Five actions to make the most of digital transformation: commentary by OECD, ECLAC, CAF and EU

The Latin American Economic Outlook (LEO) 2020, published by the OECD, ECLAC, CAF, and the European Commission for International Partnerships, proposed an action plan to make digital transformation play a major role to turn the 2020 crisis into a new development opportunity and address the region’s development traps.

The report’s editors suggested five action areas to increase the benefits of digitization:

Key actions

  • Focus on micro enterprises. The region is characterized by a predominance of micro and small firms that have low productivity, are often disconnected from their markets and do not have the capacity to absorb the shock created by the pandemic. In this respect, digital tools can help drive productivity growth and increase their competitiveness, in particular for companies that are lagging behind. Policies should therefore aim to support the uptake of technological tools with holistic digital ecosystems, adequate infrastructures, and appropriate digital skills.
  • Focus on the poor. Digital divides need to be addressed in order to bring the benefits of the digital transformation to all. A human-centric approach to digital technologies can increase the quality of life within households and therefore improve the social welfare of Latin American societies and promote environmentally sustainable development. Disparities in access and use across territories, socio-economic, age or gender groups persist, and these may widen in the context of the pandemic. This can lead to the creation of gaps between winners and losers, and therefore poses additional threats to social cohesion and stability.
  • Focus on new jobs. Digital technologies will bring both opportunities and challenges to the labor market. A number of jobs in the region are at high risk of automation, while others will experience substantial changes in the way they are performed. Policies to boost productivity must play a strong role in matching market needs and in ensuring a smooth transition from obsolete to new jobs.
  • Place connected screens at home and school. To ensure the benefits of the digital transformation are enjoyed at home and at the office, appropriate skills need to be developed early in life and along people’s lifespan. Among those who have fewer skills, a higher proportion of women have no computer experience. Providing disadvantaged schools and students with more access to ICTs is not enough on its own, programs that develop the right skills for both students and teachers are also needed.
  • Connect governments. New digital technologies can transform public institutions and make them more credible, efficient, inclusive and innovative. This can help restore trust in governments by simplifying complex bureaucratic systems, providing more inclusive public services, including e-health or e-learning that reach more disadvantaged segments of society, becoming more open and transparent, and allowing the participation of citizens in decision-making processes.

See the full report here.