Fourth Industrial Revolution

It's time for Latin America to forge its own future, and here's how

People look out to the Los Andes mountain range next to the city from a rooftop of a commercial center in a business district in Santiago, Chile, September 3, 2015.

Image: REUTERS/Ivan Alvarado

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Fourth Industrial Revolution

There are two stories being told about Latin America these days, and they could not be more different. On the one hand, there is the narrative of economic downturn, low commodity prices, inept monetary policies, of challenged political institutions and protests on the streets.

On the other hand, there is the narrative of a continent on the verge of an historical shift. Think of the economic re-positioning of Cuba, the peace process in Colombia, the new government in Argentina. Whilst it cannot be denied that scepticism and uncertainty remain, this narrative is accompanied both by hope and opportunity, underlined by a young generation’s desire to be more entrepreneurial, better educated and to make full use of technology to forge a more inclusive society.

How can Latin American leaders navigate global and regional challenges? How can they strengthen the continent's resilience - economically, socially and environmentally? And finally, how can they set an agenda for a prosperous and inclusive future?

These are the issues that will be discussed at the World Economic Forum on Latin America 2016, which takes place on 16-17 June in Medellín, Colombia, under the theme Reigniting Latin America’s Inclusive Growth. The meeting will bring together heads of state and government ministers from across the region, as well as global CEOs, international organisations, academics and youth representatives. With over 25 webcast sessions, you will be able to closely follow the conversation and actively contribute via the hashtag #LA16.

All of the transformations outlined above are happening against the backdrop of the Fourth Industrial Revolution, with new technologies merging the physical, digital, and biological worlds and fundamentally transforming the ways we produce, work and interact as humans. As the implications for governments, business, and society will be far-reaching, the key question for Latin America will be how it can not only embrace the opportunities offered by the Fourth Industrial Revolution, but how it can actively shape the way it unfolds in the region.

Image: World Economic Forum - Mastering Hypergrowth study

To get a better understanding of what is at stake, join the livestreamed panel discussion on Embracing the Fourth Industrial Revolution in Latin America on 16 June, 16:45 GMT-5.

Clearly, to be able to shape and fully embrace the Fourth Industrial Revolution, investments will need to be made in science, research and development and innovation in the region, with Medellín based company Ruta N a prime example of how collaboration between the public, private and academic sector can work.

Knowledge and skill sets also need to be brought up to speed – and this has to start with basic education. Building on that, the panel Creating an Innovative Ecosystem for Education on 17 June, 8:45 GMT-5, asks how Latin America can revamp education through policy reforms, smart use of new technologies and support of self-learning methods. For some background reading, here is a piece by education expert Susan Segal on Disrupting Latin America’s classrooms.

Image: OECD

Just as education will be the backbone of socio-economic inclusion in Latin America, entrepreneurship will be the cornerstone of prosperity in the region. The session, Entrepreneurship for Prosperity on 16 June, 13:00 GMT-5, will set out to understand how an enabling environment, including policy and partnership models, can be advanced and how access to finance can help take local ideas to a new level.

However, entrepreneurship alone should not be seen as a panacea to driving sustained economic growth and safeguarding the social gains achieved over the past decade. “Sudden, painful transitions from economic prosperity to slowdown and even meltdown are nothing new in Latin America”, writes Moisés Naím in The Coming Turmoil in Latin America.

Yet, this time, the possibility of the recently emerged, politically awoken middle class falling back into poverty creates the lingering danger of protest and, subsequently, social unrest. The expectations of government have risen in tandem with economic status. Weak public institutions, corruption and insufficient public services will no longer be tolerated.

Ultimately, it will be a question of what governments, citizens and business choose to do. How can they build a strong agenda for a prosperous and inclusive future? Follow the session Tackling Corruption on 17 June, 11:45 GMT-5, for more on this topic.

Latin America needs to not only continue strengthening its national institutions, but – at the international level – strengthen its position as a global economic player. Right now, only a few of the world’s biggest companies are from Latin America. Meanwhile, mega-regional trade agreements can be a stepping stone towards helping the region’s businesses to go global, with digital trade as the next frontier.

Yet, global integration alone won’t do the trick. Where will the new international trade agenda lead Latin America? is the question that policy-makers and experts will tackle on 17 June, 10:00 GMT-5. They will discuss how more value-added production and a better regional infrastructure can make sure that the international trade agenda plays out in the region’s favour.

Latin America needs to prepare for the post-commodity era. Low prices have put an end to unlimited social spending and persistently solid growth numbers. Combined with poor leadership, the effects could be particularly harsh for countries like Venezuela or Brazil, two countries which face another lost decade. Waiting for a new super-cycle could be in vain.

The time for a new growth model that builds on diversification and upgrading of traditional industries has come. The Fourth Industrial Revolution and entrepreneurship are huge opportunities for Latin America. Meanwhile, policies that target the strengthening of sectors such as services and tourism can also be pursued.

Follow the televised session, a New Growth Model for Latin America on 17 June 11:15 GMT-5, for more on this topic.

How can all of the above come together to form a new narrative for Latin America? How can the region be positioned as a destination for investment and business, one shaped by inclusiveness and trusted public institutions?

The city of Medellín shows us what is possible. Once known as the most violent city in the world, Medellín saw an 85% reduction in homicide rates between 2002 and 2014.

Image: Colombia Reports

As a new report by IDB and the Igarapé Institute points out, “social urbanism and ‘urban acupuncture’, together with principles of transparency and zero tolerance for corruption” helped to turn the city around. Today, Medellín is a hub of innovation and entrepreneurship and one of the most competitive cities in the world.

So, taking Medellín as its inspiration, what is the future Latin America wants to create for itself?

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

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Fourth Industrial RevolutionEconomic Progress
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