SANTIAGO, Chile, CMC – The Economic Commission for Latin America and the Caribbean (ECLAC) has unveiled its Digital Development Observatory (DDO) that it says is aimed at producing, gathering and analysing relevant data and information to identify trends, evaluate progress and support policy formulation and implementation on digital transformation in the region.

ECLAC said the DDO’s website contains more than 100 indicators and qualitative information in 12 thematic areas seen as key for regional countries’ digital transformation, including connectivity and digital inclusion, businesses and productive digital transformation, e-commerce and digital services, digital skills, digital government and artificial intelligence.

“The launch of the Digital Development Observatory marks a significant milestone in ECLAC’s efforts to understand and promote digital transformation in our region,” said José Manuel Salazar-Xirinachs, ECLAC’s executive secretary, during the virtual presentation.

“Its goal is clear: to produce indicators and information that would improve the formulation of evidence-based policies in areas of digital transformation in order to drive more productive, inclusive and sustainable development in our countries,” he added.

According to the Observatory’s data, more than 60 per cent of companies in Latin America and the Caribbean (LAC) that use the internet have a passive presence, “which means they do not use this tool to make transactions, for example”

ECLAC said that the situation is even more worrisome in the case of Micro, Small and Medium-sized Enterprises (MSMEs), which in many countries account for more than 98 per cent of businesses since 70 per cent of them do not even have an online presence.

“But there is not only concern over the gaps in adopting mature technologies such as the Internet in Latin America and the Caribbean,” it warned, stating that the scenario is even more alarming in analysing emerging digital technologies, such as artificial intelligence.

Salazar-Xirinachs said the scant use of digital technology in the production framework “limits and conditions improvements in the region’s productivity and competitiveness.”

“Stepping up and escalating efforts on digital technological outreach will be key for the region’s future,” he said, thanking the European Union (EU) for its support in building the DDO.

Meanwhile, the director for Latin America and the Caribbean at the Directorate-General for International Partnerships (DG INTPA) of the European Commission (EC), Félix Fernández-Shaw, described the Observatory “as one more example of all that the EU and Latin America and the Caribbean, and the EC and ECLAC, can do together.”

He called for working on “a just and inclusive digital transition” and for jointly addressing issues such as cybersecurity, artificial intelligence, digital government and permanent monitoring of the state of digital transformation for decision-making purposes.

The Observatory’s data showed that despite progress in recent decades, fixed broadband penetration in the region is at levels below 20 per cent of the population versus the 40 per cent seen in Europe.

With regard to connection quality, the region is also below the global average, both for fixed and mobile broadband, the data revealed.

The DDO also indicated that the digital divide by household income level continues to persist.

In 2022, it said Internet penetration in higher-income households was nearly double that of lower-income households in some countries.

Furthermore, the DDO said 77 per cent of urban households in Latin America and the Caribbean have connectivity, whereas that percentage drops to just 38 per cent in rural areas.

The Observatory also compiles information on national digital agendas, as well as the Digital Agenda for Latin America and the Caribbean (eLAC).

ECLAC said digital agendas “can play a key role in driving the transformations that the region urgently needs, but it added that, in recent years, “a certain weakening of these instruments has been observed.

“Although they exist in the majority of countries, they lack concrete roadmaps, operational authorities, budget allotments and mechanisms for evaluation,” ECLAC said.