Digital Colombia: Maximizing the global internet and data for sustainable and inclusive growth

Abstract

Colombia has experienced strong economic growth and reductions in poverty over the last decade. The government has also embarked on an ambitious plan to increase the uptake and use of digital technologies, expanding internet access, promoting the development of local online content, and emphasizing government use of the internet and data to improve service delivery, transparency, and governance. Despite the uncertainty generated by the results of the October 2, 2016, plebiscite, peace agreement with the Revolutionary Armed Forces of Colombia, or FARC as the group is known, is another reason for optimism about Colombia’s economic and social prospects. However, challenges still loom. The commodity boom that fueled large increases in Colombia exports is over and unlikely to return, leaving Colombia with a commodity weighted economy. Income inequality remains one of the highest globally and poverty is still widespread. As the internet goes global and data becomes an increasingly significant driver of economic growth, data flows are estimated to have contribute $7.8 trillion to global economic activity during the last decade—approximately 10 percent of global GDP.1 Moreover, the internet economy could double for G-20 between 2010-2020, employing a further 32 million workers.2 The pervasive use and impact of the internet across economic sectors means that the internet and data are best understood as general purpose technologies (GPT)—technologies that have the potential to reshape economies and boost productivity. Other GPTs include railway, internal combustion engine, and electricity.3 Deepening and broadening the capacity of government, business, and people to use these technologies will be a key determinant of economic prosperity. In fact, maximizing the use of the internet and data across Colombia’s economy will provide a basis for sustainable and inclusive growth in the 21st century. This report analyzes the ways that the internet and data flows are improving the productivity, efficiency, and competitiveness of the Colombian economy. For instance, businesses are using access to digital services such as cloud computing to reduce IT costs and thereby increase their competitiveness in domestic and global markets. Internet platforms are providing small and medium-sized enterprises in Colombia with access to consumers globally and providing an opportunity to expand participation by Colombians in international trade.