Yet the impact this transformation has on employment and economic reactivation remains unknown, especially in a region that is marked by social inequality and digital gaps, which have deepened during the crisis. In Latin America, almost 99% of companies are micro, small or medium-sized enterprises (MSMEs), representing 61% of jobs and contributing to almost 30% of the region’s GDP. According to the United Nations Economic Commission for Latin America, 2.7 million of these enterprises went out of business in 2020 due to the COVID-19 crisis. The sector recovery forecasts remain uncertain, mostly since the region has yet to face structural barriers such as informality, lack of access to markets and inclusive value chains, as well as low financial and digital inclusion rates.
The region has long recognized the potential of innovation and digital transformation to become the engine of economic growth. But despite the current efforts, the UNIDO Industrial Development Report 2020 revealed that Latin America only contributes marginally to the global creation and use of advanced production technologies. Moreover, the region endures low economic diversification and structural dependence on commodity exports, which together with remittances and tourism contribute more than 20% of the region ́s GDP. In order for Latin-American MSMEs to innovate and thrive in the era of the Fourth Industrial Revolution (4IR), the business environment obstacles need to be addressed. To leverage the increase in efficiency and productivity offered by digital transformation, governments must redouble efforts to remove barriers and encourage a market-driven approach to industrial policy focused on innovation, market competition, free flow of information across borders, mobility of skilled workers, research and development and investment in transformative technologies.
Featured speakers in this session:
- Mr. Bernardo Calzadilla-Sarmiento, Managing Director, Director of the Directorate of Digitalization, Technology, UNIDO
- H.E. Victoria Hernández, Minister of Economy, Industry and Commerce- Costa Rica - Alicia Bárcena, Executive Secretary - Economic Commission for Latin America and the Caribbean (ECLAC)
- H.E. LI Yong, Director General - United Nations Industrial Development Organization (UNIDO)
- H.E. Mr. Victor Bisono Haza, Minister of Industry, Trade and SMEs - Dominican Republic
- Leonardo Chacón Rodríguez, Vice Minister or Economy, Industry and Commerce - Costa Rica
- Gabriela Dutrenit, President, LALICS (Latin American Network for Economics of Learning, Innovation, and Competence Building Systems)
- Ruben Geneyro, President - INTI, Argentina