LatAm region experiencing ‘digital growth spurt’ MasterCard study shows
Puerto Rico nabbed the second place behind Chile in the ranking of countries and territories showing the most significant “digital growth spurts” during the 10-year period between 2008 and 2017, according to the Digital Evolution Index: Latin America and Caribbean Edition study.
The research, commissioned by MasterCard and the Fletcher School at Tufts University, shows that Puerto Rico scored 54.7 in the ranking, trailing only Chile, which had a score of 58.7.
The study measures the pace of digital growth in 24 Latin American countries across four key drivers of supply, demand, institutional environment, and innovation. It utilizes 99 unique indicators measured over the 10-year period to create an overall digital evolution score and digital momentum score.
Regarding that second category, Puerto Rico placed 19 out of 24 in the ranking, with 2.2 percent, falling into the “steadily advancing” bracket, along with the likes of Panama, 2.7 percent; Guatemala, 2.6 percent; Jamaica, 2.6 percent, Nicaragua, 2.5 percent and Trinidad and Tobago, 2.5 percent, among others.
The Digital Evolution Index concluded that Chile, Costa Rica, Uruguay, Mexico, and Colombia are the most digitally advanced nations in Latin America. In the Caribbean and Central America, that recognition goes to Puerto Rico, Bahamas, Panama, Barbados and Trinidad and Tobago.
The five countries are propelled by the relative stability of their institutions, pockets of innovation, and recent improvements in information and communication technology, infrastructure to cater to the growing demand for digital goods and services, the study confirmed.
Furthermore, it also indicated that the region must close gaps in digital connectivity, financial inclusion, and infrastructure to improve its digital momentum.
With the number of Internet users worldwide crossing 4 billion, the global digital economy has become a space of immense opportunity. Consequently, being digitally competitive has become a priority for governments, businesses, and citizens, the study stated.
“We decided to focus our digital evolution research lens on the LAC because the region is at a point of inflection. After 15 years of commodities-led expansion at the start of this century, the region is poised for consumption-led growth in the coming decade and is expected to account for over 5% of global consumption growth by 2030,” said Bhaskar Chakravorti, dean of Global Business at The Fletcher School at Tufts University and founding executive director of Fletcher’s Institute for Business in the Global Context.
“For this to be true, digital products and services will have to be a significant part of the consumption basket,” he said. “The aim of this research is to provide policymakers and businesses with data rich insights to enable them to unlock the tremendous potential for economic growth through digital advancement in this region.”
Meanwhile, Carlo Enrico, president of Mastercard’s LAC region, said the “data-driven comparison of the digital evolution of Latin American and Caribbean countries with each other and with global peers is key to distilling best practices to close gaps across drivers of digital momentum; identifying opportunities to leapfrog; and facilitating collaborative decision-making by policymakers and businesses to advance the digital economy of the region.”
The study shows that countries in the Latin America and the Caribbean are at a crucial turning point — with the right mix of digital-first policy interventions, supply infrastructure stimuli, and a push to improve digital and financial inclusion, the region can unlock its true digital potential.
“Adoption, the quality of digital infrastructure and institutions, and innovation collectively shape a country’s digital competitiveness. Governments and businesses play a vital role in steering the digital progress of nations,” Chakravorti said.
“Consumers in Latin American and the Caribbean, in particular, will benefit tremendously from intergovernmental collaboration to flatten the barriers to intra-regional digital trade. Jumpstarting regional digital commerce and fostering the creation of regional digital marketplaces will create pathways to economic inclusion to the many millions of underserved populations,” Chakravorti said.
While the region has made improvements in telecommunications infrastructure over time, digital transactions infrastructure has not evolved at the same pace, according to the research findings.
“Improving the accessibility, convenience, and security of digital payments will accelerate the growth of internet commerce and improve the digital momentum of the entire region,” Carlo said.