Latin America's Other Big Internet Problem
Latin America's Other Big Internet Problem

by Andres Oppenheimer

While I was watching Brazilian President Dilma Rousseff inaugurate a world summit to discuss the future of the Internet and prevent new instances of U.S. electronic spying, I couldn't help thinking: that's all very nice, but she should also be spending time trying to stop her country's relative decline in Internet technology.

Granted, the world needs to find new ways to protect itself from any government intrusion into the Internet (we've discussed this in previous columns, and will come back to it in future ones). But, just as important, emerging countries - especially in Latin America - should be spending more of their energies into updating their Internet technologies, because most of them are falling increasingly farther behind.

A massive new study released by the World Economic Forum, titled "Global Information Technology Report 2014," includes a ranking showing that Brazil, Mexico, Argentina, Bolivia and Venezuela have lost ground in their Internet capabilities over the past year.

The study's Internet "readiness" ranking of 148 countries around the world shows that the world's most connected countries are - no big surprises here - Finland (1), Singapore (2), Sweden (3), Netherlands (4), Norway (5), Switzerland (6), the United States (7), Hong Kong (8), United Kingdom (9) and South Korea (10).

Among Latin American and Caribbean countries, the highest on the list is Chile (35), followed by Panama (43), Costa Rica (53), Barbados (55), Uruguay (56), Colombia (63), Brazil (69), Mexico (79), Ecuador (82), Jamaica (86), Peru (90), Dominican Republic (93), El Salvador (98), Argentina (100), Guatemala (101), Paraguay (102), Venezuela (106), Honduras (116), Bolivia (120), Nicaragua (124), and Haiti (143).

What's most troubling is that Latin America's biggest countries have fallen from their standings in last year's ranking. Brazil dropped nine places, Mexico fell 16 places, the new ranking shows. The index measures 54 variables, including Internet infrastructure, and the quality of countries' education and skills to use information technology to create new products and services.

Benat Bilbao Osorio, one of the co-directors of the report, told me in an interview that while most Latin American countries are making progress, other countries of similar development levels in Southeast Asia and other parts of the world are moving much faster. This means that not only "Asian Tigers," such South Korea and Taiwan, have surpassed Latin America, but also less industrialized Asian countries, such as Indonesia, Philippines and Thailand, he said.

"There are several areas in which many Latin American countries are falling behind, especially those that have to do with human capital, education, and skills, which are just as important as Internet infrastructure," Benat Bilbao told me. "Most people in the region use the Internet to write e-mails, but what's missing is using the Internet in ways that have an economic impact, such as creating new business models or revolutionary companies, such as"

In other words, most countries in Latin America are Internet users, but are not using the Internet to create new ways of doing business, or new applications to use existing technology for more efficient uses.

Granted, there are pockets of information technology innovation in Latin America, such as Brazil's aviation industry or Mexico's automotive industry, but they are mostly limited to a few giant corporations. "What's needed is to bring this down to small and medium-sized companies," he said.

My opinion: Rousseff and every Latin American president should read this ranking and be alarmed by it, because we are moving increasingly faster into the information economy (or, to use a trendier term, the era of "big data").

As the World Economic Forum report well says, with the magnitude and growth of data around the world, we are seeing a data processing boom rivaling the San Francisco gold rush of the 1800s, or the Texas oil boom of the 1900s.

Data have become the new equivalent of gold, or oil. Countries that are best prepared to process data and sell them will be the most prosperous, and those that don't will be the least prosperous. So my message to Rousseff and most of her counterparts is that it's ok to worry about the future of Internet privacy - we should all worry about that, and do something about it - but it's a cause that should not divert them from the urgent task to improve Internet infrastructure and education skills, like other countries are doing to benefit from the new information economy.