Anchors Away

Complex development challenges cause a lot of ICT4D conversations and activities to skew toward Sub-Saharan Africa and South Asia, relegating other emerging-market regions to quieter conference rooms. In Latin America, ICT4D is largely left up to governments and “the market,” and development assistance is a smaller part of national economies.  Of course, Latin American countries have their troubles, especially those that depend on oil income or trade with China. Brazil’s political and economic problems will take a while to resolve. And over 60% of Latin America’s population is either poor or at risk of slipping back into poverty; the IDB estimates that around a quarter of Latin Americans earned less than $5 a day (PPP)Another 39% comprise the “vulnerable” middle class (defined as $5-$12.4/day PPP).

But business managers looking for growth opportunities might consider a few trends in Latin America: steady network expansion, solid financing options, sophisticated and relatively wealthy urban centers, rabid social media use, and surging smartphone adoption. Indeed, half of all mobile phones in Latin America will be smartphones by 2017, and the continent (home to only 9% of the world’s population) claims 20% of all Facebook users. Brazil and Mexico account for 38% of WhatsApp users worldwide.  And for those who believe Brazil is too big an anchor to escape, there is evidence that Latin America is no longer a cohesive economic block. An astute 2014 analysis by Bloomberg, for example, showed that Pacific-coast countries in the region enjoyed a significantly higher rate of GDP growth than their Atlantic-coast cousins.

All this suggests that select Latin American markets are fertile ground for useful, well-designed digital programs and services.  Currently, however, such services are underdeveloped (e.g., there is no Latin American equivalent to MPesa), and the door is open for tech companies to lead the commercialization of mobile-enabled health solutions, financial services, and social programs. The most likely areas for profitable investments are e-commerce, Big Data, the Internet of Things, “smart city” initiatives, and SMB support. Latin America may be emblematic of the opportunities in other middle-income countries and regions as the BRICS struggle and natural resource-dependent economies lose their luster.  Beyond just providing affordable technology and access to services, there is an opportunity to build capacity (e.g., financial literacy, small business expertise, education, and training). It could be said that these prospects are the same everywhere, but technology adoption trends and local private-sector strengths argue for engagement and leadership as Latin America sets sail.

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