What other regions fear as consequence of digitalization is already a reality in Latin America: deeply divided labour markets, decent well-paid jobs for a lucky few, precarious and informal employment for most of the rest, extreme concentration of economic power, and sky-rocketing inequality. So, what does the region stand to gain or lose from the current wave of technological innovation? And more importantly, what should we do about it?
So far there are few serious projections of digitalization's impact on Latin America. And the ones that do exist vary so widely that they give us little orientation. While the World Bank estimates 67 per cent of jobs to be susceptible to automization, a joint study by the OECD and CEPAL expects 1-2 per cent of jobs to be lost.
For now, the latest wave of technological innovation, dubbed the Fourth Industrial Revolution or Industry 4.0, has yet to make its impact on the industrial sectors of Latin America. Several major economies of the region have renewed their emphasis on commodities, resource-based manufacturing and low-productivity services. Industry is concentrated in a few countries, and most Latin American economies rely heavily on exports with a low technological content.
However, digitalization's impact is already being felt in the service sectors. The trash bin in front of my house in Montevideo gets picked up by an automated truck, health insurers offer to digitally monitor all my medical records and remind me of any check-ups and exams via an app and the streets are dotted with the red, orange and yellow crates of the delivery bikes bringing people their food orders.
Not only are the platform economy giants such as Uber, AirBnB or Delivery Hero ubiquitous in Latin American cities already, the region also has at least 10 of its own unicorns (link, paywall).
So digitalization does offer opportunities in Latin America, in financial technology services, e-commerce and smart city applications, to name a few. But who will be able to grasp these opportunities? And who will reap the benefits of innovation and technological change?
"A progressive alternative version of Latin America's digitalized future is emancipatory, inclusive and sustainable. It firmly puts people at its centre, not technology."
Of course, the region is facing this technological change in the context of a difficult political climate, to put it mildly. Neoliberal policies are back en vogue, labour reforms in Brazil and Argentina roll back workers' rights, candidates of the right and extreme right are making their mark in elections, and democratic governance is under threat. A decent job is already hard to come by for most of Latin America's workers, and, between the precarious forms of work such as the so-called self-employment of the digital economy and the roll-back of workers’ rights by neoliberal governments, things look about to get worse.
A progressive alternative version of Latin America's digitalized future is emancipatory, inclusive and sustainable. It firmly puts people at its centre, not technology. Technology should not only be controlled by humans, it should be at their service. The increase in productivity to be gained from the introduction of new technology—the technological dividend—should be used to improve the lives of workers: to improve health and safety; to reduce working hours; to raise salaries; to make workers more autonomous; and to make work at least decent and perhaps even more pleasant.
"For digitalization to benefit workers, it will also crucially need regulation. This means regulating new technology as well as its uses, such as the use of data and artificial intelligence in the workplace."
Ensuring that technological change benefits the majority, and not just the lucky few, will require public policies: solid social safety nets with broad coverage; accessible, quality education and training; and sound industrial and innovation policies. The financial burden of this is to be shared between the state, workers and, importantly, employers, who currently invest scantly in their workers compared with other regions.
For digitalization to benefit workers, it will also crucially need regulation. This means regulating new technology as well as its uses, such as the use of data and artificial intelligence in the workplace. Ensuring this benefit to workers will also need the reaffirmation of the established regulation of labour relationships: the respect of the fundamental principles and rights at work, and compliance with the obligations that employment brings for both sides. Calling gig economy workers self-employed is inaccurate and disadvantageous to their rights. Their commitments to their respective platforms include many of the obligations of conventional employment. So it is unfair that their rights do not match this de facto status.
None of the above will be achieved without social dialogue.
Strong unions are required to defend these rights and to demand that employers and states meet their end of the bargain. In collective negotiations, and beyond in the design and implementation of public policies and the regulation of work. The Latin American trade unions have a strong tradition of socio-political unionism: a unionism that looks beyond collective bargaining at the social and political forces that shape workers lives; a unionism that seeks alliances with other social movements; a unionism rooted in democracy, social justice and equality. The regional trade union project by Friedrich-Ebert-Stiftung in Latin America (link in Spanish) has been supporting regional workers' organizations in making their voices heard—regionally and internationally—to make sure that the interests of Latin America's workers are part and parcel of the definition of the future of work.
Uta Dirksen is a development economist and director of FES' Regional Trade Union Project in Latin America.
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