• Meeting the targets of SDG 9 is critical to unleashing dynamic and competitive economic forces capable of generating employment and income, facilitating the uptake and promotion of new technologies, boosting international trade and promoting the efficient use of resources.


• The region needs to accelerate the development of its manufacturing sector and to increase investment in scientific research and innovation to meet SDG 9 by 2030.


• Importing clean technologies puts additional pressure on the current accounts of certain countries in the region, adding to external constraints arising from specialization patterns, the burden of external debt and profit remittances by foreign companies.

• The convergence between innovation and sustainability enables the confluence of economic and environmental efficiencies. The case of sustainable cities is an example of policies in which different objectives, sectors and stakeholders converge and enhance one another.


• Technological progress must be directly linked to efforts to achieve environmental goals, decoupling economic growth from use of natural resources and increasing energy efficiency.


• In order to close this technological gap, the Latin American and Caribbean region must endeavour to absorb, disseminate, adapt and upgrade technologies for its own ecological, social and economic conditions. Only thus will it be able to make effective use of global technological progress and to engage with certain segments of it.

Challenges

• Internet penetration continues in Latin America and the Caribbean. However, there are still problems with quality and equity of access.


• The countries that have managed to narrow the per capita income gap with developed economies have done so by changing their patterns of specialization. Nevertheless, as a region, Latin America and the Caribbean has been unable to transform its production structure with the same pace and intensity as Asian economies such as China. The region’s pattern of specialization has changed little in the past 30 years and in some cases existing patterns have become entrenched.


• The commodities boom led to improvement in a number of economic and social indicators; but, at the same time, it heightened the reprimarization of exports in South America and the Caribbean, meaning that the end of the boom brought with it an economic slowdown.


• South America relies on natural-resource exports and resource-intensive manufacturing as a source of foreign currency. Resource-intensive and low-tech manufacturing also play a key role in Caribbean and Central American exports.

Opportunities

• The total energy supply of Latin America and the Caribbean is still heavily dependent on hydrocarbons, despite the enormous potential of renewable sources in the region, and their geographical and seasonal complementarity.


• The environmental dimension of innovation heightens the idiosyncrasy of technological learning, as the challenges faced by each country and region are very specific. The potential for learning from these specificities is enormous. The mere importation of technology is only the beginning of the processes of dissemination and innovation in environmental technologies.


• To disregard the need to develop endogenous capabilities would be to miss a window of opportunity to reduce the technology gap and promote learning and investment. It also represents a loss of environmental efficiency for every dollar invested in imported equipment and technology, which are less efficient when not complemented by local capabilities and local innovation.

• In Mexico, medium- and high-technology manufactures account for a large percentage of total exports. However, in the case of high-technology exports, the data reflect the fragmentation of production chains — rather than the bridging of gaps with the technological frontier— with Mexico positioned in the most labour-intensive segments.


• In the region, Brazil is the country with the largest number of cryptocurrency exchange sites; Argentina is the leader in terms of the number of firms; and Mexico has the largest volume of digital currency exchange.

• In 2018, Mexico passed the Financial Technology Institutions Act, which seeks to regulate the provision of financial services such as electronic payments, crowdfunding and virtual assets. The application of this law requires amendments to nine others, including the Federal Law for the Prevention and Identification of Transactions with Illicit Proceeds. The new law makes Banco de México, the central bank, responsible for authorizing virtual assets that can be used as means of payment on fintech platforms.

• To promote economic growth and employment in Latin America and the Caribbean, while mitigating the related environmental impacts, polices must be designed to foster investment in technologies, goods and services linked to a low-carbon development path and a smaller environmental footprint. Such a path forms the productive and technological basis of sustainable development.


• Incentives and institutional frameworks must be reshaped, to strengthen the guiding role of public investment and foster greater public-private cooperation. The guiding role of the public sector is particularly important for creating key environmental markets.

• Activities that hurt the environment and create relatively little employment or production linkages must be replaced by more diversified activities that have smaller environmental footprints and generate substantial employment and income.


• It is essential to strengthen and update the region’s own technological capabilities and thereby gradually reduce its shortage of more technology-intensive goods. It must also apply policies that combine demand for new skills with education and professional training in the new areas of environmental technology.