

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