Opinion: Is digitization the main axis of economic decentralization?
23 Sep, 2021 | Economy, Technology
Sebastian Jaramillo Bossi, Co-Founder Kuick
Digitization has been the workhorse of everyone in recent times, of economists, politicians, and all those who see in it the solution of the famous democratization of trade, it seems that it was the remedy for all the problems that dragged on from decades ago, and with this tool, achieve the acclaimed diversification of our exportable basket, and diversification of exports, to achieve greater economic growth.
Reality is always more complex when it comes to bringing ideas to reality, that said, digitization in practical terms is the integration of applications, resources and virtual tools that allow streamlining procedures, save time and energy, all this makes us think that thanks to it we will be able to give more participation to companies that have fewer resources when competing on a field that has always been uneven. And although it seems that small and medium-sized companies that are digitized are the only business sector that does so, in order to balance the field and compete under the same conditions as large companies.
The facts show that the more an SME digitizes, a large company also does it and with more resources, and tools to have the best technological solutions at the lowest cost, and with the greatest support to do it in the best way. That said, the reality is that digitization can cause greater inequality between companies, and why not, it can even bankrupt many more SMEs than those that went bankrupt in the era of industrialization.
In this way, one of the most important challenges for the countries of Latin America to be able to grow at the levels as we did in the 90s, is through two specific things that several economists stand out, such as the Harvard professor of Venezuelan origin, Ricardo Haussman, who for years has argued that if we increase our exportable basket and diversify exports, we could achieve sustained growth of around 5–6%.
But something that seems so obvious has not been able to materialize for decades, because we have not been able to offer a broader exportable basket, and worse still, we have not been able to diversify our exports. In the latter case, with the pandemic, the digital acceleration that made us think so much that it would allow us to reach other economies more easily, has turned out the opposite, and we have increased dependence mainly on the Chinese market, in such a way that our Exports are reaching around 40% to only one country, but if we add the USA in the next few years and continue in this same direction, we could easily reach 60% of everything we export, in only 2 countries. And it is precisely there where we see an imminent danger if we do not do different things to avoid this dependence that is growing steadily and rapidly.
So, how do we also give more space to our SMEs? What is the roadmap that governments have to help them in this increasingly open trade and where digitization is global? It is true that there is a gigantic market out there, but that market is diverse, prepared, and increasingly competitive. So the question here is, what are the public policies that are being developed to position our country as a major exporter of first-rate goods and services?
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