Competitiveness Landscape

Latin American countries have improved their competitiveness significantly over the past 10 years. However further improvements in technological readiness, innovation, infrastructure and education have to be made to sustain growth and to bridge gaps between countries.

The structural changes and productivity growth required in Latin America a reinvigorated competitiveness agenda to bridge competitiveness gaps between the region and the rest of the world as well as between Latin American countries. Despite some notable improvements over the past decade, most countries in the region have failed to deliver strong progress in the factors and institutions required for inclusive productivity improvements.

Although some countries have successfully implemented competitiveness agendas based on sound benchmarking and institutional frameworks or policy coordination and public-private collaboration, most countries in the region still lack a solid institutional design to tackle the broad spectrum of policies to drive productivity. This is reflected in the heterogeneity and inequality in competitiveness rankings across all twelve pillars of the Global Competitiveness Index with Chile, Panama, Costa Rica, Uruguay and Peru making progress and leading the region, but many others actually falling behind and reversing some of the gains from the past.

The main competitiveness gaps within the region are market size, infrastructure, institutions, technological readiness and macroeconomic environment. Bridging these gaps requires further integration into global markets fostering access to larger foreign markets as well as consolidating domestic demand through inclusive policies. The infrastructure gap will need new and innovative ways of financing through public-private collaboration. Institutional quality, the fight against corruption and rent seeking, are essential to allow the region to work on efficiency enhancers and innovation and business sophistication. Although much progress has been made consolidating sound macro policies, there is still large heterogeneity in the region.

Not only are there significant regional gaps but also large gaps in innovation, infrastructure, technological readiness and labor market efficiency between Latin America and the rest of the world. Closing these gaps will allow the region to embark on a new path towards growth and higher productivity.