Latin America Competitiveness: Poised but Unproven

Burden Hall was full of attendees and optimism, but the mood was tense as Sara Sievers, Executive Director of the Center for International Development (CID) at Harvard University, presented the results of the CID’s Global Competitiveness Report about Latin America. The results of the Latin America Competitiveness Report, which were also presented to the World Economic Forum, indicated that, Latin America scored somewhat poorly on the CID scale of overall competitiveness.

Sievers said her organization’s index used three key components: technology, governance, and general macroeconomic factors. She said the stress on technology in the CID report is a differntiating factor from other competitive reports in the region, adding, “We felt strongly that technology was a strong component for growth, and that countries that were “getting it right were getting ahead.”

n Latin America, the CID classified countries into three categories in the technology dimension: innovators, appliers, and nonparticipants. The report found that Latin American countries tended to apply technology very well, but the region as a whole “wasn’t positioned as strongly as it needs to be in order to sustain the growth we’d like to see,” said Sievers.
For instance, Sievers pointed out the huge gap between the number of U.S. patents per capita in the U.S., which is approximately 350, versus Latin American countries, which average no more than two per person. The disparity ranks Latin American countries low on the “innovator” scale.

Sievers stressed the need for Latin America to concentrate on opportunities in the information and communications sectors. She stressed that governments, universities, and the private sector should work together to target investments to raise the overall sophistication in the technology and communications sectors.

Other areas for improvement, said Sievers, include reducing bureaucratic barriers to starting businesses in the region and lowering corruption levels. She stressed the need for further market-friendly reforms, a stronger judiciary system, focused use of natural resources, export diversification, and developing R&D for the ability to apply technology from other countries more effectively. Said Sievers, “The challenge is that these countries must do all of these things, and they must do them all in tandem.”