Costa Rica December 4 2021: The International Finance Corporation (IFC), a member of the World Bank Group, has published the report “Digital Entrepreneurship and Innovation in Central America,” a study on the digital ecosystem in the region, with a focus on Guatemala, El Salvador, Honduras, and Costa Rica. Prepared in collaboration with the Regional Center for the Promotion of Micro, Small and Medium Enterprises (CENPROMYPE), the document reveals the opportunities for digital transformation in Central America, the challenges it faces, and the potential of this digitalization to attract investment and generate jobs.
Presented at a panel sponsored by the Central American Institute of Business Administration (INCAE), the results of the study are encouraging: Central American companies are eager to go digital and see e-commerce, financial technology, and robotics as especially transformative for their companies in the next decade. The report also confirms that technology implementation is key for business: companies that implement technology in their operations have higher productivity and generate more profits.
To build a solid entrepreneurial ecosystem, the study points out that greater coordination and participation of the public and private sectors, having adequate regulations and facilitating access to financing for technology companies, micro, small and medium-sized enterprises (MSMEs), and women entrepreneurs are essential.
“Companies want to go digital, even more so after the COVID-19 pandemic, but not all have the opportunity to do so because they do not have access to resources. It is important to work with the financial sector to mobilize innovative funds and tools to the private sector, and especially to small businesses,” said Sanaa Abouzaid, IFC Regional Manager for Central America. We are confident that this report can help guide the path of the digital revolution in the region,” she added.
David Cabrera, Executive Director of Cenpromype, indicated that “it is necessary that we take advantage of the mechanisms that integration gives us to make visible and to strengthen institutional efforts, programs, and actions aimed at giving added value to the production of MSMEs, considering processes that allow the generation of new products or services, improvement of management or organizational processes, or improvements in marketing strategies.”
This is confirmed by the report: bureaucracy, access to financing, lack of information about technologies, limited technological skills among the workforce, the lack of national and regional strategies that promote e-commerce, and the lack of a more agile and friendly regulatory framework, are some of the barriers that slow down the digital transformation in Central America. On the other hand, it highlights opportunities to enhance the digital ecosystem, such as promoting a digital transformation strategy and e-commerce, promoting greater participation of women in the technology sector, increasing collaboration between the public and private sectors, and promoting alliances between the supply and demand of technology.
For this study, surveys were conducted with more than 2,000 companies from a variety of key sectors in Central America, including the technology, education, agricultural and tourism sectors, and a multitude of small and medium-sized enterprises.
The panel presentation of the report, moderated by Camelia Ilie, Dean of Executive Education and Strategic Innovation of INCAE, was attended by senior representatives of the public and private sector, including the Minister of Economy, Industry and Commerce of Costa Rica, Victoria Hernandez; IFC Senior Vice President of Operations Stephanie von Friedeburg; IFC Central America Manager Sanaa Abouzaid; the Managing Partner of the Salvadoran investment fund, Innogen Capital, Fernando Morán.
