If you’ve hailed a cab recently in Latin America, you have experienced a microcosm of the state of our region. Although ride-sharing services are growing – such as Colombia’s Tappsi and Brazil’s Easy Taxi and 99Taxis – regulations, levies and unions aren’t making it easy. Even the well-known Uber is having challenges as it expands in the region.

Adding to that, technology adoption is still behind other regions due to a lack of infrastructure and elevated prices. As a result, only 44.9% percent of Latin Americans are using smartphones.

As regional economic growth is slowing, it is time companies started taking full advantage of the Fourth Industrial Revolution by changing their mindsets to digital-first.

The example of transportation, and specifically the promise of digitally-powered ride-sharing, is a good model for exploring the challenges and opportunities in Latin America today. It exemplifies how legacy cultural and political institutions are at odds with digital progress, as well as the resulting social and economic benefits that this progress could provide.

We have too few companies in Latin America that are going digital-first, but those that do are great examples of the region’s potential. Brazilian digital bank Banco Original is the first in the world that allows customers to open accounts entirely online. Nubank, a Brazilian company with an online credit card offering, has caught the attention of Silicon Valley investors. Argentinian digital bank Galicia Move targets university students and has attracted over 35,000 clients in only one year of operation.

Companies need to shift their mentality from seeing digital as only a part of their operation to thinking of it as the catalyst for defining systems and processes and serving customers and constituents.

It is true that Latin Americans face regulatory hardship and often difficult government regimes. But they have shown great skills overcoming those challenges by developing high-tech solutions. Due to the uncertainty of our markets, companies that operate locally often have to present creative outputs, and in turn, this is creating stronger and better products that are being recognized in the international landscape.

The public sector has also been engaging in increasing the use of technology. The Colombian government, for instance, has created measures to encourage companies to migrate to the cloud and adopt disruptive technologies.

From a company’ perspective, these hard times should be looked at as an opportunity to be disruptive. It is also important to get in front of the opportunity, arriving first and building a scalable foundation in order to be successful in the Fourth Industrial Revolution. These opportunities tend to appear in three areas:

1. Translate broken systems into new business models

This theme also rings true with the ride-sharing market. A recent Reuters poll reported that 83% of women in Bogota, Colombia, do not feel safe using mass transportation; this is the highest of any Latin American city. With public transportation quality being so low, digitally-powered ride-sharing services are instantly accepted as a better alternative, and these services are taking that responsibility seriously. Tappsi, now merged with Easy Taxi, uses an in-depth process to screen its drivers to establish credibility and trustworthiness. The app also includes a secure chat function so that drivers and users can communicate anonymously without having to share contact details.

They are a great example of a company that is fulfilling local needs through digital transformation. In times when it is so easy to listen to consumers through social networks and analyse it with big data and analytics, companies should open their eyes to people’s concerns and innovate accordingly.

2. Cut through inequality by making small steps to connect the marginalized

Latin America boasts the fastest rate of smartphone adoption in the world – we are making up for lost time. From a company’s perspective, there is a clear opportunity to gain market share while the market is being created.

Tappsi, for instance, has found a way of engaging a public that is not even digital yet. They are a great example of in-flight innovation, offering a way for non-smartphone holding people to use its services. As long as you have a cellphone, users can text a code to a number, correlated with a location, to summon a ride. The company has also created bricks-and-mortar locations in malls and universities to connect with its potential users where they are, even if they don’t have a smartphone.

3. Break down public and private sector siloes and use innovation for social good
Latin America is undergoing political and economic change.

With a large millennial population and a growing sentiment of consumer empowerment, people are either turning to the private sector for innovations – or they are starting their own. As a result, compared with other regions of the world, Latin America is seeing major innovation specifically dedicated to social initiatives. For example, of the 50 funds in the Impact Assets 50 global ranking, 13 of them are focused on Latin America, including areas such as healthcare and affordable housing.

As trust in the private sector’s work continues to grow, it’s critical to connect the dots with the public sector. Latin Americans will likely start turning to the private sector to provide typical government services, and while they might be willing to pay a little more to get these services, integrating traditional government departments can help ensure the services are reaching the right people and are operating in a sustainable way.

A great example of innovation connecting the corporate and government world is a for-profit social enterprise in Mexico called SalaUno. It integrates private and public sector partnerships to offer eye care to low-income populations, and sees on average more than 3,400 outpatients monthly.

By acting upon these opportunities, Latin America can be a trend-setting region – and the new leader of the Fourth Industrial Revolution.

The World Economic Forum on Latin America is taking place in Medellin, Colombia from 16 to 17 June.