Latin America. The technological changes that are coming have the potential to revolutionize infrastructure sectors. Therefore, it is necessary for governments and the private sector in Latin America to implement interventions for rapid adaptation and taking advantage of the benefits offered by new technologies and reducing gaps in existing services.
This is the main thesis of the report "The impact of digitalization to reduce gaps and improve infrastructure services", published by CAF - development bank of Latin America -, which also lists the main challenges to achieve digital infrastructures comparable to those of the most advanced economies.
Among the main bottlenecks are the adaptation of regulations to new formats and technological uses, such as data management or convergence between sectors. In this sense, new technologies establish new roles or activities for existing agents in the market or propose a redistribution of activities. In electric power, for example, the benefits of the smart grid would be better harnessed with a separation of distribution and marketing. In urban transport, the other sector prioritized in the report, digitalization can generate changes in the way people are mobilized, of charging and paying for trips, as well as the fare integration between systems and means of transport.
Main findings
According to the report, in terms of the service gap in the electricity sector, the problems are mainly concentrated in the quality dimension, with interruption rates (in frequency and duration) that triple the values of Europe and double those of the United States, although there is heterogeneity between countries. Deficiencies are also identified in the loss dimension of the system (doubling the levels of the US, the European Union and Australia), while the composition of the energy matrix of Latin American countries, where hydroelectricity has an important share, allows costs not to be high.
Beyond production costs, in many cases tariffs represent a much higher percentage of income than in the United States or Europe. Finally, access is virtually universal, although there are some lags in rural areas. For its part, in the urban passenger transport sector, the report identifies different elements that make the service gap have an important component related to weaknesses in access and quality.
In terms of opportunities, the report confirms that the technological changes ahead have the potential to revolutionize infrastructure sectors. Regulatory schemes still require updates to incorporate new technologies. A key task of the State is to supervise that regulators pay due attention to the security of individual information and to the problems of cybersecurity and resilience of electrical and transport systems in the face of attacks or other eventualities.
The risks of transmission of COVID-19, especially in closed environments, such as public transport vehicles or the metro, with limited space, scarce control tools to identify sick passengers or those with a lack of cleanliness and cleaning of surfaces, brought to the scene a new dimension of safety: biosecurity. Digitalization provides new opportunities to solve these problems.
Infrastructure not only has the potential to contribute to the growth of the economy and the competitiveness of companies, the integration of national and regional space and the diversification of the productive fabric, but also helps social inclusion and environmental protection, thus improving the quality of life of present and future generations.
To access the full report, click here.
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