If during the last year you repeatedly heard the phrase “You are on mute” during professional or social virtual meetings, you are someone for whom digital tools are effectively serving to expand your life options. But how universal is this experience for people in Latin America and the Caribbean? Despite important advances in expanding broadband coverage across the region and in increasing the ubiquity of mobile phone ownership, the effective conversion of these digital advances into well-being improvements remains out of reach for the vast majority of the population due to limited access to tools, knowledge and opportunities. As the graph below shows, digitalization in the region takes the form of an “inverted pyramid,” where at each step millions more people are left behind.

As Covid-19 spread around the world, access to digital technologies suddenly became one of the most important determinants of people's well-being. Having access to the internet at home has been (and continues to be) an essential lifeline for many, since it has allowed people to continue with most of their essential daily activities, such as working, studying and socializing while in isolation.

However, digital inequality persists in Latin America and the Caribbean, both within and between countries. While overall access to basic technologies has grown far more universal (practically all urban areas in Latin America and the Caribbean have mobile broadband coverage, and over 84% of the population owns a mobile phone), these two elements alone are insufficient for ensuring that a person is actually able to participate in activities like distance learning or remote working. Generally, a mobile phone only has access to the internet if you can afford to pay for the (often expensive) subscription to access mobile broadband services. The economic downturn during the pandemic has actually forced many people to suspend their cellphone subscriptions. In developing countries, mobile phone subscriptions fell for the first time in history, from 103 per 100 inhabitants in 2019 to 99 per 100 inhabitants in 2020 (ITU 2020).Thus, even though 84% of people in LAC own a mobile phone, only 69% of people report using the internet. From this point on, access to digital technologies continues to become even more profoundly unequal.

If we consider, for example, someone’s ability to do remote tasks such as to work or to study from home, a key determinant is whether or not their home has access to a fixed broadband service. Here, there is vast heterogeneity between countries in LAC. In countries like Chile and Costa Rica it is reported that more than 85% of homes have internet access, but in countries like Bolivia and Guatemala this share does not even reach 25%. Moreover, even if you have internet access at home, the possibility working or studying remotely requires owning a digital device such as a computer. As we can see, the share of homes that own a computer in LAC is again lower than the share that has access to the internet. At the country level, computer ownership ranges from a high of 65% and 68% of homes in Argentina and Uruguay to just 17% in countries like Honduras and El Salvador and 11% in Haiti.

Taking into account access to the internet at home and having at least one computer per household, we can see that digital marginalization – in terms of accessing both labor and educational opportunities during the pandemic - reaches about 60% of the population of Latin America and the Caribbean.

Within countries, inequalities are also strongly shaped by the urban/rural dimension. In LAC, internet adoption tends to be much higher in urban areas. For example, in 2017, in Brazil the level of internet adoption was 65% in urban areas compared to just 33.6% in rural areas and in Ecuador it was 46% in urban areas compared to just 16.6% in rural areas (CAF, 2020).

Another relevant factor for how digitalization is (or is not) converting access into inclusion, is what people are using the internet is for. For example, are people using it to perform key activities (providing a virtual alternative for those activities which previously required physical contact) or are they primarily using it to communicate through social networks? The “digital resilience at home index” created by CAF provides a way to measure this, and suggests that in the region the use the internet as a virtual tool for conducting essential activities remains limited.

The index combines four indicators in its calculation of “digital resilience”: health app downloads, educational app downloads, the density of fintech platforms, and the intensity of e-commerce. These indicators serve as a proxy to estimate the degree to which a country’s population is digitally prepared to stay-at-home during periods of restricted mobility.

As the graph shows, there is substantial heterogeneity in the index across the region. CAF considers an index threshold of 30, below which countries’ populations are thought to have a limited capacity to access health information, participate in educational activities, carry out monetary transactions, and acquire goods through electronic commerce at home.

From the perspective of inclusive development, digitalization efforts need to be universal such that every person at least has the chance to access and use the internet. However, as this post has shown—internet access alone is insufficient. Turning digitalization into well-being still requires a transformation of the labor supply (including advances in training and skills) and a parallel transformation of labor demand. In Latin America and the Caribbean, the average proportion of jobs that can be done from home is just 20%. This is lower than in other economies with similar incomes. The share of teleworkable jobs varies between 14% in Honduras to 27% in Uruguay. Comparatively, the share of teleworkable jobs is 41% in the United States (G4T Julio 2020).

While there is still much to be done, there are reasons to be optimistic. On one hand, the pandemic has encouraged people who already had digital access to deepen their skills and upgrade their digital tools. On the other hand, a consensus is growing around the notion that inclusive digitalization should be the responsibility of the State and, moreover, a top public priority. Since the beginning of COVID-19 related lockdowns and increased mobility restrictions, both public and private sector actors have undertaken a vast range of efforts to reduce the obstacles citizens face in relation to accessing distance learning and remote working. Telecommunications companies have played a fundamental role in expanding access to connectivity and digital educational resources. Throughout the region, many new initiatives have been implemented to confront these types of connectivity challenges, especially for lower-middle-income populations. It is essential that this positive inertia extends beyond the end of the pandemic, enabling inclusive digitalization to serve as a long-term engine for boosting national and regional productivity.