Innovation and Technology in Latin America’s Post-Pandemic Recovery

Main Photo: Mohamed_hassan / Pixabay

On May 13, the Inter-American Dialogue hosted the online webinar “Innovation and Technology in Latin America’s Post-Pandemic Recovery” with the participation of Carmen Pagés-Serra, Chief of the Labor Markets and Social Security Unit at the Inter-American Development Bank, Andrés Cadena, Senior Partner at McKinsey & Co., Ángel Melguizo, Vice President, External & Regulatory Affairs at AT&T DirecTV Latin America, and Victor Muñoz, National Innovation and Digital Transformation Advisor at the Colombian Presidency. The session was moderated by Michael Shifter, president of the Inter-American Dialogue.

Muñoz began by emphasizing the necessity and importance of telework, telemedicine, and tele-education. While the present situation has forced many companies to quickly adjust in order to survive, the resulting shift to digital platforms also provides access to new forms of learning for people all over the world. As an advisor to the Colombian president, Muñoz and his team have been working on a digital transformation strategy for the last two years, including the creation of a center in Medellín focused on artificial intelligence. With the pandemic, new instruments have emerged from his department such as the “Coronapp” which allows citizens to receive daily information from the government without consuming data. Muñoz identified Colombia’s main challenge to be connectivity, and he intends to work to increase access in vulnerable areas in the next two years. He ended his remarks on a hopeful tone: while the job market will be very different after the pandemic, it will also present an opportunity to reinvent a new world supported by technology and innovation.

Pagés-Serra stressed that while technology helps those who are able to use it, without accompanying policies, it can leave a lot of people behind. In many economies, technology has gone hand in hand with an increase in inequality and isolation in labor markets. Furthermore, the post-pandemic world will require new technological skills from workers. In the last recession in the United States, she explained, "we saw that when companies started rehiring, the request for education and skills increased substantially". To meet the technological reinvention by governments and corporations, Pagés-Serra suggested the implementation of retraining programs, boot camps, and certification processes to equip workers to thrive in the new conception of the workplace. To put this rapid change in perspective, Pagés-Serra asserted that Covid-19 has moved the path of technological adoption in Latin America forward in ways that would have otherwise taken place in the next 10 years.

However, in terms of the regional economy, Melguizo affirmed that Latin America will not recover 2015 levels of GDP until 2025. Unless we act quickly, this could become a lost decade, and according to the Economic Commission for Latin America and the Caribbean, 30 million Latin Americans could fall into poverty. Melguizo underscored Pagés-Serra’s point regarding technological access and skills tending to fall along class lines, as he shared the Inter-American Development Bank’s report that while 60 percent of high-income workers are working from home, just 30 percent of workers are in lower-income levels. In closing, Melguizo stressed flexibility. He stated that we cannot translate the rules of the analog economy to the digital economy until we really know how it works. Since the Internet knows no borders, we need to establish stronger global multinational arrangements and promote the flow of information across technoscapes.

Andrés Cadena narrowed the focus of the analysis from a regional level to a national and subnational one. While the average Internet penetration rate in Latin America is below OECD levels (65 percent compared to 83 percent), this average does not reflect the unequal reality between countries. For example, while Chile’s Internet penetration rate of 82 percent almost matches the OECD average, Bolivia’s rate is only 44 percent, and Honduras’ is even lower at 32 percent. Furthermore, there are gaps between low-income and high-income regions of each nation, rural and urban areas, and small and large companies. However, to fight the pandemic in the absence of a vaccine, we only have four tools: accelerating health care capacity, being able to cope with the demand for the healthcare system (testing and tracking, protocols), and social isolation. While social isolation is characterized as the silver bullet, it also comes with the serious implication of reducing the livelihoods of citizens in the region, especially in vulnerable sectors of the population.

To conclude the conversation, Michael Shifter brought the panelists’ thoughts together by highlighting the importance of international cooperation. In particular, Melguizo and Pagés-Serra noted that the Inter-American Development Bank (IDB) has been doing a tremendous job at bridging the digital and skill gaps across the region. As the IDB representative on the panel, Pagés-Serra expressed the IDB’s desire to continue to play a role in bridging the gaps in the post-pandemic period and enabling digital strategy.

Press Coverage: 

Debt, unemployment, digitization: Glimpses at a post-pandemic LatAm (BNAmericas, May 13, 2020) 

Innovation and digitization offer the only ways to emerge strongly from the crisis (Latin America Business Stories, May 15, 2020) Portuguese 

Watch the full recording of this event here: