Latin America is currently going through a very important stage in its technological transformation. Many countries and international companies are turning their attention to the region due to its potential in terms of technological development.
Although it has historically faced multiple challenges, the outlook today is, in many ways, positive-driven by significant changes such as digitalization, the emergence of innovative startups, and growing interest from foreign investors.
A clear reflection of this evolution is the progress in connectivity. In 2024, more than 500 million Latin Americans accessed the internet. Representing over 76% of the population. This marks a significant increase compared to the 450 million users reported in 2020, which equaled 66% of the population.
Current state of technological development in LATAM
In terms of innovation, the region is home to several tech unicorns (companies valued at over one billion dollars). Which has put Latin America firmly on the radar of international investors.
Notable examples include: Nubank (Brazil), recognized as the most innovative financial company in the world. Rappi (Colombia), a pioneer in large-scale last-mile logistics. And Kavak (Mexico), the second most valuable unicorn in the region.
These solid and well-established companies have played a major role in attracting investment. According to LAVCA (Latin American Private Equity & Venture Capital Association), the startup ecosystem in the region received over 8 billion USD in venture capital funding.
However, it’s not all smooth sailing. There are still structural challenges to address. Such as inequality in access to technology, limited rural connectivity, and underdeveloped infrastructure in many countries.
Yet, rather than viewing these challenges as obstacles, we should see them as opportunities to unleash our ideas, not as limits on our innovative and creative potential.
Challenges of technological development in Latin America
Infrastructure and connectivity
One of the main challenges is the uneven distribution of digital infrastructure. While capital cities and major urban centers generally have good connectivity, more than 35% of rural households still lack stable internet access, according to the Inter-American Development Bank (IDB).
Education and digital talent
The region faces a shortage of skilled talent in key areas such as AI, data science, cybersecurity, and software development. An IDC study projects that Latin America will face a shortage of over 2.5 million ICT professionals by 2025. Limiting the sustainable growth of tech industries.
Political and economic instability
Public policy shifts, inflation, and legal uncertainty often shake investor confidence. As a result, numerous tech projects have been slowed or halted in parts of the region.
Inequality in access
The digital transformation has yet to become truly inclusive. Indigenous communities, rural areas, and low-income populations still face significant barriers to participating in the new digital ecosystem. This creates a cycle of economic and social exclusion.
How much innovation potential does latin america have?
There are countless opportunities. Latin America is a region full of creative and business-minded people. Despite the challenges, the population has a winning mindset and enormous potential to turn the region into a global leader in certain technological sectors.
Startups and fintechs
According to a report by Statista, the number of fintech startups in the region surpassed 2,500 in 2023. Brazil and Mexico account for more than 60% of them. These companies are solving real-world problems like access to credit, digital payments, and inclusive insurance, transforming the financial services industry.
Local technology applied to strategic sectors
Smart agriculture: monitoring platforms using sensors, drones, and predictive analytics are revolutionizing agriculture in countries like Argentina, Colombia, and Peru.
Renewable energy: Chile and Uruguay are leaders in clean energy, with more than 50% of their energy matrices based on renewable sources, driven by advanced technological solutions.
Digital Transformation in tourism: in countries like Costa Rica and Panama, tourism, one of the region’s economic pillars, has embraced technologies like AI for personalized experiences, mobile apps for booking management, and augmented reality for cultural tours.
Mining 4.0: Peru and Chile have adopted automation technologies, IoT sensors, and advanced analytics to improve efficiency and sustainability in the mining sector.
Success stories: technological innovation in LATAM
Mexico: thriving fintech ecosystem
Mexico has become a regional fintech leader. Companies like Kueski (instant loans) and Clip (digital payments) have transformed financial access.
In addition, Mexico’s Fintech Law is one of the first in the region to regulate these types of businesses, providing a clear framework for local and foreign investors as well as entrepreneurs.
Argentina: Artificial Intelligence and healthcare
Argentina is one of the most advanced countries in AI applied to healthcare. Startups like Entelai use machine learning for medical image analysis. The country is also home to one of the region’s most promising AI talent hubs.
Brazil: sustainability and inclusion
Brazil leads financial innovation with Nubank, but also stands out for its sustainability-focused tech initiatives. Using blockchain to track agricultural supply chains and reduce environmental impact.
Chile: innovation-oriented public policy
Chile has actively promoted innovation through public policies. Startup Chile, for instance, has attracted over 2,000 tech companies. The country also leads South America in fixed internet speeds, according to Speedtest Global Index 2024.
Costa Rica: strategic tech development
Costa Rica has built a robust tech ecosystem, backed by a highly skilled workforce, political stability, and a strong commitment to sustainability. The country is home to over 200 tech companies exporting digital services and has attracted major global players like Intel, Amazon, and HPE.
Future projects across the region
- Expansion of 5G networks throughout Latin America
- Innovation centers supported by governments and universities
- Tax incentives and regulatory frameworks to attract tech investment
Costa Rica and its role in the tech revolution
Costa Rica has successfully positioned itself as a tech hub in Central America. In recent years, the country has attracted significant investment from global companies.
With over 200 digital tech companies exporting services, Costa Rica has doubled its foreign direct investment in ICT (Information and Communication Technology) over the past five years, according to CINDE.
The country has invested in technical and bilingual education, and has maintained stable public policies that favor technological growth. Programs like “Costa Rica + Digital” are accelerating the adoption of technology in productive sectors.
Costa Rica leads the way in the Central American region, serving as a model for sustainable and strategic technological development.
Latin America is at a turning point
Despite ongoing structural challenges such as digital inequality and the lack of specialized talent, the region’s tech ecosystem shows undeniable dynamism in many countries.
From fintech innovation to the digital transformation of sectors like healthcare, agriculture, and energy, the region is taking firm steps toward a more digital, inclusive, and competitive economy. Hopefully, this upward trend will continue to strengthen over time.
