In these times, the focus of economic growth and development is moving from the industrial sector and the manufacture of basic products to companies that provide highly complex services that require the use of advanced technology, or ultra-modern gadgets that allow us to do unimaginable things only 20 years ago, like smartphones. Robotization has taken care of leaving millions of workers without work, and that is why the First World is increasingly directing its resources to train highly qualified workers capable of working in highly technified sectors, such as software development companies.
South America, like so many other times, is lagging behind, while East Asia, which in 1950 was in worse shape than Latin America, is even fighting directly with the most prestigious technology companies in Europe and the United States. Today Huawei and Xiaomi are gaining ground in physical and virtual stores of the West.
During the decade of bonanza of commodities, when millions of people left poverty and the middle class grew, investment in innovation and development activities in the region doubled, although in a very concentrated way in a few countries: to be exact, Mexico, Brazil and Argentina account for 91% of R&D spending in Latin America, according to a report from the Science and Technology Indicators Network published in 2017.
However, this was not reflected in the number of articles and patents, although Brazil can be proud to spend more than 1% of GDP on innovation, and Argentina spends 0.62%, which is a high percentage for the region. But, of course, that is not enough to keep pace with Asia. The gap, despite this growth in technology spending, continues to grow. According to the United States Patent and Trademark Office, Asian countries increased their registered patents by 73% in the 2007-2017 period, while South America only increased by 34%.
A single example is creepy. Few people know that in 1950, North Korea was the most industrialized part of the peninsula, while the South was poorer and more backward. Today, South Korea is a great technological power that registered 13000 patents only in 2015, while Brazil, the most leading country in the region, barely registered 230. Obviously, one of the differences between Asians and South Americans is that South Korea spends 3.5% of its GDP on technology.
This happens in an era where technology is increasing its importance in the fight against poverty and corruption thanks to technologies such as 3D printing, robotics and blockchain, is terrible. South America could be losing another train.
One thing in which South America has made progress is in the expansion of the Internet. Today, 60% of the South American population has access to the Internet through computers or smartphones. However, most of those who use the Internet are young, and the oldest and rural areas are largely outside the communications network and increasingly isolated from the rest of their countries. A rise of at least 10 points in bandwidth penetration could make the difference to achieve the desired development.
A senior official of the UN, Alicia Bárcena, has asked the region to reform education systems so that they can adapt to new technologies. According to her, “65% of children who enter primary schools will have jobs that don´t exist today”. It is impossible to deny that she is right.
However, we cannot be totally pessimistic. There are pioneers and entrepreneurs in South America working hard to realize their ideas and claim for their countries and themselves a place in the ultra-competitive technological world. For example, Uruguay can be proud to have generated 1.2$ billion in information technology in 2016 alone and own 700 technology companies exporting software to 52 different countries.
Chile created a program called Start-Up Chile, with a budget of 40 million dollars, seeking to attract foreign entrepreneurs and facilitate the creation of new companies. The Economist cited some successful apps like Chef Surfing (a LinkedIn for chefs) and Kedzoh (application for corporate training).
Inspired by the Chilean example, Brazil created the Start-Up Brazil program, allocating for that purpose a fund of 78 million dollars. Under the project, a selected entrepreneur can receive even $ 100,000 a year. But above all, Brazil is the South American country with the most technology centers, such as Porto Digital in Recife, the Technology Park in Rio de Janeiro, the Sapiens Park in Florianópolis, among others.
Perfectly Brazil could be considered as the South American Silicon Valley, if not for Colombia. There is a Colombian entrepreneur named Andrés Barreto, who is compared to Mark Zuckerberg. He was the creator in 2005 of the now defunct Grooveshark, which you may know. He also founded the Onswipe Company in 2010, which is focused on the monetization of content on tablets and smartphones. He also created an online magazine called Pulso Social where he helps promote technological initiatives throughout the region.
Another great Colombian start-up is Platzi, similar to Udemy. The founders of Platzi, Freddy Vega and Christian van der Henst, have allowed tens of thousands to acquire better technological training and learn to program. Not only do they give programming courses, but also they offer artificial intelligence, blockchain, Internet of Things, and Big Data courses. They have even given thousands of scholarships to developers from the poorest country in South America: Venezuela.
And since we are talking about Venezuela, even there we feel the impulse of technological innovation in a country whose people fight day after day to survive. Many Venezuelans work through Internet for clients around the world right now. Ironically, thanks to the painful hyperinflation, several businesses and stores today accept payments in Bitcoin and other cryptocurrencies. There is also a local Wayra branch, a start-up accelerator that offers financing and advice to new companies.
Today, new technologies are more important than ever and represent a great opportunity for millions to get out of poverty. Of the governments of South America it depends if they will miss another opportunity, ignoring the brave pioneers who work hard for the modernization of their countries.