Build the Internet! A Pathway to Jobs in Latin America

Is a poor broadband network holding back the region's economy? Investing in infrastructure doesn't mean just roads and bridges anymore.

In the days of the Great Depression, governments built roads and bridges in an attempt to nudge the economy into a recovery. Is expanding the broadband network the 21st-century equivalent?

Latin America is ripe for such an effort, argues Raul L. Katz of Columbia Business School. The underdeveloped broadband network there is holding back the region from faster economic growth.

In 2008, 5.5 percent of people living in Latin America had access to broadband Internet. In Europe and America, around a quarter of people did. Chile, the Latin American country with the most developed broadband network, still has a lower rate of access (8.4 percent) than Greece, the lowest-ranking European country surveyed.

The potential jobs growth will come from closing the gap between the demand for broadband (estimated based on the size of the Latin American economies) and its availability. The largest gaps are in Brazil, Mexico, and Venezuela. Additionally, about 15 percent of Internet users have dial-up connections, many of whom would switch over to faster broadband were it available and affordable.

Greater Internet access could certainly encourage the development of businesses ranging from small tech start-ups to global firms. But for governments looking for places where they can get the most bang for their real or peso, the payoff must be weighed against other demands such as schools, health clinics, and, of course, roads. That calculation is less straight-forward, and the politicians making it will take into account not only potential jobs, but potential votes as well.

Image: lecates/Flickr.