As the world economy shifts toward becoming more knowledge-based, industrialized countries have been at the forefront
of investing in research and development (R&D), spurring innovation-driven enterprises, designing public policy
that fosters innovation and entrepreneurship, and pushing the world’s technological frontier. The digital and data
revolution has created new economic opportunities for the poor and vulnerable by paving new paths towards social
inclusion. By accelerating the pace of change, technology creates opportunities for those disrupting how companies,
governments, and labor markets function, offering up innovative solutions for tackling pressing societal problems.
The digital and data revolution has created new economic opportunities for the poor and vulnerable by paving new
paths towards social inclusion.
However, in Latin America and the Caribbean, there are a number of barriers impeding countries from fully harnessing
the power of knowledge-intensive industries, innovation, and entrepreneurship for economic growth. Private and
public investment in R&D and innovation remains low—on average 0.78% of the region’s GDP is spent on R&D, well
below the 2.4% spent by OECD countries in 2011. Financial systems are unprepared to meet the needs of tech-based
and rapid-growing enterprises, venture capital is still incipient, accelerators and incubators often lack sufficient
capacity, links between research and industry are limited, and the inability to find skilled workers has become
one of the region’s main obstacles to growth. As a result, the region’s productivity—the main driver of long-term
economic growth, is lagging behind most other regions. For example, productivity growth in the typical Latin American
and Caribbean economy is 40% of that of the typical East Asian country.