Financial and Monetary Systems

How new technology will help Latin America thrive

Alfredo Capote
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Education and technology are deeply entwined in setting the pace at which a country can generate significant competitive advantages. A country’s ability to improve productivity relies on having a large pool of capable human resources to draw from, and technology for them to use.

Education allows individuals to adapt and transform themselves. Using readily available technology across a number of sectors helps people to plug into a global customer base. In the wake of the financial crisis, successful countries will be those that are able to create “hubs” around export capabilities to generate jobs, improve productivity, spur internal consumption, increase trade, improve tax collection, reduce current-account deficits and debt burdens and continue to spur economic growth.

The key challenge of investing in education is that measuring returns on the money spent can only be done in the medium to long term. It is critical that policy-makers have a well-developed plan to design the long-term capabilities of a country. For example, if a country decides to become a major manufacturing hub, the need for engineers should be a priority. Developing a focused strategy for education policy can yield better results, since students are likely be better at using new technologies and adapting existing ones.

There are plenty of examples of countries that decide (via their governments) to increase their regional status by becoming a producer of a key new technology. Spending education budgets on training up young people in the skills a country needs or wants to develop, helps to drive major differentiation among groups of countries in the world.

Korea, for example, has decided to become a major player in the world of semiconductors and related technology. Equally, Canada, the US and Mexico have decided to fortify their manufacturing advantages by securing the cheapest sources of energy. The education infrastructure of each of these countries varies widely, but in all cases properly planned investment in human capital can become a real long-term advantage.

Yet while countries plan their education strategies, technology evolves at ever greater speed. A pessimistic view would be that no education plan can keep pace with the development of new technology. But I would argue that if we base educational policies on industries that can benefit from and even be developed around specific technologies, we can ascertain which educational building blocks are required. Conversely, investing in technology that will both enhance and support specific education programmes can create a sound and sustainable basis for development.

More than ever, technology can be used to adapt and change existing conditions, allowing people to make better use of the educational resources available and reward their country’s investment. For the countries of Latin America, having a clear vision of the core competencies they would like to have, and designing education programmes around them, can result in a highly competitive labour force and a platform for sustainable growth.

Author: Alfredo Capote, Managing Director, Head of Investment Banking, Mexico, Citi, Mexico. He is participating in the World Economic Forum on Latin America 2014 in Panama City.

Image: First graders work with XO laptop computers at a public school in Montevideo October 13, 2009. REUTERS/Andres Stapff

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Financial and Monetary SystemsEducation and Skills
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