Our Digital Competitiveness Is Declining

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By Adelina Vilallobos
BLP Partner, Foreign Direct Investment Expert
avillalobos@blplegal.com

In time for the bicentennial came the Digital Riser report for 2021 published by the European Center for Digital Competitiveness. This report measures a country’s progress in digital transformation, based on information from the World Economic Forum. The results for Costa Rica are not as attractive as the beautiful drone exhibition organized by the 200 Years of Independent Life sponsors. Again, we declined in the digital competitiveness index.

Costa Rica is no longer rated at number 7 in Latin America but has fallen to position 14 of 21. This free fall without a parachute in the classification should be one of the main points of concern for future leaders. Countries that fail to be at the top of digital competitiveness will find it difficult to do well in the modern economy.

The classification takes into consideration two fundamental areas that weigh heavily on improving a country’s positioning. First, an ecosystem that includes the facilities for doing business, cost and time to start an enterprise, facilities to hire foreigners, and an educational system with the capacity to develop students trained in the skills required by companies is key. Costa Rica is positioned at number 12 in Latin America in this category.

The other area evaluated is a country’s mentality, including items such as the digital skills of the population, the attitude towards the risk of entrepreneurship, the diversity of the workforce, mobile broadband subscriptions, and the capacity of companies to adopt disruptive ideas. Here, we are even two places lower, at number 14 in the rankings.

According to this methodology, the countries that achieved the highest growth in 2021 are China, Vietnam, and Hungary. They did so as a result of setting ambitious goals and then meeting them. China implemented comprehensive measures for entrepreneurship and innovation. Vietnam set a goal of having its GDP made up of 30% digital economies by 2030 and Hungary has the ambition of becoming one of the ten leading countries for digital technologies by the end of this decade. Accompanying these goals, the fastest-growing countries have launched transparent government plans to achieve them. Other success stories are Canada, Cambodia, Georgia, France, and Uruguay. The report emphasizes that planning is a common factor in all these countries.

Just as last year, the report takes into account differentiation in the facilities for entrepreneurship, citing as examples, “Spain Entrepreneurial Nation” a plan launched by the government of that country that includes a “startup law” for the promotion of entrepreneurship, and the creation of financing mechanisms for technology startups in Brazil and Cambodia.

While governments around the world sponsor digital, financial, and educational innovation as the means to compete, in Costa Rica, we lose seven positions in one year. From my perspective, it is not about creating laws or monetary funds to promote entrepreneurship; the entrepreneurs themselves suggest more practical solutions such as eliminating a series of procedures and obstacles that face start-up enterprises. For example, launching a company that does not have a physical location in the era of telecommuting is a titanic task in this country, let alone registering as a taxpayer or employer.

The report by the aptly named European Center for Digital Competitiveness is emphatic in stating that governments that plan around digital competitiveness quickly scale positions. Let’s hope that by next September 15, we can celebrate Costa Rican Independence with a clear, long-term proposal to improve digital skills in the educational system, simplify procedures, and finally install a 5G network.

For the bicentennial, we couldn’t; hopefully, we won’t have to wait for the tricentennial.

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