The Adoption of Digital Technologies in Developing Countries: Insights from Firmlevel surveys in Argentina and Brazil

Abstract

This study draws on two pieces of research: one carried out in Argentina (Albrieu et al., 2019) and the other in Brazil (IEL, 2018; Ferraz, Kupfer, Torracca & Britto, 2019). Both included a survey of around 300 manufacturing firms in the former and 710 in the latter. Three key findings emerge from these studies: i) Industry 4.0 has not yet arrived in Brazil and Argentina. Most manufacturing firms use older digital technology generations; ii) Very few enterprises are introducing measures to change this situation, although Brazilian companies seem to be relatively more dynamic when considering both G3 and G4 technologies; iii) Three different groups can be identified in terms of competence and readiness level; firms that are “forging ahead”, that is, firms closest to the technological frontier, firms with lower levels of digitalization and readiness, i.e. firms that are “lagging behind” and firms with lower levels of technology adoption than those that are ‘forging ahead’ but that are implementing concrete measures to bridge their technology gap, namely firms that are “catching up”. This classification of firms—and the associated risks and opportunities—is crucial for designing policies to address the widespread technology gap in both Argentina and Brazil. Two major results on skill demand can be gleaned from the Argentinean study: i) Technological gaps are associated with both low demand and scarcity of skills in new technologies. ii) Enhancing both socio-emotional and cognitive skills and other complex skills related to the use of new technologies is a necessary condition for the Fourth Industrial Revolution to establish a foothold.