“The ECLAC Meeting”, an article by Dr. Leonel Fernández

September 28, 2016

I recently had the opportunity to participate in the Second Meeting of the Conference on Science, Innovation, and Technology for the Economic Commission for Latin America and the Caribbean (ECLAC) in San José, Costa Rica.

In discussing those subjects, I started from the premise that both Latin America and the world in general are experiencing a period of uncertainty.

This situation can be seen in the fact that until 2012 our region went
through what some had dubbed the Golden Age – a decade characterized by remarkable economic expansion, with average GDP growth of 5.5 percent.

In light of this situation, successful social policies were applied. Poverty decreased and the middle class expanded. Commodities prices increase, and trade relations were diversified.

But as a result of the Great Recession, recent years have seen the sketching out of a diametrically opposed panorama. Economic
growth has dropped, with average GDP of just 0.5 percent.

Likewise, international trade has fallen, and with it has come a drop in commodity prices and reduction in fiscal revenues, a weakening of public spending, a jump in unemployment, and as a consequence an increase in poverty.

All this has obviously given rise to social discontent and a turbulent political situation, even in countries generally deemed stable.

A change of

To make it through this moment of uncertainty and volatility, ECLAC has for several years been proposing a change from the current economic model to one involving equitable productive transformation.

This new productive transformation model aims to continuously guarantee economic growth to incentivize sustainable development.

Its goal is to apply the United Nation’s 17 Sustainable Development Goals for 2030, while
also diversifying economies, promoting science and technology, stimulating competitiveness and innovation, and fostering integration of the global value chain.

What’s more, the purpose of the new productive transformation model is to achieve the transition from the traditional industrial system to a knowledge society.

Naturally, examining the possibilities for this transition makes clear the undeniable difficulties still facing several
countries in the region, which have yet to manage to move through the second industrial revolution stage of the latter 19th and early 20th centuries.

Thus it’s no surprise that on the global innovation index, Latin America and the Caribbean together fall at number five among the seven regions of the world – below North Africa and the Middle East, and ahead only of Central Asia and sub-Saharan Africa.

The situation is so extreme that
in the past two years the region has dropped on eight of the ten indicators used to create the innovation index.

The digital gap between Latin American countries and the developed world is ever more notable, according to the World Economic Forum’s Global Information Technology Report.

No Latin American country sits among the top 30 on the list. A country like Brazil comes in at number 65, Mexico at 76, the Dominican Republic at 87, and Haiti
in last place, at 142.

With regard to the PISA exam, an international standardized test taken by students in 65 countries worldwide, the first Latin American country to appear in the rankings is Chile, in slot number 51.

Among the universities, the first in the region is the University of Sao Paulo, which in the global ranking appears at number 138. The next one, also Brazilian, comes in at number 327, and the third is the Autonomous University of
Mexico, at number 341.

Not much to flatter here. But if we also calculate the number of researchers per million inhabitants, as well as the total number of registered patents, the panorama gets downright grim.

Investment in Latin America and Caribbean countries in technology and innovation is just 0.8 percent of GDP, and of that figure some 70 percent comes from the public sector – the reverse of what happens in developed countries, where
private investment plays the larger role.

The future of innovation
Fortunately recent years have seen an increase in awareness amongst the people of the region of the importance of technology and innovation for national development.

Thus nearly all Latin American countries currently have a strategic national plan to promote science, technology, and innovation.

Likewise, several have created ecosystems
to support the development of their high-tech industries. The region has seen the proliferation of incubators and business accelerators, angel investors and risk capital, startups and innovation clusters.

Technology parks now exist in Mexico in the areas of Monterrey and Guadalajara, as well as in Argentina, Brazil, Chile, Colombia, Peru, Uruguay, Panama, and the Dominican Republic.

In the case of the latter, this is the Santo Domingo Cybernetic Park,
founded 16 years ago in 2000 during your correspondent’s first term in office.

Currently the Cybernetic Park is home to dozens of companies dedicated to software and mobile app development, biotechnology, manufacture of electronic tablets, and data protection over network access points (NAPs).

But now that the world is entering the era of the fourth Industrial Revolution, the countries of Latin America and Caribbean, based on the design and
application of national strategies for global value chain creation, can access this new reality to allow for an increase in production, productivity, and competitiveness in their economies.

In this new era, new goods and services will be produced such as those derived from the so-called Internet of things, from artificial intelligence, from robotics, from cybersecurity and defense, from renewable energy, from metadata, from nanotechnology, from the aeronautics and space
industry, from the rare materials industry, and from cloud computing, among others.

Inserting ourselves fully into this new stage of the knowledge society will require, in the first place, the training of highly qualified human resources.

But that in turn will require a radical transformation in the entire education system, from elementary school to university, with the aim of providing the coming generation of students with the knowledge, skills, and
abilities demanded by society in the 21st century.

For a decade Latin America lived its Golden Age, and during that time the progress experienced by several countries in the region was clear.

But that era vanished because it was unsustainable. It was founded, plain and simple, on exports, with no transformation, of raw materials and natural resources.

Now, if prosperity and progress are to have any sense of durability, it will be
essential to add value to the goods and services that are produced. But that can only be done by applying a new model based on equitable, productive transformation – a new kind of economy that combines a system of intensive labor, to generate jobs, with intensive capital, based on technology, to increase the volume of wealth production.

In achieving these aims, Latin America and the Caribbean will not only overcome the current digital gap but also recover from the
weaknesses and gaps that still remain in the second Industrial Revolution, to fully enter the era of the knowledge society.

I, for one, am confident this will be the case.

Related Link: http://leonelfernandez.com/articulos/el-encuentro-de-la-cepal/