Despite being a poor and unequal country, Costa Rica has managed to close the gap in access to technology for its citizens, and it is now leading the way in the region. The country started the process of admission for the Organization for Economic Cooperation and Development (OECD) several years ago with reforms on laws, the creation of policies and the use of Computer Technologies to improve education, information access, financial markets, competitiveness, and a more open government. In May 2020, Costa Rica became the first Central American or Caribbean country invited to become an OECD member.
The OECD has almost 60 years of existence, and its members are many of the world's more developed countries that work together to shape policies that foster prosperity, equality, opportunity, and well-being for their citizens. Costa Rica will become the 38th member, the fourth of Latin America.
Education and public investment, linked by the political career of a father and son, are part of the background that explains how Costa Rica's accomplishment was possible in the Central America and Caribbean region's complicated landscape for the development of computer technologies.
Central America and the Caribbean countries are the poorest of Latin America, which, at the same time, is the most unequal region in the world. "Costa Rica bets on education" is a common saying in the region, and dates back to the founding of the Second Republic in 1948, which after a civil war resulted in the abolition of the Armed Forces and a very strong investment in public education. Fifty years later, the son of one of the main actors in that event (the political leader José Figueres), President José Maria Figueres inaugurated in 1998 the first Intel factory in Central America that quickly began to assemble 33% of the microprocessors of the Celeron line.
Leading the Way
At that same time (1998) in the rest of the countries of Central America and the Caribbean the economy was still highly dependent on the production and export of fruits, and the clothing manufacturing industry was barely accommodating, when Costa Rica made the leap. Investment in technology, infrastructure, and highly skilled labor (thanks to decades of support for education) attracted companies like Hewlett-Packard (HP) and others to Costa Rica. The government decided that universal access to the Internet was the way to continue, and now, more than 20 years later, the harvest of that investment has become more evident.
Costa Rica's National Learning Institute and the Technical College offer permanent computer courses for free, and people register aiming to find a job in the country's technology industry. There are also many courses for computer programming, and the development of apps and software. There are bilingual courses such as Information Technological Support, and Computer Networking, that every day become more popular.
The high quality of public and private education systems is one of the country's main offers to attract international investment. The most important in recent years are Consumer Electronics (Noxtak, Matthews International), Contract Manufacturers (Zollner Electronics, ClamCleat), Electronic Components (Electro-technik) Engineering, Design Camp Software (INTEL Megalab, INTEL National Instruments), Digital Services (Catalina, Cheetah Digital), Digital Technologies (GBT Technologies, Microsoft, NTT Data Inc.) and Engineering Camp (Design: NCI Building Group, Smile Direct).4
Technology exportation is mainly focused to the U.S. and even though since 2011 they signed a Trade Agreement with China, there is still not a significant increase in their market exchange with that country, nor presence of Chinese investment in Costa Rica or transcendent commercial relations with Asia. This clear site opportunity is conditioned by political tensions from internal and external groups that have even called to cancel the agreement.
San Jose, the country's capital, was the host of the 43rd meeting of the Internet Corporation of Assigned Names and Numbers (ICANN 43) in 2012; and the country has reaffirmed its position in favor of a multi-stakeholder model of Internet governance in the International Telecommunications Union (ITU), and World Conference on International Telecommunications (WCIT) meeting in Dubai during 2012; the Internet Governance Forums (IGF) meetings in 2013-2016; and recent meetings of the Freedom Online Coalition (FOC).
The Costa Rican National Telecommunications Development Plan (PNDT) 2015-2021 for populations in vulnerable conditions includes "Connected Communities" with a budget of $168 million, aimed to provide Internet services to public education and health institutions in 184 districts throughout Costa Rica. "Connected Homes" with a budget of $100 million, for subsidized Internet access to 140,000 households in states of poverty and extreme poverty (some 507,000 people), covering about 46% of Costa Rican households in state of poverty and extreme poverty. "Equipping Public Centers" with a budget of $20 million, is a program that provides computers to public centers for people with disabilities, children, youth, elderly, indigenous people, and women who are heads of household and micro-entrepreneurs. "Connected Public Spaces" has a $10 million budget to connect 240 public access points (hotspots) with free Internet around the country. "Solidarity Broadband Network" targets public service centers that have higher connectivity needs and aims to improve the speed/quality of their services. "ICT Population Empowerment" program improves digital literacy and focuses on education and online security. "National Teachers Training Program on ICTs" is a program to train teachers on using ICTs in the classroom and in return, teaching their students ICT use. "Technology Platform" program is designed to increase the use of digital technologies by children and young people at 317 schools of the Ministry of Public Education.10
Technology in Difficult Terrain
Central America has a considerably smaller market and development of computer technology than the rest of Latin America. According to the OECD, the biggest investments are concentrated in Costa Rica (manufacture of computer parts, representation of important worldwide companies), Panama (representation of important worldwide companies) and Guatemala (creation of new successful software companies).
The lack of development of computer technologies in the Central American countries is due to their economic situation, given that few companies have the capacity or are willing to invest in such technologies. Even though many universities have started with mechatronic degrees and have created alliances with their governments to begin the preparation of more qualified employees that can attract international investment, and considering that the World Bank and the International Development Bank are pushing for programs that can help move the existing clothing factories' infrastructure and begin to create industrial parks for the manufacture of computer parts or the development of technology companies outside Costa Rica, the region still does not attract much international industrial technology investment.
There are many small investments focused on app development and computer technology assistance for governments or international programs in the region. Many new companies have been created mainly by young engineers that studied in the several universities in the region that started offering many bachelor's and master's degrees on computer programming, computer systems, mechatronics, and robotics 15 or 20 years ago. Many of them earned their bachelor's degree in their homeland and then traveled to the U.S. for master's and Ph.D's.5
Computer technology development has been related more to academia and research than to productivity or investment. The region's first computer center was created in Cuba in the early 1960s and then Costa Rica had also the use of computers in the mid 1960s in the National University. Both countries have maintained their tradition and currently offer strong Doctorates in computer science, specially Cuba that this year in April organized a World Forum on Computer Technology with the intention to strengthen the relationship with China and Latin American Universities and Scientific Centers.11
Puerto Rico, Dominican Republic, and the Bahamas also are pushing strong in their Ph.D. programs, and now almost all the countries have master's degrees for programing, TICs, or computer science. The problem remains that the economic sector does not have the capacity to correctly absorb all this high skilled workforce.
Most graduates get certified in the use of programs, because in the search for clients or a job, certifications are more profitable than masters. "Coursera" is one of the many platforms that young engineers and programmers are using to certify themselves.
Another option is entrepreneurship. According to the Manifest count down of the top 100 mobile app developers in Latin America (May 2020) Central America has 10 companies in that list: Gorilla Logic (Costa Rica), Hatchworks Technologies (Costa Rica), Modus Create (Costa Rica), Creativa Consultores (El Salvador), R/Cs (Costa Rica), Applaudo Studios, Rootstack (Panamá), Paralleldevs (Costa Rica), Lionmane Software, Inc. (Guatemala) and Central American Software Services (El Salvador).13
These companies have some clients in their own countries that are pushing for an increase in the use of technologies in the population and the growth of e-commerce, however, most of their customers are outside Central America, that rely on them for app development at a lower costs.
Another important difficulty in the region is judicial security; few countries have approved laws to protect and incentive technology investment and business. El Salvador is about to approve new laws in that matter, and it has become so important that it was a key part in the political campaigns. If they do so, the country will match up with Guatemala, Costa Rica, and Panama that have important advances.
The Caribbean has these laws since 1999 with the approval of the Electronic Transactions Act of Barbados, that has been followed for 13 other island states. Another important law was the Electronic Communications and Transactions Act of Bahamas in 2003 that was also created in the Cayman Islands. And finally, the Electronic Commerce and Digital Signature Law has already been created in Dominican Republic and Puerto Rico. The growth of e-commerce and the expansion of computer technologies are pressuring governments to move faster in legislation.8
Fiber optic is still important in the region, but in 2019 there was a decrease of $8 million in comparison to the previous year. Costa Rica is the main importer along with Panama, but last year they decreased their purchase in approximately 30% while Honduras, Guatemala and El Salvador increased them in more than 60%. The Caribbean has multimillionaire submarine optic fiber like the East Caribbean Fiber System (ECFS) that interconnects 14 eastern Caribbean islands. They are also looking to develop, with the help of the World Bank, 5G technology in the midterm. China is the most important supplier.6
Computer technology moves at quite different speeds in Central America and the Caribbean, and it is not always related to connectivity.
Internet access has increased but it basically still moves through poverty, in 2018 and 2019 the migrant caravans of hundreds of thousands of Central Americans walking to the U.S. were registered through the cellphones of the people that lived in extreme poverty but still managed to have a profile in a social network.
Social and Gender Inequality
Computer technology moves at quite different speeds in Central America and the Caribbean, and it is not always related to connectivity. The gender inequalities are evident and in countries like Honduras or Haiti men can have over three times mores access to technology than women living in rural areas. Even in countries with higher range for technology access like Costa Rica there has been a drop in the participation of women working in computer technology companies from almost a 40% of participation 10 years ago to less than 30% three years ago.8
Central American and Caribbean women have important responsibilities over their shoulders, almost three of every five houses are supported by single women that do not have the money and cannot access credit to develop entrepreneurship companies, and is the reason why almost 70% of women work in the service or the clothing sector for very low salaries.
It is ironic but in comparison with other parts of the world, in Latin America women have a higher rate of attainment of master's or doctorate degrees. They graduate but there are fewer spaces for them in the markets. Gender inequality has also made its way to the computer technology world in the region. Several universities have started to develop studies on Cyber Feminism to identify these inequalities and to find ways to face them with economic and political changes that avoid the reproduction of the same historical behavior of other sectors.1
Cyber feminism in the region has also focus on using computer technologies to reduce the economical gap that affects more women than men. Projects like Women's P2P Network in Haiti has created new markets for thousands of women that can reach new customers, find alliances, and built networks with women all over the country using voice commands to overcome illiteracy. Or KOFAVIV that helped gathered thousands of testimonies of women that had been victims and abused and were afraid to speak out. El Salvador and Nicaragua have created intensive programs to help poor rural women to get close to computer technologies and apply it in their daily activities.
For the island-states, digital connectivity has become as important as roads and electricity.
In Guatemala, georeferencing is being used to alert on places with high numbers of attacks against women, and in Cuba is used to help single mothers to look for jobs. In the Dominican Republic, CIPAF is helping international and national companies to identify professional women specialized in computer technology to help them get jobs and are overseeing that salaries of men and women in the same positions are equal.
In the Caribbean, many governments are applying a sort of tax called the Universal Service that charge telecommunication and technology international companies and uses the resource to help people with the lowest incomes to be able to access technology and education. Many of these programs are focused on helping girls to reduce social and gender inequality in technology access.
Unifying the Islands
In the Caribbean, development is more spread out than in Central America, but it is also a very unequal region. The nations (island-states) of the Caribbean region are scattered over an area of more than 27.5 million square kilometers. These small, developing countries are mostly isolated from each other by the Caribbean Sea and Atlantic Ocean. As such, they have greater Internet connectivity challenges than do mainland developing nations.2
The islands depend on submarine cable for Internet connectivity via a combination of fiber-optic, coaxial and copper cables, and fixed or mobile wireless networks. Second-generation (2G) mobile/cellular networks cover most of the population, providing basic telecommunications (voice and text messaging) services. Increasingly, newer third-generation (3G), fourth-generation (4G) and long-term evolution (LTE) mobile technologies that support mobile broadband Internet are being deployed. Internet access varies, in Haiti 11% of people are connected, and in Barbados and the Bahamas 80% are connected. There are great advances in computer technology in Barbados, Trinidad and Tobago, Bahamas, the Dominican Republic, and Jamaica, which are countries that are increasing their investment in new software companies and presence of worldwide companies.
The World Bank is financing several programs to unify various investments in the different countries: "Internet to unify the islands" they assure. They are focusing on computer science, Internet access, and engineering to develop a stronger market in the Caribbean and attract international investors to tourism, banking, and technology.
The World Bank's Caribbean Regional Communications Infrastructure Program (or CARCIP, for short), is a program that aims to promote digital skills training and business development. The goal is to create jobs while strengthening the countries' entrepreneurial base. With a well-trained population and a solid digital infrastructure, the Caribbean could position itself as a destination for IT services. The project offers resources to train and certify young people in courses of study ranging from software and apps development to database management and Web development.12
Approximately 40% of the Caribbean small States population still lacks access to the Internet, and affordability remains a challenge even for those connected. The digital economy is expected to reach 25% of global GDP in less than a decade, making it one of the main sources of growth and job creation. Moreover, studies show a significant positive relationship between digital technology adoption and GDP growth.7
Many developing countries have made ambitious strides to take advantage of these opportunities. In fact, many low to lower middle-income countries have embraced digital technologies to transform public services and reduce transaction costs for their citizens. In the last years all the island-states in the Caribbean have been focusing on the creation of State programs and new laws to help the development of information and communication technologies (ICTs). Large and medium-sized enterprises generally have access to the Internet, but the adoption of advanced ICTs is low for all firms in these economies, and small and micro enterprises lag way behind. The backwardness in ICT adoption is exacerbated when only a small fraction of society has high connectivity broadband. Only two of the 24 jurisdictions surveyed appear to be without laws targeted at e-commerce: those are Cuba and Guyana (as of April 2020).3
For Grenada, St. Lucia, St. Vincent and the Grenadines, broadband Internet access is a way to tie small, somewhat isolated island populations to each other and to the rest of the world. Fast, on-demand digital connections to business opportunities, information, even to friends and relatives is even more crucial when you are perched on a small island in the Caribbean Sea. For the island-states, digital connectivity has become as important as roads or electricity.
And while many Caribbean countries are now middle-income countries, unemployment rates have stayed high, above 20% in St. Vincent and the Grenadines and St. Lucia. Better broadband access should help the poorest to share the prosperity of their neighbors. This regional partnership was kicked off with a workshop co-hosted by the Eastern Caribbean Central Bank (ECCB) and the World Bank. This was the first time ever such a comprehensive and holistic dialogue on the topic took place between the World Bank and regional/country partners.2
This engagement will build on the ongoing Caribbean Regional Communications Infrastructure Program, supporting the deployment of over 1,200km of terrestrial and submarine fiber-optic cables to strengthen digital connectivity in select Eastern Caribbean countries. It also complements the Grenada Digital Governance for Resilience project, approved by the World Bank Board in August 2019. The first Caribbean project of this nature seeks to enhance the efficiency, usage, and resilience of select government services in Grenada.
The Keys to Succeed
In 2020, the COVID-19 pandemic and the extended quarantine in the Central American and the Caribbean countries has brought a burst in the growth of e-commerce especially in the middle and the upper class, but it has meant a whole new series of problems for the poor (50% of the population) whom—for example—in most of these countries, have not had access for public education during the pandemic, and probably will not have for the remainder of the year. They are underprepared to apply for employment for housework or to the technology industry and live in countries that are struggling to become attractive to this kind of investment, or to develop computer technologies by themselves. Their possibilities of success vanish by the second.
Millions of young men and women are missing out on the technological development experienced in other regions of the world due to the lack of education and working opportunities. As in the Costa Rica example, education and investment seem to be the keys that could allow Central America and the Caribbean to change their current situation.
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