In March 2023, a historic agreement was signed by all 27 member states of the European Union (EU) and 20 countries of Latin America and the Caribbean (LAC): The EU-LAC Digital Alliance strengthens bi-regional cooperation on key digital matters towards an inclusive digital transformation in both regions. What does its framework look like? We have talked to Marco Llinás, Director of the Production, Productivity and Management Division, UN Economic Commission for Latin America and the Caribbean (ECLAC) about this
Why do we need a Digital Alliance between Latin America and the Caribbean and the EU?
The importance of international cooperation on digital issues cannot be overstated in today’s digitalised economy. A digital alliance between Latin America and the Caribbean and the European Union is fundamental for economic, social and environmental reasons. The current economic context in Latin America and the Caribbean is complex in terms of growth. The region faces a new lost decade, even worse than the infamous lost decade of the 1980s. Between 2014 and 2023, the region saw a growth rate of just 0.8%.
What were the reasons for that?
Basically, this region’s low growth can be explained mainly by low productivity growth, which has remained virtually stagnant in recent decades. Unless the region addresses this productivity challenge, it will find it difficult to meet other pressing development challenges, such as reducing poverty and inequality, and even responding to environmental challenges. As Paul Krugman’s famous phrase reminds us: “productivity is not everything, but in the long run it is almost everything”.
What role can the Digital Alliance play then?
It can create new opportunities for economic growth and innovation for our countries and their territories. A digital agenda, like the one the Digital Alliance represents, can be a catalyst for our countries’ productive development policies by playing a pivotal role in driving innovation in businesses and organizations, revolutionizing the way they operate and compete in today’s dynamic landscape. The importance of digital technologies lies in their capacity to enhance efficiency, streamline processes, and unlock new opportunities for development. From cloud computing and artificial intelligence to data analytics and automation, these technologies empower businesses to collect, analyze, and leverage vast amounts of information in real time.
The EU’s advanced digital economy and experience in digital transformation can be instrumental in building capacity in Latin American and Caribbean countries. Sharing knowledge and expertise will foster a dynamic environment where both regions can contribute to and benefit from digital transformation. By working together, LAC and the EU can also design inclusive digital policies to ensure that the benefits of technology reach all segments of society, find new ways to promote entrepreneurship and give business opportunities to expand their markets.
And what are the common key challenges of digital transformation in LAC and in the EU?
Despite their seemingly different characteristics, they share common challenges. A key obstacle is the existence of disparities in digital connectivity, particularly in rural areas and less economically developed areas, where access to reliable internet connectivity and advanced technological resources is limited.
Another common challenge is the need to address the digital skills gap, requiring significant investments in education and training programs to equip individuals with the capabilities necessary to harness the digital economy.
Member States in LAC and the EU face the challenge of developing and adapting regulatory frameworks that foster innovation while addressing security, privacy, and ethical concerns. So, striking a balance that encourages technological advancement without compromising consumers’ rights is crucial to generate trust around digital transformation, both for businesses and individuals. By encouraging collaboration, both regions can tap into diverse technological expertise and market insights, creating what we call a synergistic environment that drives innovation and competitiveness.
Is there agreement on all these points?
There is a common understanding of these challenges. Moreover, Europe and Latin America and the Caribbean share a deep-rooted connection, with their commitment to common values and principles. Both regions recognize the significance of fostering a digital landscape that respects privacy, promotes inclusivity, and upholds human rights.
There is also a shared vision with regards to the possibility of both regions learning from each other, not only our region learning from the EU. The EU and its member states can learn from Latin American countries in digital transformation. First, the importance of adaptability and resilience in the face of diverse challenges such as different levels of economic development and infrastructure disparities and understanding how LAC countries have navigated through these challenges can actually inform EU strategies for addressing similar issues within its diverse member states.
We say that Latin America and the Caribbean has often embraced innovative solutions tailored to its unique socioeconomic context, and the EU can learn from these localized approaches and initiatives. This includes technological ventures of all kinds. For example, in LAC countries, we have a vibrant innovation ecosystem in sectors such as fintech, agritech and e-health. Hence, linking the innovation and entrepreneurship capacity of Latin America and the Caribbean with possible needs from European companies could be of great value. And that’s something that we’re doing under the EU-LAC Digital Alliance.
“We say that Latin America and the Caribbean has often embraced innovative solutions tailored to its unique socioeconomic context, and the EU can learn from these localized approaches and initiatives. This includes technological ventures of all kinds. […] Hence, linking the innovation and entrepreneurship capacity of Latin America and the Caribbean with possible needs from European companies could be of great value. And that’s something that we’re doing under the EU-LAC Digital Alliance.”
Would you have an example of how LAC countries have found solutions that EU countries can learn from?
Let me give you an example in the context of sustainable development. Latin American and Caribbean countries are actively using digital tools for environmental monitoring and conservation. One example is Aqua Crop, a digital tool that helps farmers optimise water use and improve irrigation efficiency in agriculture. This tool is particularly valuable in Chile, where water scarcity is a major issue. But we have many examples in other dimensions as well. The region has developed a variety of institutional arrangements to address connectivity issues.
One example is the Internet for All initiative in Peru, where international organisations, the private sector and development banks have come together to create a telecommunications company that will bring the Internet to 3 million people in Peru.
Many different stakeholders are involved in the implementation of Digital Alliance initiatives, including governments, private sector, civil society, academia, etc. Based on your experience, what are key aspects for finding a common ground, especially regarding digital transformation?
At ECLAC, we have extensive experience in uniting different visions around common goals. In particular, the Digital Agenda for Latin America and the Caribbean, also known as eLAC, is an agreement developed within the framework of the Ministerial Conference on the Information Society. It is the result of a consensus between governmental actors, the private sector, civil society and the technical community. This agenda translates into a set of strategic policy objectives that are adopted by governments and reviewed every two years.
We believe it is essential to establish clear participation mechanisms. We have been able to do this in eLAC because we have a governance model with clear roles and workspaces for government participation, and non-state actors are well defined. Another key aspect is building trust, which we have achieved through a multi-year work process.
How does it feel being responsible for eLAC? More like riding on a wave or more like Sisyphus, bringing all these players together?
Fortunately, there’s already this long experience of getting all these actors on the right track. As part of the UN system, we at ECLAC have the institutional strength and the convening capacity. I fully believe in the potential of this agenda and this institutional arrangement for dialogue that ECLAC represents. But I like your question because it allows me to say that I think we could benefit more and make better use of its potential for dialogue and convergence; as a space to actually agree on deeper digital agendas for the region, but also to foster conversations with other regions, such as the EU.
What is lacking?
We need to bring into the conversation some of the actors that are probably particularly missing. We need to link digital transformation efforts with productive development efforts, as I said at the beginning. So we need to bring not only the ICT ministries and other agencies related to the information and communication technology sector, but also the ministries and agencies and people who are responsible for productive development policies; for example, ministers of economy, ministers of trade and industry.
That means that cooperation should become more inclusive. Do other partners need to be involved in order to get full inclusiveness?
For example, socio-economic inclusion initiatives need to consider affordability and accessibility, particularly for people from diverse backgrounds. This means that when developing connectivity policies, both the supply and demand of technology need to be considered. In this case, bridging the demand gap may in some cases involve providing subsidies to certain groups to facilitate access, and this may also involve implementing digital literacy programmes that provide training and support to those who are more vulnerable.
We also address the challenge of inclusiveness in terms of accessibility, for example by using universal design principles to guide the creation of digital solutions and make them accessible to people with disabilities. We also address the inclusivity challenge through linguistic and cultural inclusivity, which can be addressed by providing multilingual support and considering cultural nuances in the design of digital interfaces and content.
Continuous evaluation and iteration complete the inclusive design process by establishing feedback mechanisms and monitoring demographic data that allow for improvements and address the emerging needs of different stakeholders. The conversation on inclusiveness therefore goes beyond simply bringing together the actors involved in productive development policies. It obviously has a broader scope.
When we talk about digital transformation, we also have to talk about disruptions and emerging trends that significantly shape its nature. Looking ahead, what specific contributions do you think the Digital Alliance can make to sustainable digital transformation in both regions?
The importance of international cooperation, especially between Latin America and the Caribbean and Europe, is underlined by the significant risks associated with digital technologies. As the digital landscape rapidly evolves, cooperation is essential to address and mitigate these various challenges.
First and foremost, among these challenges is the complex and constantly evolving cybersecurity landscape. Therefore, we say that by working together, countries can improve their collective cyber security capabilities. This includes sharing critical information and best practices, and coordinating responses to effectively combat cyber-attacks, data breaches and the spread of malicious software.
Another critical aspect is the establishment of common standards and regulatory frameworks to govern the responsible use of data. In this sense, international cooperation between these regions can contribute to the development of ethical guidelines, ensure the protection of individual privacy and promote consensus on responsible data management. By fostering cooperation on all these issues we’ve been talking about – cybersecurity, data governance, standardisation, capacity building – we firmly believe that our regions can work together to build a secure, ethical and inclusive digital landscape.
Do you think that the states are powerful enough to cope with all these challenges you have mentioned?
We are totally convinced that the challenges that we currently face cannot be addressed individually. They must be addressed collectively. Initiatives like the Digital Alliance are the way forward.
Marco A. Llinás Vargas is an expert in competitiveness, industrial policies, and internationalization. He is currently Chief of the Division of Production, Productivity and Management at ECLAC. He has been Advisor to Colombia’s High Council on Foreign Trade, VP at the Bogota Chamber of Commerce, VP at Colombia’s Private Council for Competitiveness, Negotiator of the Free Trade Agreement with the US, among others.
He is the author of the book “Cluster Initiatives: a concrete and effective way to ‘move the needle’ of productivity”. He holds a degree in Industrial Engineering and a Master in Economics from Los Andes University, and a Master degree in Public Administration in International Development from Harvard University.