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The New Digital Revolution: from the Consumer Internet to the Industrial Internet

By Federico Mazzella ,
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The aim of this study is to explore digital technologies as a development tool, one that impacts patterns of economic growth and social inclusion both at the global level and specifically in Latin America and the Caribbean (LAC). In this regard, analyzing the effects of the digital revolution and its impact on public policies is of great relevance.

First, the study argues that the global scenario is shifting from a consumption-focused internet to one oriented towards both consumption and production. Germany, the United States, and China are leading this trend with changes to their manufacturing industries through digital technologies and advanced robotics. In this sense, when digital technology became widespread, innovations appeared in applications and services in all the economic sectors, including education, banking, health, and agriculture. As such, the greatest transformation in the economy can be seen in business models that are based on the Internet of Things, which centers on objects, people, and machines being able to interact remotely via the internet at any place and time as a result of technological convergence. Another phenomenon is found in online platforms that facilitate e-commerce, including that of SMEs. These are based mainly in China and the United States, where leading platforms such as Alibaba, eBay, and Amazon are hosted.

Second, the study highlights the progress that LAC has made regarding access to telecommunications, which has reduced the digital divide, although the region still lags behind developed countries in this regard. The most noteworthy of LAC’s indicators include the increase in the number of internet users (which has reached 50.1% of the population) and mobile telephone use, driven by the reduction in the cost of handsets and service fees. In LAC, mobile broadband is more widespread than fixed broadband, due to the range and affordability of mobile devices and the wider coverage of mobile networks.

Regardless, the study emphasizes that the situation varies from country to country: Chile, Argentina, and Uruguay have the highest proportion of users, while several Central American countries and Bolivia have the lowest. Similarly, rural areas have lower levels of internet penetration, which is determined by the availability of infrastructure. At the same time, there is a large internet access gap between richer and poorer households.

The publication shows that LAC’s share in global exports of IT-related goods is concentrated in a handful of countries: Mexico, Costa Rica, and Brazil. Furthermore, e-commerce in LAC stands at 2% of retail trade, which is below the global average.

The study concludes that the acceleration of technological change poses significant challenges if the region is not to be left behind in the use of new technologies. In terms of public policy, the study suggests that what is required is generating the conditions necessary for individuals and businesses to participate in the digital economy. On the one hand, it observes that it is essential to promote access to digital services and strengthen connectivity and broadband infrastructure. On the other hand, it argues that the issues of security, privacy, personal data protection, and consumer protection must be part of the regulatory agenda at the national level so as to promote a safe and reliable digital environment.

The value of the study lies in the fact that it provides indicators regarding LAC’s relative position in terms of digital technologies and the need for public policies that promote access, so as to take advantage of the opportunities that would be generated from the economic point of view.

Castillo, M. and Cimoli, M. (Ed.) 2015. “The New Digital Revolution: from the Consumer Internet to the Industrial Internet.” Santiago de Chile: ECLAC. July. (Link).

Castillo, M. and Cimoli, M. (Ed.) 2015. “The New Digital Revolution: from the Consumer Internet to the Industrial Internet.” Santiago de Chile: ECLAC. July. (Link).

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