The digital economy for structural change and equality

Abstract

The majority of the countries in Latin America are currently undergoing processes of economic growth and poverty reduction. As part of that development, it is critical that they address the challenge of articulating and consolidating their digital economy, as ECLAC puts forth in this book. This will require exploring how to identify and exploit the new opportunities that arise from technological convergence in order to foster economic development and equality. First, new strategies are needed for maximizing the impact of the digital economy on growth, innovation, structural change and social inclusion. The main challenges are to ensure the minimum conditions necessary for investment in information and communication technologies (ICTs) to have a positive impact on economic growth; to promote and consolidate a broadband-based technological innovation and diffusion model, compatible with the objectives of social inclusion; and to foster a change in the production structure that, based on the specific economic and institutional characteristics of each country, articulates knowledge with production and strengthens the software sector. Second, a consolidated policy framework needs to focus on the key factors for the deployment of the digital economy. The main deficiencies that need to be addressed are investment in telecommunications infrastructure, the demand for broadband and the development of the application software industry. Public policy is crucial for ensuring equality of access and use of ICTs that facilitate the provision of social services (public administration, health and education) and public goods. Third, the region needs to move towards establishing an institutional framework for the digital economy that integrates policy initiatives on broadband, ICT industries and digital inclusion. In this area, the following chapters propose organized actions based on two pillars: ICT policies for structural change and ICTs for equality and social inclusion. The book has three parts. The first section, comprising chapters I and II, defines the digital economy, describes its dynamics in Latin America and discusses its share of GDP for four countries in the region (Argentina, Brazil, Chile and Mexico). It also examines the environment in which the digital economy is developing, mainly in terms of the implementation of digital agendas and the diffusion of internet and broadband, and analyses the impact of ICTs on economic growth and productivity. The second part (chapter III) lays out the vision held by ECLAC on structural change and equality and the role of ICTs as complementary assets that evolve in conjunction with the production structure. The interaction between ICTs, structural change and growth are analysed based on ICT diffusion indicators and an econometric exercise. In this chapter, the equality dimension is explored through an analysis of the relationship between ICTs and the distribution of income and between these and educational achievements. The third part of the book (chapters IV and V) examines ICT policies for structural change and the use of these technologies for social inclusion. Chapter IV describes the Latin American telecommunications services market and analyses the opportunities for the region of the applications and software industries. It also proposes strategic objectives for broadband policy and action areas for achieving them. Finally, the chapter explores the industrial policy challenges with regard to digital economy and its priority objectives, describes the current situation and progress in the software industry and discusses the incorporation of ICTs in small and medium-sized enterprises (SMEs). Chapter V analyses the role of ICTs in social inclusion in three areas: education, health and electronic government. It provides an overview of ICT diffusion in each of these areas and suggests public policy guidelines for taking full advantage of the potential of ICTs. Finally, the conclusion summarizes the book’s findings and highlights the proposals that emerge from the different chapters.