Latin America and the Caribbean could dramatically increase employment and kick-start sustainable economic growth if the region closes its digital connectivity gap with member countries of the Organization for Economic Co-operation and Development (OECD), according to a new study by the Inter-American Development Bank (IDB).

The study, entitled ‘Digital Gap in Latin America and the Caribbean: Annual Broadband Development Index Report’ (Spanish only), evaluates the state of broadband penetration in 26 countries in the region and estimates the size of the gap as compared with OECD nations.

The OECD is an intergovernmental economic organisation with 38 member countries, founded in 1961 to stimulate economic progress and world trade.

The report shows that the region still has major broadband penetration and 4G technology coverage gaps when compared with OECD countries. In terms of affordability, average citizens spend more than 20 per cent of their income to access broadband services — a level way above the 3 per cent recommended by the information and communications technology specialised agency of the United Nations, International Telecommunication Union.

To close the gap countries in the region would need US$68.5 billion, the report noted. Of the total, 59 per cent should go to improving connectivity in urban areas, something which is mostly handled by the private sector, while 41 per cent would go to rural areas, where public investment is typically the main source of funding.

This would create over 15 million direct jobs, boost regional economic growth by 7.7 per cent, and increase productivity by 6.3 per cent, according to the study.

Consequently, the report recommended that Central American countries invest in infrastructure and develop pedagogical applications and programmes on the use of technology, and Caribbean countries should invest in infrastructure and normative and regulative framework updating.

It pointed out, however, that more public-private partnerships are needed to close the gap with OECD countries.

IDB’s President Mauricio Claver-Carone indicated that delays in improving connectivity and digitalisation in Latin American and Caribbean countries have dramatically exacerbated the economic and social impact of the novel coronavirus pandemic.

“…But this reality also offers a historic opportunity to reduce inequality and create jobs and sustainable economic growth,” Claver-Carone said.

He added, “The IDB is taking steps to drive a digital ecosystem that will help the region attain these investments, design national broadband plans, and create the public-private partnerships needed to expand coverage for all citizens, especially those who are most vulnerable.”

The study shows the evolution of broadband penetration in each country based on four pillars — public policies and strategic vision; strategic regulation; infrastructure; and applications and training.

The report’s release was a part of the IDB’s Miami-Latin America and the Caribbean (LAC) 2021, a business forum to strengthen connections between Miami, the private sector, and the countries of Latin America and the Caribbean, held June 22-24, 2021.

The forum sought to promote digital trade and investment opportunities between South Florida and the IDB’s 26 borrowing member countries, as well as determine how partnerships can be translated into economic growth and job creation within the region.