The digital transformation of Latin America is gathering at two speeds. While the number of technologies in the region quadrupled between 2018 and 2021, another large part of the population is far from accessing their benefits. Some 240 million Latin Americans, 38% of the region’s population, choose not to access the internet even in the coverage area, according to the World Bank’s new study Link: The technology technology for inclusion and development.
Meliton Tecpa, a merchant who lives in the state of Tlaxcala, in Mexico, said “The result is that I can’t afford the internet.” This restriction has two immediate effects on his life: it limits his chances of getting a job through digital applications and prevents his three children from accessing educational content, the important points during the month of health problems.
Like Tecpa, the lack of financial resources is the main reason why Latin American families decide not to use the internet. 50% of families, stated in the World Bank’s study, indicate the high cost of services. The document analyzes the views of researchers, especially in the countries of Central America and the Caribbean. For example, general services in Nicaragua represent approximately 20% of the monthly national income (GNI) per capita. Just for reference, the United Nations aims for access to this type of connection to cost more than 2% of GNI per person by 2025.
High prices often affect the most vulnerable groups, those who can benefit the most from the impact of new technologies. For example, in Jamaica, home internet service can account for almost 25% of the monthly income of a person in the poorest part of the population. The same thing happened in El Salvador and Ecuador.
Adding to this situation are other housing problems. For example, only 42% of households in rural areas have access to fixed internet services at home. At the same time, 55% of families report that there are some problems with their quality of service. And 7% of the population, around 45 million people, do not have mobile service in their area.
“Connectivity alone is not a magic bullet. It’s not about installing the cable and that’s it. Governments have the challenge of investing in skills, knowledge and more to take advantage of this opportunity,” said Bill Maloney, the World Bank’s economist for Latin America and the region. Caribbean land.
Beyond the issue of costs, around 20% of households without a connection in the area also report that they have no interest or need for the Internet. This, according to World Bank experts, shows the lack of knowledge about the benefits of connectivity.
In addition to the combination of high costs and dissatisfaction is the lack of digital skills, three related problems that hinder the progress of Latin American countries. Only 28.1% of the region’s population has skills, far from the 64% registered in OECD countries.
World Bank research emphasizes that the full potential of regional connectivity for growth and inclusion remains unrealized. This is especially because of the weak growth forecast by the company for the next three years. The Latin American economy will grow on average 2% this year, and the forecast is limited to 2.3% and 2.6% for 2024 and 2025, respectively. “These prices, similar to those of 2010, are not enough to meet the growing need for inclusion and poverty reduction,” said the regional economic report.
“In Latin America, realizing the full potential of digital technologies could lead to an annual economic impact of up to US$ 1.37 trillion by 2030 in six major economies most in the region, or 23% of the total GDP of these countries”, said a few days ago Eleonora Rabinovich, head of Government Affairs and Public Policy at Google for the Spanish-speaking countries of Latin America, at the presentation of the World Bank report.
Improving access to digital services can also have an immediate impact on the use and quality of public services, such as health, education or other necessary public facilities. clan.
The challenge, Maloney argues, is that the new foundation of digital solutions in public services does not exacerbate existing inequalities, but rather helps reduce them. “During the health crisis, students lost a year and a half of education. But this is not for everyone: connection is the difference between staying in school or losing everything,” said the World Bank’s chief economist for the region.
The report also highlights how certain groups are excluded from the digital world, such as rural women. They have 37% fewer connections than men in the environment, which limits their chances of getting a better job.
Despite this panorama, Latin America and the Caribbean have achieved significant improvements in the necessary infrastructure: cables, towers and exchangers for digital communication are already in place. Countries such as Brazil, Chile, Dominica and Saint Lucia have coverage of more than 75%, although most of Central America still does not exceed 50%.
Research calls for continued investment in physical infrastructure, but do not forget about the importance of digital skills and traditional human resources etc. added value. Only in this way will the land be able to reach the potential of the digital connection and the connection will, in general, be the choice to enjoy the holidays.