Arleny Valle
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25 / 10 / 2023
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From Trend to Reality
What Do We Mean When We Talk About Digital Transformation in Latin America and the Caribbeannnnnn?
Once you're immersed in the bubble of digitization, it's very difficult to reconnect with the outside world. I like to distinguish between the real world and the virtual world, between the physical or tangible and the represented or simulated. This way, I don't feel like I'm caught in the hamster wheel of digital transformation, change management, the metaverse, blockchain, artificial intelligence, AI pins, Neuralink, or any other trend bombarding me on social media.
Talking about digital transformation in Latin America is like trying to climb a ten-step staircase in one stride or leap across the nine platforms of Chichen Itza in a single jump, to be more precise. Digital transformation is an exponent of the challenges we face in Latin America; it's not just another challenge. If we don't change our underlying reality, the results could potentially be more catastrophic for our development, but if we do, they could potentially be more favorable.
What is Digital Transformation?
Digital transformation is a process that goes beyond mere digitization. It involves a profound restructuring of the operations, systems, and business models of companies, organizations, and governments in the region to fully harness the opportunities offered by digital technology.
This includes the adoption of emerging technologies, optimization of interfaces and processes, and the creation of digital strategies to achieve short and long-term strategic goals. It's crucial to promote a culture of adaptation to technological change and seek growth opportunities in a globalized and highly connected market.
On the other hand, digitalization is the process of converting information, data, and resources into a digital format, i.e., a numerical or binary representation that can be electronically processed and stored. This involves converting physical or analog content, such as paper documents, printed images, or analog signals, into a digital format that can be manipulated and managed using electronic devices like computers.
And right there, we encounter our first challenge, starting at the highest levels of the organizational hierarchy in our countries. Private companies, governments, banks—we're aware that technologies for document digitization already exist, and they're not emerging technologies. From a scanner and a local server to digital signatures on any cloud platform. Yet, I'm asked to fill out the same form and provide about twenty more photocopies just to start the process of repairing a scratch on my car with my insurance company.
And we're talking about the same insurance company that has a digital business platform on WhatsApp, where we always end up talking to an operator because we can't resolve our issue online or because, while browsing their web pages, every two clicks, it says, "This page isn't working, Try clearing your cookies."
The Challenges of Education in Latin America
It's true that significant progress has been made in the adoption of digital technologies in Latin America and the Caribbean, but considerable challenges still exist. The region exhibits a gap in internet access between urban and rural areas, a lack of digital skills in much of the population, and regulatory frameworks that need updating to address the realities of the digital age. These limitations are compounded by preexisting socioeconomic inequalities.
There are two fundamental socioeconomic inequalities: purchasing power and education. These define the opportunities and the environment in which we develop and form the basis for the major challenges we face in the region. We've learned to navigate poverty; over the years, we've been resilient in this regard. It's also quite noticeable to all Latin Americans that purchasing power is selective; we might not have enough to eat, but we can have a cellphone.
What we can't acquire selectively is education, and this is an extremely alarming issue for the world. As the Progress and Information page of UN Sustainable Development Goal 4 (Ensure inclusive and equitable quality education and promote lifelong learning opportunities for all) in 2023 notes:
"Even before the COVID-19 pandemic, the world was already off-track to achieve its education targets. If no additional measures are taken, only one in six countries will meet SDG4 and achieve universal access to quality education by 2030. An estimated 84 million children and young people will still be out of school, and an estimated 300 million students will still not have the basic numeracy and literacy skills they need to succeed in life." SDG 4 Progress and Info
And the words of Mercedes Mateo, Chief of Education at the Inter-American Development Bank (IDB), aren't much different:
"Education, and especially the accumulation of basic skills, is key to overcoming structural inequalities, improving social mobility and boosting the productivity growth the region needs. In Latin America and the Caribbean, more than 50% of 15-year-olds do not understand what they read, and around 60% lack basic math skills. We need to guarantee basic learning, which is the basis for acquiring the rest of the skills needed to prosper in the 21st century." World Bank Press Release
I use the word "alarming" because it makes you think when the leading organizations dedicated to education in Latin America and the Caribbean are concerned about the slowing literacy rates among young people, while TikTok statistics continue to rise every year, considering Latin America one of the most prolific regions for expansion in the world.
According to Statista.com, since 2019, active TikTok users have increased by 91.2% in Latin America, trailing only behind Asia-Pacific and the Middle East/North Africa. TikTok Usage Growth Worldwide
So, what happens when a large number of young people who lack basic life skills have access to a digital platform like TikTok? Or any digital platform, for that matter? At the very least, it's a total waste of the internet. By not understanding the magnitude of digitization or the magnitude of the benefits that the internet brings, we'll focus only on the most basic entertainment that allows us to recognize our cognitive capacity.
And this condition can be extrapolated to the adult population of the region, who must undergo a process of digital transformation to understand the magnitude of the technology of our times. They don't have the advantage of being digital natives, as the younger generations are, but that doesn't exempt them from squandering technology, allowing it to consume them, rather than them consuming it.
Access to the Internet
Aside from the issue of education, there are two documents (among many others) that are quite enlightening about the current state of digital transformation in Latin America and the Caribbean. They present a clear picture of the region's challenges. One is "Access and Use of the Internet in Latin America and the Caribbean" by the World Bank and the UNDP, and the other is "A Digital Path for Sustainable Development in Latin America and the Caribbean" by ECLAC.
You can visit them here: UNDP and World Bank Report and here: ECLAC Report
From these reports, it's quite clear that one of the most fundamental and critical challenges for digital transformation in Latin America and the Caribbean is Unequal Internet Access. This is the gateway to the digital economy. Without adequate and equitable access to the internet, other challenges like the lack of digital skills or the adoption of emerging technologies are magnified. If people can't connect, they can't benefit from the opportunities that digitization offers.
The lack of internet access limits the region's countries' ability to fully engage in the global economy. Companies can't seize e-commerce opportunities, and entrepreneurs can't access broader markets. Furthermore, connectivity is essential for innovation. Without internet access, the region may lag behind in terms of developing new solutions, technologies, and business models.
Realistic Goals for the Region
In the end, I've reached 1,500 words while painting a catastrophic and uphill picture for Latin America, as it has always been. So, what should we consider, and what can we do?
First, it's essential to understand that without basic education and digital education, having good internet access is meaningless. Second, we should set realistic objectives based on our day-to-day reality, not the reality of the United States or Europe, where we often look for plans that work in their context, not necessarily in ours.
For example, discussing universal connectivity to ensure that everyone has access to high-quality and affordable internet is quite evident, but it doesn't guarantee achieving digital transformation in the region. A better goal would be to implement educational programs that promote digital skills from childhood to adulthood, preparing the population for the digital economy.
We'll talk at length about this topic later, but for now, I'll leave you with a question until the next chapter: What would you choose to be taught in school, mathematics and English, or computer science and programming?
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