The Jobs of Tomorrow: Technology, Productivity, and Prosperity in Latin America and the Caribbean

Abstract

Policy makers throughout Latin America and the Caribbean (LAC) will like to understand how best to leverage recent and ongoing global, business-relevant technologies to support productivity upgrading with inclusion. This report discusses technology adoption and its impact on inclusive growth through productivity, jobs, types of skills, and wages in Latin America. The report focuses particularly on two dimensions of inclusive economic growth: overall job growth, and how less-skilled, less well-off workers can also benefit from technology adoption. The book’s focus on five middle-income countries - Argentina, Brazil, Chile, Colombia, and Mexico is dictated both by the availability of high-quality data and by the differentially paced penetration of digital technologies in the LAC region. The evidence and conclusions presented in this report are relevant for lower income countries in the LAC region and for helping to understand the impacts of the adoption of other types of technologies beyond information and communication technology (ICT) that reduce costs and expand firms’ sales opportunities. This report investigates three channels linking technology adoption with more inclusive growth: a sufficiently large firm-level output expansion effect, a market access effect that increases smaller firms’ relative demand for lower-skilled workers, and a worker mobility effect that lowers cross-sectoral and cross regional worker mobility costs through better Internet access. This report is organized around the following issues: chapter one gives introduction. Chapter two provides a succinct context underpinning the importance of fostering productivity with more inclusive growth through digital technology adoption. Chapter three lays out the core assumptions and implications of a conceptual framework for technology adoption that realistically assumes that both firms and workers are heterogeneous agents. Chapter four discusses new learning from the region on the impacts of technology adoption. Chapter five discusses the main policy implications related to improving the broadly defined business environment, including technology diffusion support policies, product market policies, and education, skills, and labor market policies. Chapter six concludes by summarizing the main findings and outlining some questions for further research.