Last week, the Biden administration hosted the IX Summit of the Americas in Los Angeles. The event usually convenes leaders from government, private sector and civil society to discuss pressing regional challenges. This year’s summit was a bit particular, to say the least.
The organization of the event was dysfunctional in some areas, and the guest list overshadowed its general narrative. The Biden administration refused to invite countries that reportedly violate human rights and that no longer adhere to basic democratic principles.
Some political leaders from Latin America and the Caribbean expressed early their willingness to skip the summit if every country in the hemisphere didn’t get an invite. Mexican President Andrés Manuel López Obrador (AMLO) led the effort to pressure President Joe Biden into extending invitations to authorities in Cuba, Nicaragua and Venezuela. These governments were not finally invited. Consequently, AMLO and several other regional leaders didn’t attend.
While most of the news coverage leading to the summit focused on the political drama over which governments were going to attend, Nearshore Americas kept an eye on the IV CEO Summit of the Americas, a side meeting of business leaders from all over the Western Hemisphere, hosted by the US Chamber of Commerce.
In case you missed it, last week, we convened business leaders and heads of state from across the Western hemisphere in Los Angeles for the CEO #SummitAmericas to discuss solutions that drive a better future for us all. Watch the sessions on demand📺: https://t.co/J0UJ3jPruV pic.twitter.com/0fBX3sLsSy
— U.S. Chamber (@USChamber) June 13, 2022
The CEO Summit, which this year had a significant focus on digital innovation, upskilling, digital infrastructure and e-commerce, set the tone for the dialogue about what are some of the policies and measures that governments should be taking in order to strengthen the region’s digital economy.
These were some of the issues discussed in the gathering.
Using Technology to Fight Corruption and Strengthen the Rule of Law
The CEO Summit (as well as the Biden administration’s foreign policy approach) placed significant attention on the topic of corruption and rule of law enforcement. This issue has shown a disconnect between the White House’s policy goals and the priorities of some Latin American authorities, prompting clashes between the US and several countries in the region. Most noticeable have been the collisions with the governments of Honduras, Guatemala and El Salvador.
However, the region’s business community seemed committed to address these problems from their side of the field. The summit highlighted the initiatives of several companies to use new technologies, such as artificial intelligence and blockchain, to strengthen compliance and anti-corruption mechanisms.
Policies to Facilitate Cross-Border E-commerce
Latin American and Caribbean countries are experiencing an e-commerce boom. Online retail sales in Latin America reached US$85 billion in 2021 and will likely get to US$160 billion by 2025. This would make it the fastest growing region in the world for e-commerce.
Cross-border e-commerce is another story. In Brazil, cross-border digital sales account for only 5% of total e-commerce numbers. In Colombia, Chile and Argentina, cross-border sales haven’t even reached 20% of total e-commerce. Mexico is the best positioned market, with 31%.
This represents a great opportunity, and governments in the region should take notice. The US government in particular should address the many regulatory and policy measures that restrict cross-border e-commerce. One immediate action the Biden team could take is to seriously consider the requests of several governments in the region, such as Ecuador, to sign free trade agreements.
— Luis Vicente Garcia G. (@lvgarciag) June 9, 2022
Retraining the Labor Market to Fully Take Advantage of Tech Innovation
The topics of training and upskilling keep popping up, and it was not different at the CEO summit. The vital relevance of education to solve the skills gap present in so many industries is now conventional wisdom.
Google announced a US$1.2 billion commitment to Latin America and the Caribbean for the next few years. In large scale, this money will benefit training and upskilling programs.
“Technology drives growth but you have to work hard to make sure that growth is inclusive and sustainable. That part needs a lot of extra work. I think it needs a particular focus from both the private sector and from the government.”-@sundarpichai, CEO @Google #SummitAmericas pic.twitter.com/ZOrME12aud
— U.S. Chamber (@USChamber) June 9, 2022
This is consistent with observed trends of industry-led education initiatives. More companies are embracing this concept, and governments are increasingly seeking public-private partnerships to secure training opportunities for their populations.
Access to Capital
The Latin America/Caribbean region is moving away from being merely an extractive economy and is now producing innovation hubs. The amount of entrepreneurship and tech talent that the region has generated in the last few years is significant. Today, it has over 40 unicorns.
This was made possible by the major influx of venture capital. Just in the first six months of 2021, Latin America and the Caribbean received nearly US$6.5 billion in venture capital investment.
Governments should rethink how they can allocate funds for employment creation. This year’s Summit of the Americas missed the opportunity to fully discuss a detailed proposal of what a reform to the Inter-American Development Bank could look like.
Though investment is key, inclusivity and sustainability remain the words of the day. Industry leaders agreed that the capital and supporting infrastructure needed to expand the digital economy in the region should also reach traditionally marginalized groups (like women and indigenous populations) in larger numbers. As long as fewer people remain connected and able to take part in these opportunities, the odds of taking full advantage of new tech and innovation will diminish.