A businessman avoids puddles. Image: REUTERS/Luke MacGregor
When the Fourth Industrial Revolution takes hold in Latin America, it will be entrepreneurs who carry its banner.
Consider the enthusiasm with which this region is embracing digital technology. In the past five years, the percentage of Latin American households connected to the internet jumped from 16% to more than 50%. In 2015, Latin American’s mobile traffic grew by 87% and they spent more time on social media than any other region in the world. Then consider the region’s entrepreneurial spirit: more than 60% of the working age population in most Latin American countries view entrepreneurship as a desirable career (and that figure is more than 90% in some). Clearly this is a culture primed to make the most of the Fourth Industrial Revolution.
Already there are lots of examples of entrepreneurs riding the wave of exponential technologies in Latin America. There’s the entrepreneur in Paraguay that drew on crowdfunding to build Po Paraguay, a nonprofit that uses 3D printing to create prosthetic arms and hands in custom colours. Argentinian start-up Aivo has developed virtual customer service agents that use artificial intelligence to respond to customer questions and incorporate learning from each transaction. Making use of big data and sensors, Brazilian startup Strider is a mobile app that allows farmers to monitor their crops and BovControl is an app that helps ranchers track and manage livestock.
These efforts are being supported by investments across Latin America to promote and accelerate tech startups. Mexico already has over 100 incubators, 20 accelerators, and numerous crowdfunding platforms and is expected to spend around $1 billion dollars funding entrepreneurial activities through 2018. The Brazilian government supports tech entrepreneurs with up to $100,000 grants. And Startup Chile, a government initiative to promote entrepreneurship, recently extended its funding to offer an additional $100,000 to technology firms. Venture capital has also been growing in the region: last year, private equity firms raised $7.2 billion in Latin America - mostly for tech ventures - with this year's first-quarter $4 billion higher than the same time period in 2015.
But even with a strong entrepreneurial spirit and a strong uptake of technology, Latin Americans will still have some difficulty capitalizing on Industry 4.0. Talent is one stumbling block. Five of the top 10 countries in the world where employers are having a hard time filling jobs are in Central and Latin America, according to a Manpower survey. In Colombia alone, there is a deficit of 15,000 telecommunication and software engineering professionals, which could rise to 90,000 by 2018. A lack of connectedness - of particular importance for the Internet of Things - is another hurdle, with the region not keeping pace with the rest of the world: Latin America is expected to increase connectivity by only 32% in the next five years, versus the global average of 43%.
At this week’s World Economic Forum in Latin America, these are the types of challenges that will be addressed, as it takes on the topic “Reigniting Latin America’s Inclusive Growth” in Medellin, Colombia. And with more investment in talent, education, and infrastructure clearly needed, the question is not whether Latin America’s entrepreneurs are ready to march forward into the fourth industrial revolution - but is Latin America ready to support them?
The World Economic Forum on Latin America is taking place in Medellin, Colombia from 16 to 17 June.
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The views expressed in this article are those of the author alone and not the World Economic Forum.