How Panama replaced Uruguay as Latin America’s technology king.
PANAMA CITY — Latin America is one of the fastest-growing technology markets in the world. But how do the countries in the region compare with each other in wireless telephony and PC and Internet penetration?
The Latin Technology Index from Latin Business Chronicle, the digital sister publication of Latin Trade magazine, provides a unique comparison of the technology level of 19 Latin American countries by looking at the penetration rates of Internet, broadband Internet, personal computers (PCs), wireless subscribers and fixed telephone lines. It uses 2010 technology data from the International Telecommunications Union, Computer Industry Almanac and the Santiago Chamber of Commerce and population data from the International Monetary Fund and the Population Reference Bureau.
On this year’s index, Panama replaced Uruguay as Latin America’s technology leader, while Chile replaced Uruguay as the Internet penetration leader in Latin America, but Uruguay replaced Chile as the region’s broadband leader.
Panama seeks to remain Latin America’s technology leader by expanding Internet use and drawing in companies to transform the capital into a logistics hub.
Internet penetration in Panama was up 43 percent last year and personal computer sales jumped 21 percent, the data show.
Eduardo Jaen, who heads Panama’s National Authority for Government Innovation, attributes the rise to government support for Internet access and success at luring new businesses into the modern capital. More than 60 corporations, including tech giants Dell and 3M, shifted regional headquarters to Panama since a tax exemption law was passed in 2007.
“There’s a broad array of companies that have decided to position themselves here and use Panama as a hub,” Jaen says. “We intend to be ahead of Uruguay for years to come.”
Panama President Ricardo Martinelli has made “closing the digital gap” a key priority of his administration. Having established hundreds of free Internet hot spots throughout the country, the government will start offering discount loans to help workers buy computers. About 21 percent of Panamanians currently have at least one computer at home, according to 2010 census data.
Martinelli’s administration began offering free computers and Internet access in schools, which helped move Panama up one notch on a separate technology index compiled by the World Economic Forum.
Even so, much of the Internet growth is driven by multinational corporations and small start-ups that move to Panama because of lower tax rates and cheaper operating costs.
Panama eased requirements for starting a business in 2007. About 35,000 individuals and legal entities have since registered as Panamanian companies online, according to government figures. Among those are a growing number of young American web developers and movie production crews that are demanding faster Internet.
Roman Kogan, who runs Internet service provider PaNetma, says his business has grown 150 percent from last year.
Panama’s Internet rates are competitive with other Latin American countries, and many people find they can save money while running a successful business out of the endless high-rise buildings that pop up in Panama City. “The Internet here is quite reliable and fast enough,” says Jesse Schoberg, who moved his web development company, LJ Host, from Madison, Wisconsin, to Panama in 2009. Rent, food and basic living expenses all are less than in his home state.
Meanwhile, wireless networks connected by BlackBerries and iPhones allow Schoberg to keep working on remote beaches and in the mountains. “You have the perfect storm for Internet entrepreneurs who want a high quality of life,” Schoberg says.
Internet penetration and computer sales are expected to climb as Panama’s economic growth outpaces the region. Backed by an expansion of the Panama Canal, finance officials predict at least 9 percent growth this year.
“We are advancing,” Jaen says of Panama’s technology agency. “The government is committed to growth.”
—Eric Sabo, Latin Business Chronicle
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