On the second and last day of the virtual Forum: "Digital transformation, a scenario for the future in Ibero-America", it was possible to know first-hand the vision shared by government authorities of Central American countries; the highest representatives of institutions such as CENPROMYPE, COMTELCA or ASIET; and the presidents of the business organizations of the Dominican Republic, Honduras, Guatemala or Panama, on this trend that has exponentially accelerated in the months of the pandemic.
The event was opened by the vice president of CEOE and president of CEPYME, Gerardo Cuerva; the Secretary General of the International Organization of Employers (IOE), Roberto Suárez; his counterpart in the Secretariat for Central American Economic Integration-SIECA, Melvin Redondo; the manager of the Private Sector of the Central American Bank for Economic Integration-CABEI, Sabino Escobedo; and the Secretary General of the International Chamber of Commerce, John Denton.
During the day, which was divided into two panels, digital technologies were addressed as a fundamental tool to bridge existing productivity gaps and a source of opportunities for entrepreneurs and SMEs that develop new business models; public initiatives for the digital transformation of production were presented; and the role that Central American business organizations play in this area was valued in order to respond to the crisis generated by Covid.
The vice president of CEOE and president of CEPYME, Gerardo Cuerva, highlighted the work of the OIE, an organization that brings together more than 150 business organizations from 140 countries around the world, for its commitment and defense of business interests. Referring to the Forum, Cuerva insisted that the conferences held on the 17th and 18th represent a clear example of public-private collaboration and the intense activity that has been carried out by CEIB, SEGIB and FIJE since the beginning of the pandemic. And, as president of CEPYME, he highlighted the important role of MSMEs in the Central American region, which represent most of the region's business fabric. In this sense, he mentioned a report prepared by the OECD and the World Bank, in collaboration with Facebook, published in July 2020, from which it appears that a third of the small companies surveyed reported a reduction in the workforce as a result of the pandemic, and 26% of companies globally had to shut down completely from January to May. In some countries, 50% of companies were forced to close, he added. Cuerva also referred to non-performing loans as another major obstacle encountered by MSMEs, since according to a Barometer of Delinquencies prepared by CEPYME between mid-September and mid-October, 57% of the small and medium-sized Spanish companies consulted anticipate increase in delinquencies as a result of the crisis generated by the Covid. "In fact, 50% of those who are in arrears anticipate a possible situation of insolvency or closure," he reported.
On the other hand, the crisis has also brought some opportunities, said Cuerva, since “in 100 days we have advanced 5 years in terms of digitization, and, clear examples of this, have been teleworking, tele-education, telemedicine or platforms of entertainment". But, in this fast process, he added, companies have also had to face challenges such as fraud, piracy, cyberattacks, privacy at risk, or cybersecurity. But, the biggest challenge of all has been the inequality of opportunities, since not all people have the same access to technologies, equipment and skills. Despite these challenges, which must be solved, he insisted, technology and digitization are compulsory subjects to overcome this situation, and whoever does not do so now is late.
The Secretary General of the OIE, Roberto Suárez, for his part, announced that the 2021 scenario will be very complicated worldwide, but especially for the Central American region. In a global crisis, marked by restrictions on consumption, supply and demand, no CEO of any company could have changed the way of doing business so quickly and unexpectedly. However, according to a report prepared by the OIE, it was found that digital interaction with consumers increased from 36% to 58% in 2020 and the products that have been digitized during the same period in formal economies rose 30% to 60%. A significant rise in teleworking was also contemplated, which will begin to consolidate at the end of 2021.
With regard to global value chains, Suárez indicated, these are also being digitized, but the case of companies, especially MSMEs is very different, only between 12% and 14% purchased products online . For this reason, he stressed, it is crucial to have the ability to anticipate future skills and, among them, he assured, digital skills are a priority. He also valued the importance of public-private partnerships in Central America, and stressed that facing the challenges demanded by the region will not be possible without the involvement of business organizations.
The Secretary General of the Secretariat for Central American Economic Integration (SICA), Melvin Redondo, highlighted the importance of having spaces for dialogue such as this forum, in order to direct government policies and debate proposals in this year of crisis and serious effects. weather conditions in Central America. In his opinion, all actors in society must be involved in the digital transformation, since we have made great progress in accessing information and we must continue to do so, especially for MSMEs and in rural areas. Redondo pointed out that the Region is working on production transformation plans and intends to incorporate new technologies into government policies, in order to facilitate trade, governance management and equal access to opportunities. In this sense, he also mentioned the need to make good use of these tools and expand their scope of action to other sectors.
The manager of the Private Sector of the Central American Bank for Economic Integration (CABEI), Sabino Escobedo, reported, in turn, of an emergency program that they have launched and that offers 350 million dollars to prevent MSMEs from closing and providing support. so that they stay in the current context. It also provides, he assured, financing for the modernization of activities, equipment and technologies, in order to promote their economic integration. From the Bank, he pointed out, they also have regional programs so that companies can continue to invest in their basic structure, and help them to be more profitable and efficient. " Multilateral financial institutions are essential in the digital transformation process and represents one of their priorities ”, he declared.
The Secretary General of the International Chamber of Commerce, John Denton, for his part, spoke of the importance of strengthening and maintaining intra-regional trade and the importance of digital technology in prevention and diagnosis during the pandemic. The transformation process can only be achieved if the public and private sectors work together, he stressed.
Public digital transformation initiatives
In the first panel of the day, moderated by the permanent secretary of the Council of Ibero-American Entrepreneurs (CEIB), Narciso Casado, prominent authorities and representatives of institutions took part, such as the Vice Minister of Investment and Competition of Guatemala, Lisandro Bolaños; the executive director of CENPROMYME, David Cabrera; the executive secretary of the Regional Technical Commission for Telecommunications-COMTELCA; and the general secretary of the Inter-American Association of Telecommunications Companies-ASIET.
Under the slogan “Public initiatives for the digital transformation of production”, the experts from the Region agreed by pointing out that digitization in Central America should not be limited only to the use of new technologies, but also implies a change in the culture of companies , especially MSMEs, which represent 99% of the productive fabric. All of them insisted on the need to forge public-private partnerships to drive digital transformation and other sectors. "We have been good at creating companies, but not so much at making them grow" and, therefore, they advocated adopting support mechanisms to facilitate their survival and make them succeed.
The various institutions also agreed to point out the problem of informality, to improve access to basic infrastructures, to develop and enhance connectivity and telecommunications networks so that they reach remote and more isolated places, and to modernize and rethink the frameworks. legislative and regulatory measures to favor processes, promote Central American integration and intraregional trade. Likewise, they valued the transversality of digital technologies; the need to adopt public policies aimed at promoting these initiatives; the importance of promoting education, training and training at all levels; and committing to the sustainability of global value chains and the way of doing business, with examples of good practices. “Union, cohesion, integration and comprehensiveness, leadership, reduction of inequality, transversality and agility” were some of the most mentioned concepts in the course of this panel.
Role of business organizations in digital transformation
In the second and last panel of the forum: “How do Central American business organizations deal with digital transformation? Digitization as a response to Covid-19 ”, moderated by the executive director of the National Association of Young Entrepreneurs (ANJE) of the Dominican Republic, Sol Disla; The presidents of the Central American business organizations COPARDOM (Dominican Republic), Juan Alfredo de la Cruz; COHEP (Honduras), Juan Carlos Sikaffi; CACIF (Guatemala), Nils Leporowski; and CONEP (Panama), Julio de la Lastra.
In their presentations, the presidents agreed to highlight that for the digital transformation to be successful, it is necessary to promote knowledge and not just the technology system. This transformation process is motivated by the pandemic months in which companies have had to reinvent and innovate in order to reach customers in an increasingly competitive world. For this reason, they indicated, teleworking had to be promoted and they insisted on the need to promote training and education; support young people; promote administrative and tax simplification; improve infrastructure; and promote the development of more virtual spaces and smart cities.
The presidents of business organizations also stressed the importance of rebuilding and paving the way to provide better opportunities for all; implement an effective strategy that serves as a roadmap in this new reality; and betting on connectivity from a regional perspective and in a collaborative economy. Sectors such as logistics, industry, MSMEs, banking and the government sector, are some of those that have been most forced to digitize during these months to make a qualitative leap. "It is time to co-create and share lessons, since digital transformation must be in our DNA and in our way of life," they concluded.
The permanent secretary of CEIB, Narciso Casado, closed the day and assured that, under the motto "A vision from Central America", it has been possible to see how digitization has been an indispensable tool in the development of productivity, infrastructures, projects and training. It also influenced the digital transformation process that many of the Central American business organizations have undertaken, something that will be key to their future. Proof of this are the initiatives launched by organizations such as COHEP in Honduras, through the “Honduras Digital Challenge” program; Guatemala, during the XXVI Ibero-American Summit of Heads of State and Government on issues of digital transformation; o COSEP in Nicaragua, with the launch of the “Ubicanica” internship platform; among many others. Casado also highlighted the importance of public-private collaboration and the intense activity carried out, especially in the wake of the pandemic. A clear example of this cooperation is the alliance between CEIB and SEGIB with the main economic, political and social actors, to continue deepening regional integration, intra-regional trade and value chains. "Ensuring equal opportunities and inclusive growth through training and education, giving priority to people and employment", are essential factors, he considered, in order to obtain the best formula for social inclusion for the Region. These and other ideas, Casado reported, are included in a report prepared by CEIB, SEGIB and FIJE, under the slogan "More Iberoamerica, a firm commitment to the Region", which will be published soon.
Casado concluded his speech with a series of concepts, in homage to this forum on Digital Transformation, which he defined as the 10 “Dess”: Development, key in the post-Covid era; decision and determination, to get out of the crisis and face the recovery; diversification, so necessary in the economies of the Region; duty, essential to adopt adequate measures; data, closely linked to digitization and essential in the dissemination of information; defense of Ibero-American values and principles to maintain identity and a sense of unity; and debate and dialogue; two concepts that have proven to be key during the pandemic and without which the development required by the Region cannot be achieved. And all these concepts, he pointed out, deserve to be put into practice in order to prevent this conjunctural crisis from becoming structural, and with it to build, together, More Iberoamérica.
The general secretary of FIJE, Antonio Magraner, highlighted the importance of public-private alliances and collaborations; and opted for digitization in the current context. Regarding alliances, he commented that these have become essential in an increasingly collaborative world, since “States cannot function without companies, but companies cannot function without States and without an ecosystem to support them. themselves, "he said. Likewise, Magraner assured that digitization is here to stay and to change the way people think, as well as their lifestyle. "The digital transformation has allowed us to open our eyes and become part of a new era," he said. And, therefore, he emphasized, special support should be given to those small and medium-sized companies that require the most help to adapt to the new environment.
The head of Economy and Business at SEGIB, Pablo Adrián Hardy, stressed that “the road does not end here, since the ideas and main lines of work adopted will form part of the recommendations that will be delivered to the Heads of State and Government during the next Ibero-American Summit in Andorra ”. He also insisted that the conclusions drawn by the private sector on fundamental issues such as digitization or innovation will be very useful for the future development of the Central American region.