Nearshore Americas

Report: LATAM Digital Economy Created US$195 Billion In Revenue In 8 Years

The digital economy in Latin America created 900,000 jobs and US$195 billion in revenue in the space of eight years between 2005 and 2013, finds a study sponsored by the Economic Commission for Latin America and the Caribbean (ECLAC).

The revenue it generated is equivalent to 4.3% of cumulative GDP growth in the region, the reported released in the Futurecom conference in Brazil stated.

This significant growth in revenue and adoption has given rise to a call for setting up a digital ecosystem that provides greater space for Latin Americans to excel.

Although more than half of Latin Americans are involved in the digital economy in some way or the other, most of the applications they are using are not created in the region. Of the 100 most-visited websites in the region, only 26 are local. As a result, 63% of the traffic flow is international, going mainly toward the US.

Therefore, the study advocates the creation of a single Latin American digital market that capitalizes on some of the region’s unique advantages. For example, most of the countries in the region, except for Brazil, speak Spanish.

The digital economy in the region is mainly inclusive of telecoms and internet-based services. The report however admits that decline in the price of services and equipments lured a lot of players into digital economy, resulting in a sharp rise in number of Internet users.

The report also calls for creating a productive model based on entrepreneurship and innovation, capable of developing a local industry content, powerful applications and services, creating more jobs and opportunities for the society.

The ECLAC has often argued that digital economy is a crucial force for boosting structural change, making progress to reduce inequality and strengthening the social inclusion.

The research was headed by Argentine researcher Raúl Katz, professor at the Columbia University, and funded, among others, by Telefonica. The survey also presents recommendations based on workshops held in Argentina, Brazil, Chile, Colombia, Mexico and Peru.

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According to the Boston Consulting Group, Brazil alone will account for about 2.6% of the global digital growth by 2016. It is believed that more than 85 million people connected to the World Wide Web in Brazil.

Narayan Ammachchi

News Editor for Nearshore Americas, Narayan Ammachchi is a career journalist with a decade of experience in politics and international business. He works out of his base in the Indian Silicon City of Bangalore.

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