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Chapter Ii

Infrastructure, connectivity and skills: the foundations for a sustainable and inclusive digital transformation

A. Digital infrastructure and connectivity in Latin America and the Caribbean

B. Digital skills for today and tomorrow

Bibliography

As has become clear in recent years, and especially since the crisis caused by the coronavirus disease (COVID-19) pandemic, the Latin America and the Caribbean region still face a series of structural challenges that need to be addressed in order to advance the development process. These include inequality and low productivity, which are interrelated and linked to a highly heterogeneous and poorly diversified production structure, compounded by fragmented societies, high levels of informality, difficulties in accessing basic services and institutions that enjoy low levels of approval and credibility.

Today, more than ever before, improvements in inclusion, equality and productivity are associated with the accumulation of new capacities in the area of digital technologies. As noted in the previous chapter, in a world in which technological progress has accelerated sharply, there is less room for competition based solely on static comparative advantages, such as abundant natural resources or low-skilled labour. To boost economic development, resources need to be reallocated toward innovation- and knowledge-intensive activities; and economies need to diversify into sectors in which both domestic and external demand are growing rapidly.

It is undeniable that the digital transformation entails major disruptions that could promote greater inclusion and equality and also foster diversification of the production structure and sustainable productivity growth. Digitalization is affecting all sectors of the economy and society, adding value along the production chain; but the magnitude of the change will depend, largely, on enabling factors such as skills and infrastructure.

These technologies have expanded possibilities for advancing towards progressive and inclusive structural change. However, it is also true that the corresponding opportunities are not open to all countries or sectors alike. In fact, rapid digital transformation can become an additional source of social and productive segregation, both within and between countries, if the infrastructure and basic capacities needed to use the technologies appropriately and effectively are not in place. Moreover, success in harnessing the digital revolution depends increasingly on how economies, production sectors, institutions and societies position themselves to absorb and adapt to these changes.

A. Digital infrastructure and connectivity in Latin America and the Caribbean

The relationship between digitalization, inclusion and productivity is highly complex and depends on many factors. However, digital infrastructure is a central element in supporting value creation and generating an effective impact on competitiveness, social well-being and environmental sustainability.

Internet access is a key factor in people’s quality of life, since it is a crucial factor not only for the adoption of digital solutions and technologies, but also for access to basic goods and services, and for connection with government institutions, businesses and society as a whole.

Effective connectivity involves a series of elements such as Internet access, the availability of devices and basic skills for using them. Despite having made great progress in this area in recent years, the countries of Latin America and the Caribbean still have to overcome significant access disparities associated with economic situation, social status, geographic location, gender or age range.

Achieving effective connectivity for people therefore requires mass deployment of both services and access devices, and the skills to use them. Failure to make progress along these lines could give rise to erroneous conclusions regarding access to and use of these technologies, and result in digitalization being concentrated in certain segments of the population only, which would generate greater social and economic divides between people. Targeted policies and public-private partnerships are key to solving the connectivity problems of the most disadvantaged people and the most remote sectors, thereby facilitating access to connection devices and making it possible to develop the skills needed to use them effectively.