Latin America and the Digital Economy Challenge

Opportunity and Risk at the beginning of Latin America’s third

century of independent life.
Dr. Miguel Angel Gutierrez

Abstract

The world’s big socioeconomic transformations show that the appearance of

new technological elements has significantly changed production relations and
has also modified social, cultural and political relationships. This change will be
even greater in the near future.
Latin America became independent republics between 1810 and 1824, and thus
started its national construction within the framework of a European economy
industrial revolution’s opening international markets to the surplus production.
This became in fact an economic re-colonization, beyond its formal political
independence.
As Latin America is about to start its third century of political autonomy, the
digital revolution provides a new opportunity to articulate that freedom of action
as a national community’s totalizing institution to exercise alternative
strategies.

1. Outstanding characteristics of the information society.

The world’s big socioeconomic transformations show that the appearance of new
technological elements has significantly changed production relations and has also modified
social, cultural and political relationships. This change will be even greater in the near
future. Undoubtedly, the world today lives a convergence of information and communication
technologies where the network acts as a global brain linking individual brains in a fabric
similar to a self-organized mechanism whose main task seems to be humankind’s collective
intelligence upgrading.
Such changes have emerged in the past decade. New technical means1 work as a
prosthesis extending the individual’s senses and capacities, thus giving him access to new
dimensions beyond face-to-face contacts.
Where the new technology will lead us is still unknown. It goes far beyond the
imagination of those who develop this new device generation. The impact of new
technologies has always been higher than that expected by their authors. The Benedictine
monks invented the mechanical clock in the twelfth century to establish their praying sessions
as well as other monastery routine activities. However, it became a social reorganizer for
many of man’s activities, particularly his work and studies; it acquired economic value; it
introduced the idea of regularity in the production of a certain product; it measured the
speed of communication means and of the man himself; and it dramatically changed the
sense of the time it measured. Likewise, Bell conceived the telephone as a machine to
improve deaf people’s sense of hearing. Edison thought the phonograph was going to be a
dictation machine. Today we can see the new technology’s potential to increase the speed,
the amount, or the profitability of what we do every day. But the real challenge and
revolution is its ability to articulate new ideas for goods and services, to generate new
products, processes and users, to design a new world and the new kinds of sociability its
impact will create.
This new kind of society acquires characteristics of its own, which are firstly
evidenced in a different way of perceiving and understanding topological properties of that
new space-time, especially the irrelevance of distance or “distalidad” (the uniform
separation between trajectories, farther away or nearer the rest), and being a fundamentally
important change in the spatial organization of social relationships. Space and time connect
with each other, and make each other relative. As a result, space today does not restrict the
flow of information, ideas, symbolic contents, and an endless range of human interactions. It
is here where mental distances determined by actors themselves become relevant for their
capacity to interact with other people, even those unknown to them.
Another significant aspect of the information society is the organizational
transformation of its kinds of sociability: family, institutions, companies and organizations,
where a hierarchic or pyramid organization turns into a network-like and horizontal one. This
becomes a major change since such organizations must play an inexcusable part in the
individual’s socialization process, i.e., to make and transmit the history as well as to produce
and distribute the resources of a certain society. Besides, they greatly contribute to form the
individual’s identity because it is there where the individual meets his peers and “the others”
rather than in informal groups. All this will help the individual not only to know who he is, but
also to consider himself capable of building his own future.
But what will this future world be like? A combination of the two previous
characteristics brings about what is known as the reduction of the world’s relative size. For
Horacio Godoy, who is a dear friend and a pioneer, the most noticeable consequence of
globalization is the reduction of the world’s relative size (RS), this result being a relation
between the space size (distance, D) and the time needed to traverse it (speed, S), which is
expressed as follows: RS=D/S. As the speed of information flow increases, the significance of
the distance is reduced until it reaches zero. When we come to this moment, when the
achieved speed is immediateness, the world’s relative size is equal to real time (rt). Thus, in
the globalized world we live in, the world’s relative size (RS) equals real time : RS=rt. Such
disappearance of distances – distalidad – generates a new scenario where it is possible to
participate in several environments at the same time, therefore, increasing our potential
dramatically.
This new organization the society acquires allows for greater speed in the
information transmission and in the way it is structured and introduced in knowledge and
production. At a General Directors Summit of his company at the end of the 20th century,
Gates stated that the 1980s had been the decade of quality, the 1990s, of process
reengineering, and the first decade of 2000 would be that of speed, of celerity in transactions
and in the change of enterprise nature. A real time enterprise is, first of all, a service
company that provides the customer with answers, is an innovation leader and has a new
digital system which offers all the necessary information stimulating decision-making
responses as needed.

2. Characteristics of the information society and the global economy

The new information and communications technologies integrated to the world

network generate a global culture with a strong scientific basis that threatens to homogenize
and probably eliminate the identity of local, national and regional cultures. Their survival is
not guaranteed by their mere resistance to technological changes. Thus, it becomes crucial to
know, without preconceptions, the new reality so as to redefine our role and make the
cultural universe a fertile soil capable of nourishing different identities.
Such tension reminds us of the internationalization of Latin when printing was
invented and the threat that the spread of cultivated Latin represented to the survival of
local languages (today this is an issue debated in the European Community simply for
economic reasons), which finally resulted in a revalorization of local languages and cultures.
However, it is impossible to ensure the same consequences at present.
This new global technological infrastructure works in the individual as an expansion of
his perception capacity altering the balance of his previous senses. Technology interacts with
the individual, extends his perception, knowledge, and understanding capacity, but it also
changes his internal balance, allowing his communication possibilities to grow beyond limits
and thus, making the individual global as well.
The economy has reached a new age: the age of an industry which is not based on an
innovative businessman’s technological, commercial and financial skills, but on the
intellectual ability of all the members of the company, regardless of their positions and
duties. The network appears as a sort of self-organized market where the ideal of free trade
can be carried out with little control and regulation. This is a new economy founded on
knowledge and whose only threat stems from governments and their attempts to regulate it.
From the globalization perspective, it is also seen as a transition of local and national markets
to regional and global ones. It emerges as the new operation theater for the war of brands
and competitiveness where companies can have access to distant markets.
This shows us the appearance of a new socioeconomic system whose dynamics rests
on the so-called information industries and which reveals a strong tendency to concentration.
These industries have more and more powerful corporate leaders: the big global companies.
However, results and concentration do not ensure their permanence. According to Fortune
ranking, out of the 500 biggest global companies, more than two thirds will disappear within
the next five years due to the extremely high market’s dynamics.
As regards the change of roles of macro social actors, like the State-Nation, the
network structure turns the hinge-like or articulation function between an external world
politically organized according to the international system and economically based on
international trade and an internal world subjected to the State’s authority into a network-
State composed of supranational, national, autonomous, and local levels which negotiate and
interact with each other. This State cannot autonomously decide its currency, financial, or
economic policy and, if it can allocate resources to different internal positions, it can only do
so within the limits of externally established spending programs.
The possibility of recovering autonomy by the mass introduction of new
technology in the local, national, or regional public and private sectors brings about the risk
of misusing the technological potential. Such threat, which means extending
underdevelopment, has been given the name USTED syndrome by Horacio Godoy and, like ill-
famed AIDS, poses a danger to societies. In Spanish, USTED is an acronym that stands for Uso
Subdesarrollado de Tecnologías Desarrolladas (Underdeveloped Use of Developed
Technologies). It means that the possibility to innovate by using new technological
developments is limited to the application capacity of the people who use them and to the
perseverance of doing the same as in the past, but more efficiently. As a result, technological
updating becomes disappointing if nothing is done about the intellectual ability of those who
have to use the innovations. It is essential to clearly determine the application context, the
new material potential, and the need for new skills to understand innovation not only related
to the goods and services offered before, but also to the introduction of new ideas and new
value of old products to improve the social duties performed by the State, institutions, or
corporations.
Likewise, it is not enough to increase the offer of new high-tech products to
more consumers. It is necessary to make them help create equal opportunities, individual’s
self-education, and social institutional and community improvement. This is the deep sense of
technology democratization. No more consumers of sophisticated technologies, but the
intelligent use of those technologies to serve everybody, everywhere, now.
The need to give new sense to individual actions and social ties after this new
relation between man and technology must be based on truly universal values that can be
globally accepted. This implies a real challenge in order to be up to the time we have to live
in and a change of roles of macro social actors. Public and private institutions, the State and
the economy, science and technology all must serve these values without hampering each
community’s own values. The key to putting this challenge into practice is leadership, which
must be fundamentally moral, but also technical as today’s management calls for intense and
permanent training.

3. Is the digital economy only innovation or is it the possibility of a significant

change?
 The new digital economy represents a transition from a shortage economy to a plenty
economy as it implies the transformation of a material goods-based economy into a digital
goods-based one which is capable of providing not necessarily a physical supply, but one that
is equally real and even more valuable.
Giving value to products in a digital economy is separated from the cost of raw
materials and the need for a big organization vertically integrated by departments and
business functions. In the new economy, the value depends more on the product or service
knowledge than on its material support, which is sometimes so insignificant that its
reproduction and transmission or redistribution may have a marginal cost of almost zero.
Moreover, the increase in value takes place in the network rather than in a physically and
organizationally defined company.
Network business creates a global supply and consumer market. Networks allow the
linking phenomenon to take place, thus increasing the company’s ubiquity, multiplying the
initial supply range, and making the investment return rate higher than in the conventional
economy.
The growth limits are no longer in nature (material resources) or in culture (capital
and organization): they are inside the individual himself as a producer and consumer of
knowledge and digital goods and even in the superabundance of information.
On the other hand, although the reduction of prices of knowledge-based products
causes a deflation tendency in the long run, it also generates new expenses, such as research
(time and resources), negotiation and hiring, resource and process coordination, as well as
design expenses since in a digital economy the image becomes essential and performs a key
role in the economic organization.2
Among the dark points are a higher destruction potential and scientific and
technological management risk. There are several examples: the potential access to weapons
of mass destruction, which justified the last war on Iraq; the ease of communications and a
national government’s lack of ability to understand the signals of a new and potentially lethal
epidemics like SARS, which is striking the whole world today. Either due to willingness, lack of
knowledge, or inability, environmental threats can arise going beyond their local or even
national frameworks: technology becomes a vector for that.
Another highly important aspect is the threat to privacy and individual freedom. The
Copernican turn in national security issues in the United States after the 11 September 2001
attacks has made it possible to control all kinds of communications, including private ones at
home if suspected to be a threat to security. Companies will soon recover their right to watch
their employees and consumers for the same reasons. In this sense, technology has also
developed rapidly. Practically all personal communications, business transactions, work,
education, and entertainment can be digitalized and watched by the states or their
challengers. The one who loses is the individual, who sees his privacy and his own human
rights suspended.
 Technological unemployment becomes another threat both at individual and social
levels. Change dislocates labor relations, moves people from one activity to another, and
replaces them with machines or robots. The new technology calls for new skills; workers lose
stability and nobody can guarantee their retirement at the age traditionally required by the
industrial society.
The gap between the rich and the poor is represented in the digital world between
the people who have access to information and those who do not. Besides, the possibility to
obtain education and employment or to make transactions depends on their participation in
the new technologies. Isolation and social exclusion become more dangerous and serious.
In the private sphere, marital, parent-child, and friend relations are restricted to the
network. The time devoted to it is spent mainly individually, not in groups, except in the case
of labor relations.
Just as the economy is not the market, the network offers space for commercial
exchange and the appearance of new markets, but it is much more than that. It would be
very negative to reduce it to such dimension, although it can be the most profitable. Taking
this warning into account, let us see the idea of a Sistema Nervioso Digital (SND – Digital
Nervous System). This is a concept created by Gates in his new book Negocios a la velocidad
del Pensamiento (Business at the speed of thought). A SND is the group of digital processes of
an organization. These processes involve not only technological changes, but also the
institution itself, be it public or private, since they determine information exchange and
decision-making.
Our starting point here is that all the information of a company or an organization
tends to be digital, be it text, sound, image, video or any other, thus allowing (and to a
certain extent forcing) all this information to be accessed to and exploited through the local
networks, intranets, and the Internet. Therefore, tools and mechanisms to make this process
easier should be provided. What’s more, being the Internet an integrator of a large number of
technologies and benefits, it must be considered as the main communication platform.
Knowledge, digitalization, virtualization, molecularization, integration, work through
the Internet, non-intermediation, convergence, innovation, cyber chatting, pre consuming
orientation, fastness, globalization, and discordance are the issues proposed by Tapscott3 in
relation with the e-economy. Any of them are enough to cause a real revolution in the world’s
economy and the world itself, but the persistence of the old business culture makes these
changes be seen as a deepening of the old economy tendencies, an increase in profits and
accumulation of surplus, which is real, but not necessarily the direction we want our
economic systems to go in.
It is useful to review a very tight vision of the economy’s lineal development, like the
one offered by Tapscott, to be able to transcend innovation in a significant change aiming at
the nature of economic relations.
 As the chart shows, from this perspective the digital economy appears at the end of
the global capitalist development process, but the structural relationships among high,
medium, and low development countries remain unchanged. On the contrary, the digital
economy development will deepen present gaps. Then, it is necessary to see the potential of
this economy’s new developments from the point of view of our countries considering a new
potential growth model.
For Latin America, the e-economy constitutes a risk and an opportunity at the same
time. For it to be an opportunity, the digital economy should be used to foster a true change
in the development model.
The digital economy’s development potential involves the emergence of a new
paradigm in the economy and in wealth creation, but for this revolution to be authentic, it
should also mean a new paradigm of redistribution, allowing equal conditions for everybody
to have access to health, education, work, and information. Otherwise, the gap between
developed and underdeveloped countries and between the rich and the poor will widen.

4. Conditions of technological innovation

The United Nations Development Program has included the number of scientists and
technicians as an indicator of human development. Therefore, the development of a country’s
science and technology (measured in terms of human resources devoted to science and
technology) is linked to its human development. However, what happens when the evaluation
criteria for scientific and technological capacities in central countries are applied to
peripheral countries? What is the suitable indicator to measure scientific and technological
development in different national contexts? Not all scientific knowledge has the same
relevance in every country. But the idea of relevant science in capacities evaluation raises
questions as well, such as Should science be evaluated only because it is successful in
producing directly applicable knowledge? or Does the existence of a certain level of scientific
activity generate benefits to the society through its people’s education or through the spread
of scientific ethos values? These questions are also related to the theoretical discussion on
the measurement of science outputs, especially in developing countries.
The research priority question has different answers in central and peripheral
countries. For example, since 1994 the US Congress has been worried about a supposed loss of
competitiveness of its economy and demanded that 60% of the National Science Foundation’s
budget be allocated for projects “relevant to national needs”. In France, the National Center
for Scientific Research has defined “the advancement of science and social and economic
progress in its country” as its primary mission.
In our region, while the Brazilian State supports research as the “fulfillment of
its commitment to promote and stimulate the production of knowledge necessary to social
and economic development”, in Argentina science and technology problems are linked to the
scientific system’s definition and organization, priority ranking, financing, evaluation, and the
relationship with universities. Thus, research is hardly connected to production and
consumption.

However, today Latin America is less involved in science and technology in the
international context and it is more marginalized than in the 1960s and 1970s from the
spheres where scientific and technological dynamism is generated. As regards publications,
the USA alone represented 30% of published works, while 90% of scientific magazines in Latin
America are not included in any index, which makes them anonymous. Although third world
researchers represent 24% of all scientists in the world, they are practically ignored by the
international scientific community.

Nevertheless, it is worth noting that the region is perceived only through its
largest countries, although it is made up, fundamentally, of small countries. This is due to the
relative importance of the 4 or 5 countries which concentrate more than 70% of the regional
population, to the economic significance of domestic markets, and to the political influence
and strategic characteristics of such countries in the international system. Therefore, the gap
between developed and underdeveloped countries at a global level is also present within
Latin America.

It is believed that scientific knowledge and technological development always benefit

humankind, but their achievements do no reach everybody and their benefits are not equally
distributed. On the contrary, they are concentrated on the basis of the capitalist model,
which further widens the gap between industrialized and developing countries.
Science, technology and innovation social/national systems make up networks of
institutions, resources, interactions and relationships, policy mechanism and instruments, as
well as scientific and technological activities which promote, articulate, and materialize
innovation and technological processes in society (generation, import, adaptation and
diffusion of technologies). However, to start a significant research or development program,
there must be a group of researchers who know about the issue, not just a person who knows
a little o wants to study it. Such critical mass is essential to give the program social impact
which, in turn, will generate a general social demand so that science acquires sustained
development. Without this “critical mass” society will not understand the issue importance
and will not ask for scientific activity to be increased in the region.

Aptitude and attitude to solve technical problems are not the same world wide, even
when there seems to be agreement on the fact that science, technology and innovation
should help to improve not only the population’s standard of living but also its education and
cultural level; to increase the economy’s competitiveness; and to reduce regional imbalances.
However, the use of scientific and technological advances has been, at times, the cause of
environmental deterioration and the source of new imbalances and social exclusion.

Nowadays, knowledge is the most important factor for social economic development
to enhance people’s life standard and to respect environmental sustainability for future
generations. However, knowledge alone does not ensure the transformation of the economy.
The change should be made in relation with the social systems around science, technology
and innovation, i.e., those which allow their introduction in production, consumption and
distribution.

The digital economy today depends on the classical economic mentality to make it
profitable. With it, the transformation potential of the society it represents is reduced to the
increase in profitability and to accounting results. The possibilities it offers to the present
world to provide equal conditions for everybody looking for global common welfare are
greatly limited.

This task cannot be restricted to individual will or to companies committed to social

activities. It is the responsibility of the network of users and producers to incorporate value
and new ideas to goods and services and to communicate and share this experience.

5. The compulsion to measure and provide dimension to the digital economy

The temptation to understand a new phenomenon be means of conventional ideas and

concepts starts by measuring, weighing and estimating, but this is not enough to understand
the nature of such phenomenon. It only measures it in material terms. For instance, it is said
that the “Internet economy” in the USA between 1995 and 1999 grew 174% each year reaching
U$S 301,000 million. This figure is higher than the “telecommunications economy” (270,000
million) and close to the “automotive economy” (350,000 million). Another indicator is the
increase in the global number of users from 150 million in 1999 to 700 million in 2001 or the
fact that in 2002 e-commerce would channel 3-4% of all exchanges. All these data, as well as
those coming from several e-commerce measurement surveys, are very generous when
assessing the phenomenon, but they are always reduced to the evaluation criteria of the
traditional economy.

In order to better appreciate the quality nature of new technology applications, it

would be convenient to visualize the digital economy diffusion scope concentrated in e-
commerce according to present practice. The following typology appears:

1. B2B: business to improve business, like outsourcing, supplier development.

 Transaction upgrading vs. services (to consumers, information, education and
training).
2. B2C: developments of new digital goods and services to compete with current
ones, education, network training , entertainment.
3. C2C: room for non-intermediation to link consumers with each other directly
without a formal commercial structure, auctions, purchase, sales.
4. B2G: business with governments, whose purchases and bids concentrate the
supply.
5. M-Commerce or E-Marketing: marketing through the Web, telemarketing o
telephone sales.
6. E-Financing: financial flows through the Web.
7. E-government: electronic government, information and services directly from
government sites, opinion polls, elections. Regulation, legal security and
protection. Tax evasion.
All these aspects have been strictly measured (we will not include figures here as
they will have changed when this paper is read) and show how incredibly fast the digital
economy has grown. What is paradoxical about this revolution is that the greater the
development, the more obsolete products become and the shorter their life span is.
All this will have its own projection beyond commerce. The B2B e-commerce will be
like a great catalyst in developing and accepting XML (Extensible Mark-up Language)
standards and will follow HTML in providing e-commerce with a language at two levels:
generic and industrial not only in information collection, search, organization and selection,
but also in its distribution.
Whereas both accounting and connectedness become a useful service which involves
management risks, applications, software and storage become services.
The B2C enlarges today’s big corporations performance, whose reliability is based on
brand, and also gives opportunities to small and very dynamic enterprises world wide to take
part in highly specialized or sophisticated niches and segments as well as those of low
quantity demand. However, this not enough to understand the digital economy’s revolutionary
or transforming nature. To do so, new ideas and concepts are necessary.

6. The economy’s conventional vision implies perfect information

The economic theory based on perfect competition and economic actors’ free
personal choice call for laboratory conditions, far away from the real economy. First of all, it
starts from a series of suppositions which are seldom verified: preeminence of private
property, free movement of people and capital, freedom of organization or association, zero
or minimum state intervention, homogeneous goods market (not determined by brands),
prices set by the market through agents’ rational behavior, perfect information available for
everybody at zero cost.
Rational decision-making requires the knowledge of all factors involved in the
question to solve, but the belief that everybody can have free access to information is wrong.
Information provided by companies is limited; the technological conditions and the possible
consequences of consumption are not known: companies’ available information is generally
considered a strategic asset and a source of value. Only balance sheets are public, which does
not mean they are true. From the consumer’s perspective, information on products and
processes is always expensive either because he must pay specialized communication means
to obtain it, or because the company pays for advertising which does not make reference to
the product’s main characteristics, but to consumption-linked sensations. Finally, there is the
information coming from the State through its different organizations, which is undoubtedly
insufficient, irrelevant and inappropriate.
The theoretical illusion of perfect information has been completely left behind when
George Akerlof, Michael Spence and Joseph Stiglitz received the Nobel Economy prize for
their theoretical contributions on asymmetric information.
The most conventional and basic economic information is provided by accountancy,
which can see only two sectors: public and private. This is not only insufficient, but it also
hampers the understanding of the whole economic phenomenon. The division of tasks
between the State and the market, between what is public and private, is one of the most
fruitful fields developed by Stiglitz. Both the State and the market have their own preferred
operation area as well as their limitations. None of them is perfect. This leads us to see the
economy from a phenomenologically less technical angle.

In Latin America, foreign trade participation in its gross domestic product does not
generally reach a two-digit figure. Companies that have an active role in the globalized world
are outnumbered by domestic market oriented ones. Even if these two sectors made up the
economy’s moneyed sector, a part similar to both of them would form the informal or black
economy.
Another forgotten aspect is the exchange of goods and services on a non-money basis
(it is the result of cooperation or solidarity: what Hazel Henderson calls the love economy)
and the nature economy, which allows the survival of all the species of the world in their own
environment.

7. New opportunities and virtual risks

If a country offers a specific context for the development of the digital economy on
the basis of an infrastructure articulating the whole, each country’s answer to new
technologies will depend on its history, culture, values, and human resources capable of
applying them. Therefore, responses will not be homogeneous: they will depend on each
country, culture and individual. This applies to Latin America, where differences transcend a
common language, religion or culture. However, the region as a whole has the same option or
an integrating economy that can join its society’s highly stratified segments, integrate
marginalized and isolated people, and articulate them with a fast growing globalized world.
However, considering the region’s population, it is possible to find at least two
prototype attitudes as regards innovation: a highly competitive, individualistic and anti-
regulatory one, and another one proposing a new social contract between government and
the productive sector and thus ensuring development and social cohesion.
To conventional thought, the digital economy can be seen as an expansion of the
current market economy. However, this is a very limited view of the new technological
revolution scope and of the risks and possibilities for the whole population.
This is an opportunity to rethink the present structure of social, economic and even
political relationships, all of which requires an open mind to foresee problems and
opportunities, threats and challenges.
In order to do so, new questions must be posed. For example, is it possible to know
the digital economy with the usual information of the traditional economy? How to value the
data input and output in relation with the structure of social and economic relationships? How
to value digital goods production within the framework of growing social needs? How to value
service production in a global market? How can new sending modes and communication
methods and ways improve social functions in a community? How can data processing
capacities strengthen the knowledge of a certain people?

It is therefore necessary to view the new technologies not only as the new economy’s
engine, but also as the framework for economic, political and social action. The new
technological infrastructure and structural relationships resulting from their application is an
opportunity for Latin America similar to the one the industrial revolution brought at the time
of emancipation. Like in that historical occasion, the risk is the appearance of political
independence in a context of economic dependence: a kind of technological neocolonialism.
To face this challenge, a strategic conception is needed to develop new scenarios for
economic and political action. As regards the democratization of the use of new technologies,
an interesting starting point would be a policy to make the community’s access to information
universal and a careful follow up of the training process that the new technology asks for to
avoid the underdeveloped use of developed technologies.
This would encourage the development of new companies with a high research and
development level enhancing our population’s intellectual capacities and projecting
themselves in all fields related to goods and service production.
The new technologies’ application potential should not be reduced to developed
countries nor to individual action or to the private sector. On the contrary, it should be used
to solve problems arising from the State’s main social functions, such as education, health,
and security since the poorest sectors are the ones in need of imagination and answers
adapted to their specific requirements.
Moreover, transparency and interaction skills provided by the new information and
communications technologies to public management show a significant step in all the people’s
access to information as opposed to traditionally bureaucratic minority groups.

8. The digital economy’s alternative potential

Although less than 5% of the world population have access to the Web, their
technologies’ influence over the world economy and society is very high. Today it is possible
to imagine a completely different economy from the industrial one, but the information and
communications technology revolution potential constitutes a challenge for traditional
economic thought. It is necessary to see beyond the dominant capitalist production model in
order to conceive a new development model. The digital economy generates cumulative
feedback through the application of knowledge to new information/communication
processing machines and thus produces new knowledge.
A digital economy is, essentially, an economy based on information. It is always
possible to share this information, which remains with those who produce or send it, without
disappearing after its first use. New possibilities to create value depend on the strengthening
of social and economic actors’ self-management capacity as well as on higher individual and
collective freedom.
If the economy’s aim is not limited to the increase in corporate profits, but is based
on companies and individuals’ strong social responsibility ethics, basic social needs will be
met and, therefore, it will be possible to have a dignified life and equal opportunities, which
are characteristics of any democratic system.
It is not a question of creating prosperous islands in the middle of a generalized
shortage. It is a question of making welfare universal and compatible with human beings’
dignity.
The development of new productive capacities which are not only competitive but
also, and fundamentally, collaborative allows for self-education and the strengthening of local
identities and values in a new paradigm integrating human society and nature and having
economy as its support.

9. The big challenge

The size of the challenge is shown in the greatness of its goals: achieving a truly
global society based on universal values and integrating local values and cultures; a society
where the economy is not predominantly material.
 If the division between producers and consumers is still present, all of them will have
to perform both roles at the same time. Consequently, gains and customer service justify the
productive enterprise, but in an environment of social responsibility to the community where
it is placed and to the community where its products are sent.
The universal integration of societies should not go against future generations, which
need a clean, safe and, above all, sustainable environment.
In fact, the digital economy offers a unique opportunity to make the Global Common
Good possible. The transformation of social relationships on the basis of both universal and
local features in not a utopian challenge: it is just a necessity.
Latin America was born to independent life between 1810 and 1824, when most of
Spain’s kingdoms in America became republics and thus started its national construction
within the framework of a European economy opening international markets to the industrial
revolution’s surplus production. This became in fact an economic re-colonization, beyond its
formal political independence.
As Latin America is about to start its third century of political autonomy, the digital
revolution provides a new opportunity to articulate that freedom of action as a national
community’s totalizing institution to exercise alternative strategies.
Like two hundred years ago, independent growth may be subjected to global
capitalism centralizing forces. The region’s problem constitutes, more than ever before, a
challenge to intelligence. The information society’s central characteristics allow for the
introduction of values and ideas to economic products. Let them be justice and solidarity.