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Latin American leaders-slow to join the 21st. century Tech. Revolution

Latin America misses online revolution
as its leaders focus on political revolution

By Andres Oppenheimer
Article Launched: 04/05/2007

Judging from a new ranking of the world's most Internet-advanced countries, many Latin American leaders should spend less time talking about political revolutions, and focus more of their energies in joining the 21st century's technological revolution.

While growing numbers of Latin American leaders are trying to change their countries' constitutions, or are pushing other political changes that they claim will bring about prosperity, many countries in other parts of the world are focused on modernizing their information technologies. And they are becoming increasingly competitive, and richer, in the new knowledge-based global economy.

If you look at the newly released Global Information Technology Report put out by the Switzerland-based World Economic Forum last week, Latin America - while faring better than last year - is doing rather poorly. There is not one single Latin American or Caribbean country among the world's 30 most advanced nations in information and communication technologies, even though Brazil and Mexico are among the world's 12 biggest economies.

The report's index of network readiness, which ranks 122 nations, is led by Denmark, followed by Sweden, Singapore, Finland, Switzerland, the Netherlands and the United States. A few spots below you can find Hong Kong (12), Taiwan (13), Israel (18), South Korea (19), Estonia (20), Ireland (21), Malaysia (26), United Arab Emirates (29) and Slovenia (30).

The best-ranked Latin American country is Chile, at 31. Several spots below are Barbados (40), Jamaica (45), Mexico (49), Brazil (53), Costa Rica (56), Uruguay (60), El Salvador (61), Argentina (63), Colombia (64), Peru (78), Venezuela (83), Ecuador (97) and Bolivia (104).

Granted, the report says that most Latin American and Caribbean countries showed a "consistent upward trend" last year, which "draws a heartening picture for the region as a whole, pointing to a reduction in the digital divide with respect to other, more successful regions at similar levels of development, such as Asia or Eastern Europe."

But Irene Mia, the WEF report's main author, told me in a telephone interview from Geneva that Latin America is still "scoring quite poorly" on several fronts in the survey, which makes it lag behind other parts of the world. Among the region's shortcomings:

Excessive government regulation: While it takes only three bureaucratic steps to open a technology firm - or any other firm - in Denmark, it takes 17 bureaucratic steps to do so in Brazil and 16 steps in Venezuela, according to the World Bank. That alone discourages a lot of investments.

Poor education systems: Latin America lags far behind Northern European and Asian countries in basic education, as well as in graduation rates of scientists and engineers. Argentina's state-run University of Buenos Aires, for instance, currently has nearly five times more psychology students than engineering students.

Very little research and development: Latin American countries invest an average of 0.5 percent of their gross domestic product in research and development, compared to about 2 percent invested by South Korea, Japan and the United States, according to U.N. estimates.

Lack of venture capital, excessive taxation and poorly enforced intellectual property laws, which make it difficult for entrepreneurs to start high-tech companies.

Little private-sector involvement in research: While most research and development in the United States, Europe and Asia is done by private-sector companies, in Latin America it is done by governments. "The private sector is more efficient in creating links between universities and private firms for the actual production of goods," Mia said.

My conclusion: In Latin America, there is too much political debate, and too little technological debate.

Changing their constitutions - like Venezuela has done, or like Ecuador and Bolivia are trying to do now - may help their leaders perpetuate themselves in power, but will do little to speed up growth and reduce poverty. (Venezuela has had 28 constitutions in its history, and remains a rich country full of poor people.) And having presidents focusing on ambitious political goals while leaving technology to vice ministers, which happens in other countries, will not suffice, either.

It was a sad reflection of the region's priorities that most front-page headlines in Latin America last week were devoted to the political scandals of the day, while the newly released information technology ranking went almost unnoticed. It should have been the other way around.


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