Chile and Puerto Rico: LatAm’s Top Digitally Competitive Economies

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The poor educational system and reluctance to embrace new technology solutions are weakening the digital competency of many Latin American countries. Yet, Chile and Puerto Rico shine as beacons of hope, according to the Digital Competitiveness Ranking, prepared by Swiss-based International Institute for Management Development (IMD).

Strong ICT infrastructure and pro-business policies are driving digital transformation in Chile and Puerto Rico. However, when it comes to technology integration, every country in the region lags.

The report emphasizes that adopting new technologies is no longer optional but essential for economic growth. Delays in tech adoption could widen the digital divide, hampering progress and limiting economic potential.

The IMD highlights technologies such as artificial intelligence (AI), blockchain, and quantum computing as key drivers of economic growth. AI, for instance, can enhance productivity, blockchain can improve governance transparency and reduce corruption, while quantum computing can bolster research and innovation.

The IMD analyzed seven countries: Brazil, Mexico, Argentina, Colombia, Chile, Peru, and Venezuela. The report’s analysts have urged Mexico to alleviate business community concerns by reducing policy uncertainty and strengthening democratic institutions.

Argentina, the analysts insist, should liberalize forex regulations and mitigate the impact of economic turmoil on businesses to support its digital companies. Brazil, the region’s largest economy, lags in many segments of the digital economy, primarily due to a lack of quality education, which perpetuates a talent shortage.

Colombia, according to the report, is preparing well for the future but is slow to adopt cutting-edge technologies like AI and quantum computing. Sporadic power outages in recent months are deterring investors, the report warns, suggesting that Colombia should rebuild its power infrastructure.

Chile: the Rising Star

Chile slipped from 39th to 42nd in the latest ranking compared to 2021. Despite this decline, the country’s strong ICT infrastructure and expansive data center networks position it well to harness advanced technologies. Valparaíso, a key port city, leads the way with average internet speeds of 321.85 Mbps, outperforming many U.S. cities and ranking as the world’s fastest for network access, according to the Global Speedtest Index.

Pablo Rossel Estay, head of BPO firm CGS’s operations in Chile, credits the country’s ICT advancements to its telecom sector liberalization in the 1980s. “Large-scale projects like the Humboldt Cable—a 14,000 km undersea link connecting Chile to Australia—have further reinforced Chile’s role as a regional data center hub,” he explained.

Claudia Perez, IT and Technology Recruitment Specialist at Robert Walters in Chile. While the report highlights significant efficiency gains among Chilean businesses and improved access to finance, Claudia Perez, IT and Technology Recruitment Specialist at Robert Walters in Chile, sees challenges, particularly for small and medium-sized enterprises (SMEs). “Many smaller businesses still struggle due to limited resources for digital transformation,” she noted.

A digital transformation law enacted in 2019 mandates technological adoption, but implementation has been sluggish. Cybersecurity, however, has seen notable progress, with stricter regulations enacted to safeguard personal information.

“Chile’s laws progress slowly, creating a complex regulatory environment. Some initiatives, like electronic signatures and data governance policies, have helped regulate aspects of the digital economy. Still, there’s much more to be done,” she added.

One of Chile’s most pressing issues remains the shortage of qualified tech talent. “While Chile has a sizable pool of tech professionals, the situation is complicated. Many lack certifications or the necessary skills for emerging technologies like Artificial Intelligence (AI),” Perez added.

The problem is exacerbated as foreign companies attract top talent with competitive salaries and fully remote work opportunities. Perez warns that a lack of advanced training and low technical skills could stifle Chile’s digital growth.

Promising Puerto Rico

Like Chile, Puerto Rico benefits from a strong ICT infrastructure. Despite the devastation caused by Hurricane Maria in 2017, the US territory rebounded quickly.

<img loading="lazy" decoding="async" class="wp-image-103514 size-medium" src="https://theamericannews.net/wp-content/uploads/2024/12/Chile-and-Puerto-Rico-LatAms-Top-Digitally-Competitive-Economies.jpg" alt="" width="200" height="300" srcset="https://theamericannews.net/wp-content/uploads/2024/12/Chile-and-Puerto-Rico-LatAms-Top-Digitally-Competitive-Economies.jpg 200w, https://nearshoreamericas.com/wp-content/uploads/2024/12/Jon.jpg 251w" sizes="(max-width: 200px) 100vw, 200px"/>Jon Hjembo, Senior Research Manager at TeleGeography. “Puerto Rico has a limited data center, peering, and cloud infrastructure. However, it does host landing stations for over a dozen submarine cables,” says Jon Hjembo, Senior Research Manager at TeleGeography.

Hjembo believes Puerto Rico’s ICT infrastructure has significant potential for growth in the coming years. “San Juan acts as a crucial hub for cables connecting Latin America, the Caribbean, and the continental United States,” he adds.

However, Puerto Rico faces a worsening talent shortage, a challenge similar to other Latin American nations. According to Boston Consulting Group, only 2.8% of the island’s workforce is employed in the digital sector, compared to up to 10% in comparable markets.

Higher education institutions are another weak point, producing only about 100 graduates annually in high-tech fields. Many of these graduates leave the island for better opportunities and higher salaries, particularly on the US mainland.

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